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					A New Direction.




                   Annual Report 2009
A New Direction.
Founded in 2002, Apollo Hospitals Colombo quickly became one of the nation’s
most reputed brands, known around the world for ne health care, reliability
and service.

Today e Lanka Hospitals Corporation PLC sets out in a new direction,
driven by our revitalised leadership and management - the strong team that has
con dently undertaken the challenge to set new benchmarks in medical care,
technology and pro tability to achieve even greater success in the years to come.
Corporate Philosophy




  Our Promise
  We believe that every person has the right to be treated with the
  utmost respect and consideration.Therefore at The Lanka
  Hospitals Corporation PLC, we care about our patients, we care
  about their families, who are anxious and concerned.We care
  about our colleagues and how we as a team provide the best care
  to our patients.
  Because we care, we will be sincere, compassionate and sensitive.
  To make a difference in lives we touch!




  Financial & Operational Highlights                  2   Audit Committee Report                 45
  Chairman’s Statement                                3   Independent Auditor’s Report           49
  Chief Executive Officer’s Review                    4   Balance Sheet                          50
  Prospective Medical Director’s Statement            7   Income Statement                       51
  Board of Directors                                  8   Statement of Changes In Equity         52
  Executive Committee                                11   Cash Flow Statements                   53
  Business Review                                    12   Accounting Policies                    54
  Corporate Social Responsibility                    35   Notes to the Financial Statements      58
  Annual Report of the Directors                     39   Shareholder and Investor Information   68
  Directors Responsibility for Financial Reporting   42   Notice of Meeting                      70
  Corporate Governance                               43   Form of Proxy                          71
Financial & Operational Highlights


                             Turnover                              Profit from Operations                                                         Profit after Tax
           Rs.’000                                                Rs.’000                                                             Rs.’000
         2,500,000                                               200,000                                                                 50,000


                                                                 150,000                                                                     0
         2,000,000
                                                                                                                                      -50,000
                                                                 100,000
         1,500,000
                                                                                                                                     -100,000
                                                                  50,000
                                                                                                                                     -150,000
         1,000,000
                                                                       0
                                                                                                                                     -200,000
          500,000
                                                                  -50,000                                                            -250,000

                 0                                               -100,000                                                            -300,000
                     04/05

                              05/06

                                      06/07

                                              07/08

                                                      08/09




                                                                             04/05

                                                                                     05/06

                                                                                                06/07

                                                                                                        07/08

                                                                                                                08/09




                                                                                                                                                  04/05

                                                                                                                                                          05/06

                                                                                                                                                                  06/07

                                                                                                                                                                          07/08

                                                                                                                                                                                  08/09
           Annual Revenue Growth                                      N et Assets Per Share                                                 N et Cash Flow from
                                                                                                                                            Operating Activities
                %                                                      Rs.                                                           Rs.’000
            30.00                                                   10.00                                                            350,000

            25.00                                                                                                                    300,000
                                                                     8.00
                                                                                                                                     250,000
            20.00

                                                                     6.00                                                            200,000
            15.00
                                                                                                                                     150,000
            10.00
                                                                     4.00                                                            100,000
              5.00
                                                                                                                                         50,000
                                                                     2.00
              0.00                                                                                                                           0

             -5.00                                                      0                                                             -50,000
                     04/05

                              05/06

                                      06/07

                                              07/08

                                                      08/09




                                                                             04/05

                                                                                     05/06

                                                                                                06/07

                                                                                                        07/08

                                                                                                                08/09




                                                                                                                                                  04/05

                                                                                                                                                          05/06

                                                                                                                                                                  06/07

                                                                                                                                                                          07/08

                                                                                                                                                                                  08/09




    Five year summary
                                                                                                                                                          (Figures in Sri Lankan Rupees)
                                                                  2004/05                        2005/06                    2006/07              2007/08                         2008/09
    Turnover                                                  1,656,853,923                  1,831,791,243              1,811,897,031        1,924,684,272                  2,469,606,111
    Profit/(Loss) from operations *                             114,973,603                    184,462,035                 33,701,930          (87,313,564)                   108,877,414
    Profit/(Loss) after tax                                     (55,947,632)                     6,837,118               (173,493,266)        (286,357,381)                    41,126,810
    Total assets                                              2,581,497,706                  2,501,422,089              2,949,618,335        2,954,057,223                  2,737,686,192
    Net assets                                                1,130,000,535                  1,043,253,255              1,243,142,649        1,954,425,163                  2,000,347,331
    Earnings/(Deficit) per share                                      (0.36)                          0.04                      (1.00)               (1.53)                          0.18
    Annual revenue growth %                                           11.44                          10.56                      (1.09)                6.22                          28.31
    Net assets per share                                               7.22                           6.66                       7.94                 8.74                           8.94
    Net cash flow from operating activities                      57,282,017                     63,661,158                 23,742,670          (48,033,439)                   310,074,763

    * Note : In arriving the Profit/(Loss) from operations, depreciation on the following asset categories has been charged at the rates given below.

    Asset category                                                                                                                       Up to 2005/06                    From 2006/07
    Medical equipment                                                                                                                            6.62%                             10%
    Other equipment                                                                                                                              6.14%                             10%




2   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Chairman’s Statement
  It is with great pleasure that I present to you the Annual    resolved to push the boundaries, inspired by the
  Report and the Audited Financial Statements for the           knowledge that by doing so not only will we garner
  financial year 2009. I am confident that our shareholders     recognition for your Company as a model for corporate
  will be pleased with the operational and financial            success but also by the fact that our efforts will place
  performance of The Lanka Hospitals Corporation PLC            Sri Lanka on the brink of a new victory – a victory of
  (Lanka Hospitals) during the period under review.             economic prosperity for the nation.

  Change has defined your Company’s operations in the           I am of the firm belief that commercial success must go
  recent past and I am fully aware that it has created a        hand in hand with societal responsibility, especially as
  sense of uncertainity amongst our stakeholders. As your       now is an opportune time to rebuild the very fabric of
  Chairman, allow me to emphasis the fact that Lanka            our society, which for years has undergone a multitude of
  Hospitals, today, stands on the threshold of a new            hardships and sacrifices. As such, over the coming
  beginning. I can assure you that our vision for your          financial year, your Board will unveil a strategic corporate
  Company is one that aspires to achieve the highest level      responsibility project of great magnitude and significance.
  of corporate excellence in the immediate future.
                                                                In conclusion, allow me, once again to re-assure you of
  Our motherland, after three decades of terrorism, too         our commitment to be the best. We will do what it takes
  stands on the throes of change. United as one country         to achieve this objective; we will work with a focus on
  and one people, Sri Lanka stands on the verge of a            the vision for your Company and deliver with dedication.
  catalytic rise in economic accomplishments. As citizens,      The future, therefore, dear shareholders and stakeholders
  ours is a role to precipitate this move towards achieving     is one filled with great opportunities. I call upon each
  great heights in economic, infrastructural and social         and every one of you to join hands with us to place
  development. With dedication, hard work and able              Lanka Hospitals as the pinnacle of healthcare in
  leadership I am confident that as a nation we will make       Sri Lanka, to establish your Company as the benchmark
  our mark.                                                     for Sri Lanka’s healthcare industry as well the region.

  Our vision for your Company mirrors the bold vision of        Gentlemen of the Board, ahead are challenging times but
  H.E the President for our nation. In the year ahead we        also times that promise the prospects of triumph. I call on
  will put in place a number of strategic initiatives which     all of you together with your Board of Management to
  aim to propel Lanka Hospitals to be positioned as a           look beyond the horizons, to think differently and do
  hospital and a corporate that is truly world-class. To this   differently in the quest for fulfilling our dreams for this
  effect, our medium term goal is to be recognized as the       establishment and for our nation. Thank you for your
  best healthcare solutions provider in the South Asian         show of confidence and for your commitment to the
  region.                                                       organization over the past years.

  As I write this statement, plans are underway to relaunch     It is pertinent to end with a quote from Madam Eleanor
  the entirety of your Company’s service portfolio in a         Roosevelt, the wife of President Franklin D. Roosevelt,
  strategic and concerted bid to notch our services to an       “the future belongs to those who believe in the beauty of
  all-new standard. By adopting international best practices    their dreams.” We have a dream for your Company and
  and by benchmarking against some of the world’s best in       our motherland. Let us believe in its beauty. United, we
  the field of healthcare, we are confident that your           will make it reality.
  Company will reach new heights of operational
  excellence. Our search for medical expertise and
  technical know-how have no limitations, we will source
  resources from across the world in our quest to achieve
  our strategic objectives.                                     (Sgd.)
                                                                Gotabaya Rajapaksa
  Therefore, you, our shareholders will appreciate that the     Chairman
  Board and the Management of Lanka Hospitals are


                                          A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009           3
Chief Executive Officer’s Review
    The financial year 2008/2009 has been a year in which          • make world-class healthcare facilities and medical
    we reaffirmed our commitment to the promise of this              services available to a larger segment of society to
    Company. Inspired by our promise, we intensified our             an extent that our services would provide absolute
    focus on quality, patient safety, accountability and the         value for money.
    adoption of best practices. As such in the year under
    review, we undertook a number of strategic and                 • challenge our cost structure to make room for
    operational initiatives, which will place us in good stead       further investment in in-patient room capacity and
    for future growth.                                               consultation OPD chambers to facilitate more
                                                                     doctors visiting and practicing at Lanka Hospitals
                                                                     and to convert key identified medical departments
    Industry overview
                                                                     to Centres of Excellence.
    The demand for healthcare from an industry
    perspective was indicative of an upward trend during           • gain a reputation as the hospital of choice for
    the year with a total market growth of 23 per cent.              patient care by effectively implementing identified
    Driven by a multitude of factors ranging from changing           protocols at each level, our service philosophy and
    lifestyle and disease patterns to shifting demographics,         by establishing and maintaining a friendly,
    the competitive environment intensified with the                 compassionate and personal atmosphere for every
    heightened operations of new players as well as the              patient, instilling high priority on team work,
    enhancement of infrastructure and operations of                  respect, accountability and compassion in every
    existing healthcare establishments. The private hospital         employee.
    industry remained highly concentrated and continued to
    portray oligopolistic market characteristics.                  Financial performance for the year
    The city hospitals continued to dominate the private           The financial year 2008/2009 proved to be a highlight in
    healthcare sector with four key players garnering the          the history of Lanka Hospitals in terms of revenue and
    bulk of the market shares. The Lanka Hospitals                 profitability. The Company posted commendable
    Corporation PLC (Lanka Hospitals) recorded an                  returns during the year, recording a 28 per cent growth,
    impressive growth of 28 per cent during the year and           over and above the industry average of 23 per cent for
    was placed second in terms of revenue growth. Lanka            the year under review, a significant expansion of the
    Hospitals was a seen as a tough challenger during the          revenue structure from that of the previous financial
    year with a market share of 24 per cent.                       year. In 2007/2008, revenue growth approximated 6 per
                                                                   cent and stood at Rs. 1.9 billion as opposed to Rs. 2.4
                                                                   billion in 2008/2009.
    Strategic intent for the year
    At the onset of the year under review, a key concern           The Company posted a Net Profit of Rs. 41.1 million
    was the need for a concerted approach to overcome the          during the year recovering from a long-standing
    prolonged period of financial and operational under-           scenario of losses, as evidenced by a Rs. 286 million
    performance that has characterized Lanka Hospitals in          Net Loss in the year 2007/2008. Operational Profit
    the past. As such, the key strategic priorities for the year   (Profit/Loss before Finance Cost and Tax) for the year
    were to:                                                       under review stood at Rs. 109 million up dramatically
                                                                   from a loss of RS 87 million in 2007/2008.




4   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Key Performance Indicators for the year point to an        commissioned during the year and proved to be an
overall improvement across the board, in all functions,    instant success.
departments and parameters. It is envisaged that by
maintaining this momentum, Lanka Hospitals will be         The hospitals’ OPD practice was further developed
well positioned to yield greater growth in the up          during the year by way of enhanced availability of
coming financial year.                                     Consultant practitioners. The portfolio of specialist
                                                           doctors continues to grow as a result of an ongoing
                                                           program to augment the available resources. A
Operational review
                                                           dedicated Pediatric Unit was established for patient
The focus of the operations for the year 2008/2009 was
                                                           convenience and to achieve the objective of capacity
to perceptively change the operational priorities such
                                                           optimization.
that the outcome at the completion of the financial year
would be two fold – firstly, achievement of a more         Introduction of emergency protocols and an Emergency
effective and dynamic operational model which is           Triage that aims to ensure that patients are treated in
discerning to the needs of the customer whilst             the order of their clinical urgency, that treatment is
delivering service excellence at all times and secondly,   appropriately and timely and to allocate the patient to
the achievement of financial objectives.                   the most appropriate assessment and treatment area
                                                           were initiated during the year in review, with a
A key priority therefore, was the need to lay the
                                                           conscious effort to minimize distress to patients through
foundations for operational success by way of
                                                           time-critical intervention. In rolling out the new model
establishing fundamental service guidelines, systems,
                                                           for emergency triage, we benchmarked against some of
protocols and controls for core components of the
                                                           the best emergency departments in the world. Looking
business’s drivers. Housekeeping, customer service,
                                                           forward we will continue to improve its facilities and
patient care and medical services were revamped
                                                           whilst increasing efficiencies in recognition of the
through an intensive process analysis aimed at
                                                           criticality of emergency care. Our objective is to give
enhancing service excellence. These efforts laid the
                                                           something back to society in making the emergency
foundation in commencing the processes aimed at
                                                           services available within the reach of the common
seeking international accreditations for process
                                                           citizen in reaching out to the masses that will be
standards, specifically ISO 15189 for Medical and
                                                           appreciated by the community.
Clinical Laboratory accreditation and ISO 9001 Quality
Management accreditation during the upcoming               A cohesive approach to customer care was identified as
financial year 2009/2010. Lanka Hospitals also obtained    a critical need to enhance the hospital’s relationship
registration with the Randox International Quality         with patients/customers and other stakeholders. In view
Assessment Scheme (RIQAS), an international External       of this need a dedicated customer care unit was
Quality Assurance scheme used by 7000 laboratories         established during the year under review. One point
worldwide.                                                 contact for corporate customers, VIP facilitation,
                                                           feedback analysis and action as well as a far-reaching
Specialist centres for Heart, Renal Care and Oncology
                                                           culture of customer orientation is now evidently
underwent a series of service improvement initiatives.
                                                           pervasive at Lanka Hospitals.
The Heart Centre was re-launched as a separate
business unit with greater focus on customer               The Nursing School, keeping in step with global
orientation. The establishment of a new renal ICU          expectations was further developed. The total student
aimed at improving the quality of service to renal         intake increased during the year to 117 up 40 per cent
transplant patients and the introduction of three renal    from that of the previous year. The school was
transplant teams enhanced the resources at the existing    equipped with simulation models allowing the trainees
renal care unit. The Fertility Centre was also




                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009        5
Chief Executive Officer’s Review


    to obtain experience through realistic scenarios. For the   chairman, LHC PLC will create an uncontested market
    first time in Sri Lanka’s medical history, 42 of the        space to grow the business further. The value
    School’s graduating class received Certification from the   innovation we intend creating will offer benefit and
    Medical College Council – a rare honour for our private     cascade to our patients, the firm and all its stakeholders
    sector nursing school.                                      including the medical fraternity and the society at large.

    Our revenue was also enhanced during the year by way
                                                                Looking to the future
    of 43 franchise sample collection centres for
                                                                Successful organizations, no matter how outstanding,
    diagnostics, which were introduced during the course
                                                                can be lulled into complacency. Constant innovation,
    of the year.
                                                                insistence on excellence and ever-increasing investment
    Growth is not measured merely by infrastructure or          in the future are bare necessities for staying in the
    financial performance, but more so by the quality, spirit   forefront of an industry. We sincerely believe that we
    and culture of an organization. High quality patient care   can make a difference to both Sri Lanka’s and the
    is a tremendous asset to any community and Lanka            region’s healthcare infrastructure.
    Hospitals is equally dedicated to providing a high
                                                                Going forward, the team at Lanka Hospitals will be the
    quality workplace culture for our employees
                                                                key to our success, as much as they have been the key
    culminating in superior medical care for our patients.
                                                                to our achievements this year. All of you have proved
    We remain proud of these accomplishments, while             that through dedication and a passion for what you
    recognizing that quality care is a continuous goal that     believe in, achievement is an imperative. Thank you,
    we strive to achieve every day, with every patient. I am    and I look to all of you for greater achievements in the
    confident this combination of a modern hospital facility,   years to come. The new direction will certainly place us
    state-of-the-art technology, and a staff who truly cares    amongst the best in the world. The hospital will reach
    about their patients will serve our customers well for      the pinnacle of healthcare and will bring pride to all
    decades to come.                                            precious people of Sri Lanka. My sincere appreciation
                                                                to our shareholders who have stood by and supported
    Strategic intent for 2009/2010                              our every endeavour and to our customers who have
    Lanka Hospitals is in the midst of one of the most          placed their confidence in us.
    exciting times. As our Chairman has stated in his
    Statement, we are poised for great change,
    opportunities and accomplishments. Our broad strategic
    intent for 2009/2010 is to take strides towards achieving
    global standards in healthcare. The upcoming year will,     (Sgd.)
    no doubt, be the base for precipitated future growth. As    Lakith Peiris
    per the vision and the strategic direction of our           Chief Executive Officer




6   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Prospective Medical Director’s Statement
  The Lanka Hospitals Corporation PLC (Lanka Hospitals)       provision of healthcare have been an issue to both
  completes this financial year with both commendable         Sri Lankan and global healthcare providers. Given the
  financial and operational results. From a personal          criticality of the emotive aspects of care in enhancing
  viewpoint, as I look to undertake the role of Director      the health services, I am of the opinion that as a sector,
  Medical Services, I am hopeful of taking this great         we should address this with greater focus.
  opportunity to further accomplish and continue the
                                                              Sri Lanka has immense potential to market itself as a
  journey of excellence that the incumbent Medical            destination for healthcare in international markets given
  Director and the Board of Management have charted           our advancements in an array of medical services. This
  over the past year.                                         is greatly enhanced by the prospects of our traditional
                                                              tourism offer. Hence, Health and Medical Tourism is an
  Sri Lanka as a nation, has been credited the world over
                                                              area of great opportunity for Sri Lanka. With this area of
  for the provision of cost effective healthcare to every
                                                              opportunity in focus, the vision articulated by Lanka
  citizen. Successive governments have focused on the
                                                              Hospitals’ Chairman therefore is pertinent. As a
  creation of public-private partnerships to further the
                                                              healthcare provider, we should strive to achieve world-
  healthcare system in the country. Collaboration between
                                                              class standards and status whilst inculcating a service
  the two sectors has realized a healthcare system that
                                                              culture that cares for people with dignity and
  allows for freedom of choice in the type and level of
                                                              compassion. Furthermore, we need to get together to
  healthcare services sought by individuals from
                                                              create a quality culture in the hospital focusing on safe
  outpatient to specialized tertiary care. Furthermore, the
                                                              patient care.
  government’s stance for healthcare service provision
  has inspired and stimulated the growth of private sector    As the prospective Director Medical Services, I look
  involvement in the sector. Over the recent past, we         forward to taking a lead from Lanka Hospitals’ current
  have witnessed the entry of a number of new private         accomplishments and will work focused towards
  healthcare service providers who have grasped the           creating a friendly and caring service atmosphere that is
  opportunity extended by the government’s policy             based on an ethos of quality consciousness.
  towards healthcare.

  The expansion in medical services has been driven by
  technological and scientific advances, globally.
  Similarly, in Sri Lanka we have witnessed the
  introduction of new technology to the field, thus           (Sgd.)
  advancing the nation’s medical capability. Despite these    Dr Wimal Karandagoda
  advances, allegations of a lack of compassion in the        Prospective Director Medical Services




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009          7
Board of Directors




           Mr. Gotabaya Rajapaksa                       Mr. Pradeep Kariyawasam    Dr. Nalaka Godahewa
           Chairman                                     Non Independent Director   Non Independent Director
           Independent Director




           Dr. B. Kaluarachchi                          Dr.Ajith Amarasinghe       Mr. B.A.C. Fernando
           Independent Director                         Non Independent Director   Independent Director




           Dr. S. S. L. Perera                          Brigadier (Dr.) Sanjeewa   Mr.Asoka Nissanka Pathirane
           Independent Director                         Heman Munasinghe           Independent Director
                                                        Independent Director



    All the above Board Members are Non-Executive Directors.



8   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Mr. Gotabaya Rajapaksa RWP RSP PSC Msc                         degree in Defense Studies from the University of
Secretary of Defence, Public Security, Law & Order             Madras in 1983. He has also obtained a Postgraduate
Mr. Gotabaya Rajapaksa assumed duties as Secretary,            degree in Information Technology from the University
Ministry of Defence, Public Security, Law & Order on           of Colombo in 1992.
25th November 2005. Before this appointment, he was
                                                               Mr. Gotabaya Rajapaksa and his wife Ioma have an
the Unix System Administrator of Loyola Law School at
                                                               adult son; he is brother of the present President of the
Los Angeles, USA.
                                                               country Mahinda Rajapaksa and the son of
A career soldier, Mr. Rajapaksa joined the Sri Lanka           parliamentarian and former Deputy Speaker of
Army in 1971, spent twenty years in service and held           Parliament, the late Mr. D. A. Rajapaksa.
the appointment of Deputy Commandant of Sir John
Kotelawala Defense University in 1991 and, as a
                                                               Mr. Pradeep Kariyawasam
Lieutenant Colonel was Coordinating Officer of
                                                               Mr. Pradeep Kariyawasam is the present Chairman of
Welioya area from 1990 to 1991. Prior to that, he was
                                                               Sri Lanka Insurance Corporation. Mr. Kariyawasam is a
the Coordinating Officer of Matale District and the
                                                               senior corporate figure with over fifteen years of
Commanding Officer of the 1st Battalion, Gajaba
                                                               experience at Chief Executive and General Manager
Regiment from 1989 to 1990. He has also held
                                                               level at Unimo Enterprises, United Motors Lanka Ltd
numerous other positions in the Sri Lanka Army such
                                                               and Browns Group of Companies respectively. His
as Instructor, Adjutant and Staff officer to the
                                                               extensive experience in marketing and sales
operations officer commanding contingents.
                                                               management encompasses a cross section of large
During his Military career, Mr. Gotabaya Rajapaksa has         corporate conglomerates. Mr. Kariyawasam has also
been awarded the President’s Commendation letter by            functioned as a respected consultant in business
former President J. R. Jayewardena and medals for              management and project management. He holds a
valour in combat such as Rana Wickrama Padakkama               certificate in marketing from CIM (UK).
and Rana Sura Padakkama (on two occasions) – by
former Presidents R. Premadasa and D. B. Wijetunga.
He has also received a commendation from the
                                                               Dr. Nalaka Godahewa
                                                               Dr. Nalaka Godahewa is the Managing Director of
Commander of the Army for his bravery in action.
                                                               Sri Lanka Insurance Corporation. He gained managerial
He has commanded many anti-terrorist operations in             and leadership experience at some of Sri Lanka’s
the North and East in different capacities. Among them         leading corporate institutions including Unilever, Suntel
was his Command of the 1st Battalion of the Gajaba             and apparel giant MAS. Whilst at MAS Holdings he was
Regiment in the important Vadamarachhci Operation in           the CEO of several overseas operations. Dr. Godahewa
1987 and Operation Thrividabalaya in 1990                      is academically and professionally qualified in the
respectively, to rescue Jaffna peninsula and the Jaffna        multiple fields of Engineering, Marketing and Finance.
Fort from terrorist control.                                   He holds a PhD from the University of South Australia
                                                               as well as a BSc in Electronics and Telecommunication
Hailing from the village of Weeraketiya in the South of        Engineering from the Moratuwa University and an
Sri Lanka, he had his education at the respected               MBA from the University of Sri Jayewardenepura. He is
educational institution, Ananda College, Colombo. He           also a Chartered Management Accountant (UK), a
completed his basic officer cadet training at prestigious      Certified Management Accountant (Aus) and a
Military Academy at Diyatalawa, and proceeded to               Chartered Marketer (UK). He has also served as
Pakistan to complete the Young Officers’ Course at             Consultant to the Board of Investment, Chairman –
Rawalpindi and later the mid career course at Quetta.          Imperial College of Business Studies and as a Director
He has also undergone advanced training in Counter             of CSC Kandia (Pvt) Ltd. Dr. Godahewa is currently the
Insurgency and Jungle Warfare at Assam, India. Later in        President of the Sri Lanka Branch of the Institute of
his career, Mr. Rajapaksa graduated in advanced                Certified Management Accountants of Australia,
Infantry Training from Infantry School Fort Benning,           Honorary President of the Global Marketing Network
USA.                                                           and Chairman of the Association of Licensed Banker
                                                               Operators of Sri Lanka.
As a staff officer, Mr. Rajapaksa completed his Staff
Course at the Defence Services Staff College in
Wellington, India in 1983. He obtained his Masters



                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009          9
Board of Directors



     Dr. B. Kaluarachchi                                       Dr. S. S. L. Perera
     Dr. B. Kaluarachchi holds a MBBS degree from the          Dr. S. S. L. Perera is a Consultant Neurosurgeon and is
     University of Ceylon, Faculty of Medicine, Colombo        an advisor to H.E. the President Mahinda Rajapakse.
     and served as a Medical Officer at several Government     He was formerly the Head of the Department of
     Hospitals in Sri Lanka. He currently serves on the        Neurosurgery at the Colombo National Hospital.
     board of Bank of Ceylon. He has been a Medical            Dr. Perera is widely credited with spearheading the
     Officer for leading hotels in Colombo, several            transformation of neurosurgical services in Sri Lanka to
     international airlines, several embassies and high        international standards and has pioneered the
     Commissions located in Sri Lanka while serving as         establishment of surgical programmes for Epilepsy and
     Consultant to several multinational companies.            Parkinsons Disease in the country. He spearheaded the
     Dr. Kaluarachchi has undergone Post Graduate              establishment of the Neuro Trauma Centre in the
     Training and has worked in leading National Health        National Hospital which is the biggest Neuro Trauma
     Service Hospitals in the United Kingdom. He was a         Centre in Asia. He is a visiting lecturer and Examiner
     founder Director of Asiri Hospitals Limited. Presently    of undergraduates at the Medical Faculties of Colombo
     Dr. B. Kaluarachchi is the President of the Ceylon        and Peradeniya and also a postgraduate trainer /
     Association for the Prevention of Tuberculosis, the       supervisor for Senior Registrars and Registrars in
     President of the Ruhunu Cultural Institution and a        Neurosurgery. Dr. Perera holds an MBBS and MS
     Member on the Board of management of Colombo              Surgery from the University of Colombo and is a
     Y.M.B.A. He is presently the Chairman of Hotels           Fellow of the Royal College of Surgeons in Edinburgh
     Colombo Ltd and is a Council Member of the                and in Glasgow, United Kingdom.
     University of Visual & Performing Arts.
                                                               Brigadier (Dr.) Sanjeewa Heman Munasinghe
     Dr.Ajith Amarasinghe                                      RWP RSP USP
     Dr. Ajith Amarasinghe graduated from Colombo              Brigadier (Dr.) Sanjeewa Heman Munasinghe RWP RSP
     Medical Faculty in 1993. He has obtained DCH and          USP is Consultant Radiologist at the Military Hospital,
     MD from Post Graduate Institute of Medicine of            Colombo and is the Director of Army Medical Services.
     University of Colombo. He trained in general and          Brig Munasinghe holds an MBBS Sri Lanka and MD
     community paediatrics in Sri Lanka and U.K. and           (Radiology) Sri Lanka. He has served on the Executive
     obtained MRCP and MRCPCH in the UK.                       Committee of the Asian Musculoskeletal Society and is
     Dr. Amarasinghe worked as the Consultant                  a life member of the Sri Lanka Medical Association, the
     Paediatrician and Medical Superintendent at the Base      College of Radiologist of Sri Lanka and the College of
     Hospital in Hambantota before joining Apollo              Medical Administrators of Sri Lanka.
     Hospitals Colombo at its inception. He served as a
     council member of Sri Lanka Medical Association and
     was on the editorial committee of the Sri Lanka Journal   Mr Asoka Nissanka Pathirane
     of Child Health. He is a member of the Medical            Mr. Asoka Pathirane is a Hotelier with extensive
     Advisory Committee and Chairman of the Ethics             experience in the sales, operations, marketing, food
     Committee Apollo Hospitals Colombo since 2003.            and beverage functions at the Hilton and Hyatt chains.
                                                               Mr Pathirane is also serving Sri Lanka Cricket in an
                                                               honorary capacity, as Media Manager and Secretary of
     Mr. B.A. C. Fernando                                      the National Development Centre. He holds a BA
     Mr. B. A. C. Fernando is the General Manager of Bank      (Hons) in media studies from London, and is a
     of Ceylon. He possesses 38 years experience in            graduate of the Ceylon Hotel School. Mr Pathirane is
     Banking. He has a Bachelor of Arts degree and a           an associate member of the Sri Lanka Institute of
     Masters Degree in Business Administration. He is a        Marketing and a member of the Hotel and Catering
     fellow member of the Institute of Bankers of Sri Lanka    International Management Association, United
     and is also a Director of the Institute. Mr. B.A.C.       Kingdom. He is currently working as Operations
     Fernando has undergone extensive local and overseas       Manager (NCP) Sri Lanka Cricket.
     training in Banking and Management. He is a Director
     in many of the Bank of Ceylon’s subsidiaries and
     associate companies.




10   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Executive Committee




    Chief Executive Officer           Director Medical Services      Chief Financial Officer          Assistant General Manager-
    Mr. Lakith Peiris                 Dr. Sewwandi                   Mr. Sampath Hettiarachchi        Operations
    MBA (W. Sydney), DipM (SL),       Thillakawardena                ACMA (UK), MBA (W.Sydney),       Dr. K.T. Iraivan
    F.CPM, M. SLIM, M.ACPM                                           Certified Six Sigma Green Belt   MBBS (India), DFM (UK), FCIP
    Certified Professional Marketer   MBBS, MD Dip (TM) Consultant
                                      Transfusion Medicine                                            (India), Dip Hospital Admin
    (Asia Pacific)                                                                                    (India)




    Internal Audit Manager            Deputy General Manager         Human Resources Manager          Head of International
    Mr. Mohamed Nizwer                Marketing                      Mr. Omal R. Kaluarachchi         Marketing
    ACA, ACMA                         Mr.Aruna Jeyakody                                               Ms. Jane Gagen
                                      Dip Pharm, B Pharm Special,                                     HND University of West Eng.
                                      MBA                                                             Bristol. BSc (Hons)
                                                                                                      University of Reading, UK.




    Manager Administration            Medical Superintendent         Materials Manager                Assistant Manager
    Mr.Vernon Abeyawardane            Dr. S. Ratnapreya              Mr. S. D. Dharmaratne            Diagnostics
                                      MBBS, MSc (Community                                            Dr. Harsha Goonetilleke
                                      Medicine), MCGP                                                 MD (Russia)




                                           A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009                11
Business Review
     The year 2009 heralded a year that was both
     challenging and full of promise from an economic
     perspective. Whilst the country overcame the grip of
     terrorism to liberate the Northern and Eastern provinces
     in May 2009, the challenges posed by the global
     economic downturn continued to impact the export and
     manufacturing sectors. However, in the absence of a
     large-scale defense and anti-terrorism mobilization, the
     country now remains committed towards precipitation
     of infrastructure and social development in a move to
     garner the full economic potential of the nation.

     Economic outlook for the year                                infant mortality and has been working concertedly to
     The protracted effects of the global food and energy         reduce poverty alleviation. The population below the
     crisis on the Sri Lankan economy were further                poverty line was reduced to 15 per cent in 2008.
     exacerbated by the intensification of the global financial   Despite the extensive social protection programmes, the
     crisis towards the end of the year 2008, affected the        growth imbalance is still prominent between the urban
     external sector and subsequently the overall economy.        and rural areas. Therefore, the government’s economic
     However, the corrective polices adopted by the               policy is centered on developing a regionally balanced
     government and the tight monetary policy adopted by          economy addressing the economic and social disparities
     the Central Bank of Sri Lanka have effectively               across all parts of the country. With the liberation of
     cushioned the adverse impact of the global financial         Northern and Eastern Provinces, the government now
     crisis, further assisted by falling global commodity         faces the huge challenge of developing basic
     prices. The rate of unemployment continued its               infrastructure facilities to restore the livelihood of the
     declining trend and reached the lowest rate in 2008.         people.

     Despite the adversities, Sri Lanka’s corporate sector        However, with the end of terrorism, Sri Lanka’s
     continued to perform commendably contributing to the         horizons are set to expand with great opportunity for
     achievement of the 5 per cent growth in the Gross            the future growth of its economy, infrastructure and
     Domestic Product in 2008.                                    social development.

     Sri Lanka’s human development indicators have over           Healthcare industry overview
     the years demonstrated elevated levels of performance,
                                                                  Sri Lanka’s private healthcare industry is highly
     which are on par with developed nations. The country
                                                                  concentrated and has over the years evolved in terms of
     has achieved higher levels in literacy, life expectancy,
                                                                  the number of industry players and the size and scope




12   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
“...despite the adversities, Sri Lanka’s corporate sector
continued to perform commendably contributing to the
achievement of the 5 per cent growth in the Gross
Domestic Product in 2008.”
of their operations. Exhibiting characteristics of an         resources and the scale of the expansion that is
oligopolistic market structure - an industry dominated        necessitated driving the bargaining power of medical
by a small number of large firms, selling identical           resource personnel, both doctors and nurses upward.
products, and enacting significant barriers to entry - the
private healthcare industry demonstrates common               In the future, the level of rivalry in the industry is
oligopolistic behavior. The industry if highly                expected to further aggravate with the entrance of new
concentrated with interaction based on price; whilst the      players. The growth and changes in demographics as
type and level of service is the basis on which players       well as the opening up of new geographic spheres for
compete with each other. Although the demand for              operations will increase interest in the sector.
hospital care is inelastic, price increases amongst the
                                                              The demand for healthcare increased, primarily driven
industry have been cautious due to the nature of the
                                                              by shifts in disease patterns and has been an evident
industry. The rate of growth of the healthcare sector has
                                                              trend over the past five years with hospital visits
also been constrained due to a shortage in human
                                                              reporting an increase of 3.2 per cent on average. This is




Personalised care in our comfortable range of luxury rooms.




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009         13
Business Review


                                                                  fundamental changes were undertaken during the year
     EYE CLINIC                                                   in all areas including medical services, operations,
     Treatment : LASIK                                            housekeeping, customer satisfaction and patient care.

     “The best this was, not having to look for my glasses        Adopting a twin strategy that aimed at working
     first thing this morning and being able to see people’s      simultaneously to enhance the effectiveness and
     faces from across the street!                                suppleness of the operational model whilst reducing the
                                                                  rapidly escalating operational costs, the following
     I’m very happy and my wife wants to get her eyes done
                                                                  strategic objectives drove the business during the year:
     now.”
                                                                  • Make world-class healthcare facilities and medical
     Jo Kelly from Exeter in England, UK.                           services available to a larger segment of society to
                                                                    an extent that our services would provide absolute
                                                                    value for money.
      also demonstrated by a total market growth of 23 per
      cent during the year 2008/2009. Amid changing lifestyle     • Challenge our cost structure to make room for
      and disease patterns and shifting demographics, the           further investment in in-patient room capacity and
      competitive environment intensified with the                  consultation OPD chambers to facilitate more
      heightened operations of new players as well as the           doctors visiting and practicing at The Lanka
      enhancement of infrastructure and operations of               Hospitals PLC (Lanka Hospitals) and to convert key
      existing healthcare establishments.                           identified medical departments to Centres of
                                                                    Excellence.
      The city hospitals continued to dominate the private        • Gain a reputation as the hospital of choice for
      healthcare sector with four key players garnering the         patient care by effectively implementing identified
      bulk of the market shares.                                    protocols at each level, our service philosophy and
                                                                    by establishing and maintaining a friendly,
      Strategic objectives for the year                             compassionate and personal atmosphere for every
      From a business, service and revenue enhancement              patient, instilling high priority on team work,
      perspective, the Company’s strategies for 2008/2009           respect, accountability and compassion in every
      were driven by the need to focus upon instilling a            employee.
      service orientation whilst providing acceptable returns
      to shareholders. To identify the core needs for strategic   Operational performance review
      re-organization, the Management conducted an invasive       The Lanka Hospitals Corporation PLC (Lanka Hospitals)
      analysis of the organizations’ operational systems and      commenced the financial year 2008/2009 on a
      processes during the year. Based on the key findings,       concerted drive towards the achievement of specific




      A patient registers for quality medical care.               A modern hospital ascetics with functionality.




14     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
“...the Company underwent a resurgence resulting in
the creation of a dynamic operational model geared to
deliver with greater optimization of resources.”
strategic objectives, with the key focus of attaining       healthcare, centres of excellence for specialist areas of
profitability during the year on the backdrop of a          medical care were established as well as upgraded
dismal year of operations in the year 2007/2008.            during the year.
Burdened by an operational loss of Rs. 87 million, a
Total Loss of Rs. 286 million and a mere 6 per cent         The Company’s operational performance demonstrated
revenue growth in the previous financial year, the          a marked enhancement across all key result areas. Key
Company resolved to overcome the sense of                   Performance Indicators for the year illustrate this
operational lull that characterized Lanka Hospitals.

As such, much of the Company’s operations during the
year were re-engineered, and the Company underwent             EYE CLINIC
a resurgence resulting in the creation of a dynamic
                                                               Treatment: CK Near vision correction
operational model geared to deliver with greater
optimization of resources. A marked improvement in             "I used to find having to put my specs on and off to
the delivery of service excellence has been a key              read and use the computer at work frustrating and
outcome of the measures taken during the year.                 annoying. When I heard about the new CK treatment
                                                               offered by Apollo, which offered freedom from reading
During the year under review, Lanka Hospitals went on          glasses, I arranged a consultation. I'm so glad I did!
to ensure that world class healthcare facilities and           After the treatment, which was totally pain free, my
medical services available at the hospital would be            reading vision is fantastic! I've thrown my specs for
accessible to a wider range of customers across the            good and my life has been changed for the better. Even
spectrum of socio-economic groupings. In an effort to          reading the paper is so much more pleasurable. I'd
ensure that value was derivative of this strategy, the         recommend CK to anyone - believe me, it's worth it."
Company endeavoured to balance the cost to quality
                                                               Ashantha from Colombo.
equation, ensuring that better management of costs did
not compromise the quality of care offered. In
furthering the hospital’s reputation as an authority in




Spacious atrium creating peaceful surroundings.             Our friendly staff are well trained in both service
                                                            and medical care.




                                      A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009        15
Business Review


     scenario of operational enhancement vis a vis figures       tandem below the line promotional activities -
     for the previous financial year.                            sponsorships, participation at seminars, symposia and
                                                                 trade shows - were targeted both at the medical
     A culture of cohesive teamwork has been the                 profession and the general public.
     fundamental basis for Lanka Hospitals’ success during
     the year and will continue to be a core to the future       Personal interaction of the hospital’s personnel with
     success of the Company. Notably, the staff at Lanka         doctors and consultants served to enhance relationships
     Hospitals rose to the challenges posed at the               and create a sense of awareness of the hospital’s service
     commencement of the year. Teamwork with dedication          offer.
     and a keen sense of commitment brought about a
     satisfactory degree of success towards reaching the         Customer service notched to the next level
     goals that were set during the year.                        A dedicated customer care team was appointed and
     Reviews of key initiatives undertaken during the period     designated the task of enhancing customer services
     under review to further the operational performance of      across the entire spectrum of the hospital service offer.
     the Company are discussed below.                            The customer care team acts as a one-point contact for
                                                                 the corporate sector, undertakes VIP facilitation, and
                                                                 conducts feedback analysis and initiates prompt action
     Changing perceptions, enhancing awareness                   on feedback received.
     During the year under review, an integrated
     communications campaign was undertaken in an effort         In furthering the customer service philosophy at Lanka
     to change negative and indifferent perceptions amongst      Hospitals during the year under review, a customer
     the general public towards the hospital and its brand. In




     Customer service takes priority at our OPD.




16   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
“...an enlargement of the consultant portfolio has
strengthened and heightened the existing level of
treatment, investigations and procedures – both medical
and surgical that the hospital has on offer. The
knowledge and expertise that these consultants have
brought with them have also enhanced the image of
Lanka Hospitals, pitching it as primary healthcare
provider in Sri Lanka.”
satisfaction survey was imitated in an effort to obtain      knowledge and expertise that these consultants have
feedback in a consistent manner.                             brought with them have also enhanced the image of
                                                             Lanka Hospitals, pitching it as primary healthcare
To enhance the service offer, the hospital identified and    provider in Sri Lanka.
head hunted new specialist doctors, introduced on-site
medical check-ups for the corporate sector, and              It also has served to build confidence in patients who
introduced a network of franchise sample collection          whilst looking for specialized medical treatment for
centres numbering 43 easily accessible points across the     complex surgeries from the in-house and visiting
country.                                                     foreign specialists feel comfortable that they can have
                                                             the services of their local consultant/s for future
At Lanka Hospitals in addition to resident medical staff -   referrals. Thus the expectations of patients are met –
a large number of highly specialized and qualified           leading to a satisfactory degree of success as envisaged
medical professionals - visiting consultants who are         during the year under review.
specialists in key areas of healthcare complement the
resource portfolio. An enlargement of the consultant         Introduction of new transplant teams during the year
portfolio has strengthened and heightened the existing       assisted in changing the perception about Lanka
level of treatment, investigations and procedures – both     Hospital’s capability in terms of complex surgeries.
medical and surgical that the hospital has on offer. The     Furthermore, a focused approach to enhance the




Accuracy you can depend on.                                  World class laboratory and diagnostic services




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009       17
Business Review


                                                                   body that has the largest global External Quality
     DENTAL CLINIC                                                 Assurance (EQA) scheme used by over 7,000
     Treatment: Dental Check up, Polish and Cleaning               laboratories worldwide. Apollo adheres to three RIQAS
                                                                   programmes – Haemotology, Clinical Chemistry and
     “Happy with the dental treatment, felt wonderful              Immunoassay.
     afterwards – my teeth felt smooth and very clean. I’ve
     rated your feedback form with EXCELLENT and would             Processes were put in place during the year to obtain
     recommend Apollo Hospital Colombo to friends and              ISO 15189 for Medical and Clinical Laboratory
     my relatives back at home”                                    accreditation and ISO 9001 Quality Management
                                                                   accreditation through the introduction of a series of
     Mrs. P. Fox from England.
                                                                   protocols for all laboratories.
     “The care and gentleness of the Dentist was second to
     none. As a point I really don’t like Dentists but after       Moreover, the introduction of a 24 hour Sample
     visiting the Dental Clinic at Apollo I did not have a         Collection service for OPD and in-patients has resulted
     problem with recommending anyone to come and                  in a quicker turn around in diagnosis and treatment.
     have their teeth attended to. I came originally just to
     have a cavity that was giving problems done but ended         Augmented specialist care
     up with a crown (as one of my teeth was worse than I          Establishment of a new, dedicated Renal Intensive Care
     thought) and a clean and polish. The state of the art         Unit (ICU) aimed at improving the quality of service to
     equipment that was available to me was really second          Renal Transplant patients was compounded by the
     to none – quite impressive, to be honest.”                    introduction of three additional renal transplant teams
                                                                   and the introduction of a more frequent dialysis
     Anne - a very satisfied foreigner living in Sri Lanka.
                                                                   program, all of which augmented the existing renal care
                                                                   services during the year.
       foreign customer portfolio through the tourism and
       travel sector was deployed.                                 The Heart Centre was relaunched in the year 2008/2009
                                                                   as a separate unit, thus giving it greater focus and more
                                                                   customer orientation. The introduction of fixed price
       Restructured diagnostics                                    packages has increased the appeal of the Centre’s
       The Diagnostics and Laboratory Services were
                                                                   services.
       restructured during the year from a human resource
       perspective with a new managerial team overlooking          The Fertility Centre was commissioned during the year
       the functions of the department. The introduction of a      and proves to be one of the most modern centres for
       new portfolio of laboratory tests enabled Lanka             fertility treatment in Sri Lanka. The programme brought
       Hospitals to enhance its Diagnostics functions and to       about instant success and was able to achieve
       pitch its services on par with competing private            international standards in efficacy with a 35% to 40%
       hospitals, a few of whom have built a reputation for        success rate. This is the only centre in Sri Lanka that
       Diagnostics and Laboratory services. Reporting formats      performs IVF cycles seven days a week instead of
       for tests were also changed in order to be on par with      batches. Within less than a year the centre has achieved
       industry norms.                                             100 impregnations.

       The introduction of visiting consultants to Microbiology,   The restructuring of the Health Check services allowed
       Biochemistry, and Histopathology laboratories further       for more dynamic leadership of the unit and for greater
       enhanced the operations and reputation of diagnostics       efficiency in the overall operations. The introduction of
       during the year.                                            new consultants to this service has yielded a scenario of
                                                                   greater efficiency in the system of reviews. Evidently,
       During the year, Lanka Hospitals introduced Randox
                                                                   the re-design of Health Check packages to suit the
       International Quality Assurance Scheme (RIQAS)
                                                                   requirements of customers has resulted in a greater
       programme to maintain the highest standards in
                                                                   demand for the service.
       diagnostics. RIQAS is an international quality assurance




18     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
The Emergency Unit was restructured with the
introduction of new protocols aimed at improving the             HEART CENTRE
overall quality of clinical services. The introduction of        Treatment: Heart By-pass (CABG) Surgery
Emergency Triage improved the quality of services and
reduced the delays in attending to critical emergencies.         “I received high standard of treatment at Apollo
As an essential function in Emergency Departments,               Hospital, which was recommended to me by the
where many patients may present simultaneously,                  Honorary Consul in my country. I am very relieved to
Triage determines the need for time-critical intervention.       be going home after my major heart surgery. Most
                                                                 people have a single, double or triple by pass, I had 4
                                                                 grafts!”
Educational services to meet future demand
The Department of Nursing recorded an increase in the            Mr. Mohamed from Africa
number of students attending the school from 70 in the
previous financial year to 117 during the year under
                                                              The Diploma of General Nursing certificate is issued by
review. From the school, 42 nurses who passed out as
                                                              the Nursing School to the nurses who meet the
qualified nurses obtained Medical College Council
                                                              government entry criteria. The following certificates are
Certification, the first time that such a certification has
                                                              issued by our nursing school:
been awarded to nurses in the private sector.
                                                              1. Diploma in General Nursing by the School of
The Nursing School accepts only students who meet the            Nursing Apollo Hospitals Colombo
criteria set by the government while the curriculum is        2. Proficiency in Nursing by the Ministry of Healthcare
that of the Ministry of Health covering both theory and          and Nutrition
practical. The practical training is based on the
                                                              3. Certificate of Efficiency in Nursing by the Ceylon
simulation models in the demonstration rooms and
                                                                 Medical College Council
practical clinical training at the hospital, with daily
interaction with patients. The course is conducted over       The hospital provides an ideal clinical training
a period of three years and the medium of instruction is      environment for specialized training programmes, as it
English. The Nursing School comprises of the nursing          is recognized as a tertiary care hospital, equipped with
principal, who is international and government                all the clinical facilities. All nursing students have
qualified, and four government qualified tutors, some of      experience of general and specialized nursing care such
whom have international certifications in some                as:
specialties. Together they teach all vital areas of nursing   • Medical Intensive Care Unit (MICU)
to our students.                                              • Cardiothoracic Intensive Care Unit or Coronary Care
                                                                   Unit (CCU)




A welcoming smile.                                            Our trained nurses welcome a challenge.




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009          19
Business Review


                                                                   Nursing School to international levels by including
     HEART CENTRE                                                  specialties, thus developing a career path for its trained
     Treatment: Heart By-pass (CABG) Surgery                       nurses to obtain diplomas and eventually the BSc in
                                                                   Nursing.
     “I feel like a new person after surgery. I will definitely
     recommend Apollo to others. The doctors and their             The Company took a step further this year by
     care are of an excellent standard as are all the support      introducing practical clinical training to nurses attached
     staff. The staff was very friendly, and they visited me       to outside institutions. The course has attracted several
     after their duties were over. Excellent services are          batches of nurses from the Maldives who followed the
     provided.”                                                    training programmes conducted by the education
                                                                   division of Lanka Hospitals.
     S.P. Thiyagamoorthy

                                                                   Intensive focus on housekeeping and
      •    Renal Intensive Care Unit and Haemodialysis (RICU)      infection control
      •    Neonatal Intensive Care Unit (NICU)                     The hospital undertook a concerted drive to instill the
      •    Operation Theater nursing                               fundamental practices for good hospital housekeeping
      •    Emergency care                                          during the year. Introduction of a house keeping
                                                                   manual in keeping with infection control guidelines and
      This is a critical aspect allowing the trained nurses to     the introduction of protocols for effectively maintaining
      then be placed according to the needs of the hospital as     a sanitized hospital environment are the focus of a
      they have the knowledge and experience in the                series of ongoing training and educational programmes
      specialized areas. Lanka Hospitals plans to develop its      for all employees of the hospital. The infection control




       The only hospital in Sri Lanka to offer Nuclear Medicine.




20    A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
program is dedicated to the proactive prevention and
control of nosocomical infections.                              HEART CENTRE
The aim of the Infection Control Program is                     Treatment: Heart By-pass (CABG) Surgery
dissemination of information, surveillance activities,          “Chest pain took the rhythm out of my life and now I
investigation, prevention and control.                          feel like a new person after surgery. I have no
                                                                reservations about recommending this facility, which
Quality assurance                                               is my life saving organisation. The staff is very
At Lanka Hospitals we stand committed to clinical               courteous and well disciplined. The head of the heart
protocols, highest degree of care of patients, patient          centre – the surgeon, and his team were top class.”
and family education on the nature of the illness and           Mr. A. Rajendra from Sri Lanka
the delivery of service. The commitment to maintain
standards and raise the bar in medical care extends
from all patient care professionals and the senior           Operational cost control
management, and transcends down to each and every            In a bid to stall rapidly escalating costs, the
employee in the organisation. Assured by accreditation       Management of Lanka Hospitals during the year
standards, patients are provided world-class treatment       2008/2009 adopted a number of cost control strategies
through its experienced medical and nursing staff,           and measures.
standards of hygiene to post-treatment recovery – all of     • Cost reduction programme initiated to reduce
which are exceptional.                                           consumption of electricity
                                                             • Water management programme initiated to optimize
The Quality Assurance Department has a scheme to                 usage
reward employees through a system called ‘Make a             • Telecommunication costs halved through change in
difference’ which is linked to patient feedback, and             supplier package
high performers are recognized for their contribution in     • Renegotiation of supplier terms and conditions
making Lanka Hospitals a sought after healthcare                 yielded greater value across all purchases
centre.                                                      • Initiated consolidated purchasing with the Group
                                                                 companies
In 2008/2009, we instituted a formal feed back referral
                                                             • Introduction of a Racking System resulting in space
system for handling patient grievances on a daily basis.
                                                                 savings, efficient storing and issuing for some
Continuous education of staff on the concepts of
                                                                 departments.
quality, adoption of quality circles and the 5S System as
well as protocols and procedures will become a part of
the quality philosophy at Lanka Hospitals.




A doctor examines a MRI scan.                                Advanced diagnotics.




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009       21
Business Review


                                                                for healthcare on the rise the Company proactively
     SPECIALITY: ORTHOPEDICS                                    established, commissioned and relaunched such
     Treatment: Knee Surgery                                    centres.

     “Why fly home for knee surgery? This man didn’t!
                                                                The Heart Centre
     It isn’t an easy decision when it comes to healthcare.     The first Centre of Excellence was established for
     Especially so when you are away from your home             cardiology in April 2008, to provide up-to-date
     country and find yourself in need of good, affordable,     preventive, treatment, curative and rehabilitative
     quality healthcare. You don’t want to feel foreign just    procedures and advice for patients with heart disease.
     because you are a foreigner. As an outpatient or
     inpatient, Apollo Hospital in Colombo provides a           A team of renowned local and international doctors
     comfortable environment with a staff that is               specializing in cardiac surgery, interventional
     knowledgeable in health services and provides a clean      cardiology, pediatric cardiology and cardiothoracic
     and modern facility. During a recent stay for              surgery, amongst other areas of cardiology are the very
     arthroscopic knee surgery, I was well informed by my       success of the Heart Centre. Conducting cardiac disease
     doctor. I feel confident my Doctor and the staff           screening for early detection of congenital heart disease
     performed the surgery and provided the care that was       especially for school children, the Heart Centre also
     necessary.                                                 conducts pediatric heart surgery free of charge for
                                                                children whose parents cannot afford the cost of
     Inpatient care at Apollo Hospital was an easy decision     surgery as part of its corporate social responsibility
     due to the helpful staff and the quality care I received   (CSR).
     as an outpatient. When the need for healthcare
     services arises again, I will certainly choose Apollo      During the year under review a number of surgeries
     Hospital.”                                                 were performed at the hospital on a CSR basis in
                                                                addition to surgeries that have been financially assisted
     Mr. C. Brown, Resident: SL Home Country: USA
                                                                by charity and support organisations. This initiative has
                                                                benefited a number of children with economic
      Product & Service Overview                                constraints.

      Centres of Excellence                                     The Heart Centre has trilingual counseling services for
      Lanka Hospitals during the year under review              heart patients and their families.
      undertook measures to convert identified medical
      departments to Centres of Excellence. With the demand




      Collapsed lung as seen on x-ray.                          Heart by pass surgery in progress.




22     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
“...conducting cardiac disease screening for early
detection of congenital heart disease especially for
school children, the Heart Centre also conducts
pediatric heart surgery free of charge for children whose
parents cannot afford the cost of surgery as part of its
corporate social responsibility”
Case study :Teenager’s life saved with keyhole                  He was then referred to a nephrologist at a private
lung surgery:                                                   hospital in Colombo and while being there developed
A 16-year-old boy from Batticaloa, in the Eastern               shortness of breath. His chest X-ray revealed
Province, developed a pain in his left calf following an        consolidations on his right lung. The patient was then
injury and was being treated for the pain with strong           transferred to a government hospital with ongoing
painkillers at a hospital in his area of residence. This        serious symptoms including bronchopneumonia, which
pain led to abdominal pain coupled with high fever.             primarily led to life-threatening accumulation of fluids
Investigations conducted thereafter-revealed Acute              and congestion in the lungs.
Renal Failure.
                                                                Having been treated and then transferred to the Chest
                                                                Hospital the patient had continuous treatment with




Our cardiothoracic surgeon and medical team preforming live saving surgery.




                                      A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009           23
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     antibiotics and was discharged. After returning home he       expanded enabling the left lung to function normally.
     was re-admitted to hospital when he developed severe          This was the first stage of the life saving surgery.
     difficulty in breathing. A CT scan showed a complete
     collapse of the right lung with the lower lobe collapse       This is a new technique called Video-Assisted
     of the left lung. It was at this stage that the patient was   Thoracoscopy Surgery (VATS), specifically developed
     admitted to our hospital.                                     for lung surgery. It can be used for diagnostic purposes
                                                                   such as biopsy or for therapeutic procedures to treat
     He had no past medical history of bronchial asthma,           trauma, lung cancer or as in this case lung infection.
     hypertension, diabetes, CRF, epilepsy, surgery or drug
     allergy. On initial examination it was noted that there       The patient’s condition improved over the next week
     was no air entry to the right side lung and no air entry      and the next stage of the surgery was then conducted
     to the left lower lobe of the lung. All relevant tests were   to address the damage to the right side of the lung, by
     conducted and the patient’s condition was such that he        the same team comprising eminent surgeons and
     needed intubations to maintain respiratory functions.         doctors who had conducted the first stage of surgery.
                                                                   Since pus had collected in the chest cavity for more
     With the chief cardiothoracic surgeon and the rest of         than 40 days every care was taken during the
     the heart centre team harnessed, immediate surgery was        procedure. Hours of labour in the theatre by the team
     performed to clear his lungs to save his life. Minimal        of doctors finally proved successful, as the lung started
     invasive keyhole surgery was done on the left side to         to function normally.
     drain pus from the whole chest cavity while pleural
     surgery (lung surgery) helped to keep the lungs               This 16-year-old boy thankfully has a new lease of life,
                                                                   and after two weeks of post surgery care, is now




     The kidney and dialysis centre.




24   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
leading a normal life engaging in activities of a normal
16-year-old teenager.                                               SPECIALITY: COSMETIC SURGERY
That such complicated and life threatening surgery can              Treatment: Breast Augmentation
be successfully done in Sri Lanka augurs well for the               “In November, a 25 year old, British mother of three
medical industry since patients now do not need to                  came to our Cosmetic Clinic for the sole purpose of
travel overseas incurring great costs for excellence in             having a breast enlargement surgery. Her husband (a
thoracic medical care and treatment.                                British paratrooper), accompanied her having just
                                                                    returned from Afghanistan. Her Cosmetic Surgery
Apollo Kidney and Dialysis Centre                                   Tour at Apollo was organised by Gorgeous Getaways.
Coinciding with its sixth anniversary in June 2008,                 She was interviewed by a British journalist to run the
Lanka Hospitals Corporation PLC launched its second                 story in the UK. She was so happy with her cosmetic
centre of excellence with the Department of Renal                   surgery experience that she is already planning on
Science uplifted to a state-of-the-art medical facility. It is      returning for more cosmetic work next year.”
now able to conduct both living and cadaver
transplants, with three medical teams comprising
                                                                 including surgery at the centre. The number of kidney
Vascular and Kidney transplant surgeons and Urologists
                                                                 transplant surgeries performed during the year
collaborating to give complete care, assisted by a
                                                                 2008/2009 was a marked increase from that of the
specialized renal care team. The centre functions to
                                                                 previous year.
improve kidney impairment, delay the advancement of
early kidney disease, aid patients in controlling end-
stage kidney failure and conduct kidney transplants via          Case study 01:Amazing renal transplant
traditional and laparoscopic (keyhole) surgery.                  surgery over the Sinhala and Tamil new year
                                                                 holiday:
The centre has an eight-bed dialysis centre (open 24             The first success story for the year under review is that
hours), emergency intensive care dialysis and bedside            of a Sri Lankan lady diagnosed with chronic renal
dialysis for inpatients. Apart from conducting                   failure in 2002. In the absence of a donor she was on a
transplants, other sophisticated treatments and                  waiting list for a kidney transplant. While continuing
procedures are also available at this centre of                  with dialysis a donor organ was found and Vascular and
excellence.                                                      Transplant Surgeons at Lanka Hospitals arranged this
                                                                 complex renal transplant surgery. The immediate tests
The establishment of the centre has attracted more               that were carried out ensured the screening was
patients with kidney disease who came in to make use             compatible, before the team performed this complex
of the wide range of facilities and treatment available          renal transplant surgery. Vital cross matching of donor




Advanced eye dianostics aim to offer bespoke                     Improve your vision with the latest techniques.
eye care using the latest technology.




                                         A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009          25
Business Review


                                                                        The team worked through the night and in to the early
     SPECIALITY: BIRTH CENTRE                                           hours of the next morning. Many surgeons are known
     NEONATAL CLINIC                                                    for their endurance, but the surgery was compounded
     Treatment: Neonatal Intensive Care                                 by the fact that it took place over the Sinhala and Tamil
                                                                        New Year holiday, increasing the complexity of the
     “A Happy ending to a rough beginning”                              high level of coordination and preparation involved in a
     A Happy Day!                                                       transplant surgery.

     Premature babies who weighed only 800 grams under
     the care of our NICU nurses and their doctor were able
                                                                        Case study 02: Pediatric renal transplant:
                                                                        Complex corrective surgery performed on a four year
     to go home. By early May these two little ones were over
                                                                        old Bangladeshi boy, who was born with a defect
     1.6 kg which is the recommended weight for discharge
                                                                        resulting in kidney failure. Resident in the Middle East,
     for babies. The proud parents were able to take their
                                                                        with his Sri Lankan mother and a Bangladeshi father,
     ‘bundles of joy’ home.
                                                                        hopes were low before he met our team of specialists.
     Born before their time, these little ones, for many                Medical opinion for renal treatment had been sought
     sleepless nights their parents had, battled for their lives.       from many hospitals in the Gulf, Singapore and the UK,
     Needing laser correction to prevent blindness before               prior to his visit to Sri Lanka. At each medical
     they could even see someone, these babies’ recovered               institution, the parents were informed that the boy was
     and were well enough to go home.                                   too young to undergo a transplant. While this little
                                                                        boy’s condition was deteriorating, the parents decided
     The parents were overjoyed when they were informed
                                                                        to visit Sri Lanka, and after their arrival made enquiries
     by the doctor that they could finally take their babies
                                                                        at our specialized kidney and dialysis centre.
     home, almost a month after they were born. They were
     very thankful to and appreciative of the nursing staff             The patient was put on immediate CAPD – Continuous
     at Apollo Neonatal Intensive Care Unit for helping their           Ambulatory Peritoneal Dialysis – a method of treatment
     little ones through their first very difficult days.”              practiced the world over to save the lives of kidney
     A very happy ending and a new beginning for one family             patients. CAPD treatment enabled this little boy to walk
                                                                        around and even play, and did not require hospital
                                                                        stay. The family returned to the Middle East and once
      and recipient was processed at our 24 hour labs, and              again the hospital there refused to perform surgery as
      our services allowed for a quick turn around, which               they considered it would be of a complex nature in
      was crucial for the surgery to be a success.                      view of the risks involved.




      A neonatal intensive care unit, gives many premature or newborn   Conductive Keratoplasty to address near vision
      babies the intensive care they need for the best start in life.




26     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
“...Lanka Hospitals upgraded its Eye Centre to a Centre
of Excellence in 2008, where in addition to the range of
minor and major procedures available to treat vision
related problems one of the newest technologies to
address near vision was introduced, called Conductive
Keratoplasty (CK) for the first time in Sri Lanka”
The parents brought him back to Sri Lanka and sought         continued to recover to the delight of his parents and
the services of Lanka Hospitals. The Renal Transplant        the team of doctors. This operation could be considered
team reviewed the condition of the boy and decided to        the first such in Sri Lanka, if not in the region.
take up the challenge of performing a kidney
transplant. His uncle stepped forward and offered his        One year on, reports reaching Lanka Hospitals are that
kidney, which was a very good match. The risks were          the little boy is doing well, and leading a life as normal
manifold – a four year old boy, small in size due to his     as possible, under the circumstances.
condition and physically weak, being implanted with an
adult kidney. All of this meant that the procedure           The Eye Centre
would be extremely difficult, dangerous and there can        Lanka Hospitals upgraded its Eye Centre to a Centre of
be no room for any margin of error. Post surgery,            Excellence in 2008, where in addition to the range of
sufficient blood and fluids to the newly transplanted        minor and major procedures available to treat vision
adult kidney in a four-year-old boy’s body and other         related problems one of the newest technologies to
medical conditions had to be dealt with as well.             address near vision was introduced, called Conductive
                                                             Keratoplasty (CK) for the first time in Sri Lanka. This is
The Renal Transplant team, garnering all of its expertise    a painless revolutionary treatment of the affected eye
and knowledge successfully conducted the operation –         through a procedure that involves no surgery and takes
the degree of success going beyond expectations. The         around four to five minutes to complete.
patient’s condition was continuously monitored for a
week at the ICU and he responded well to the anti            Subject to certain tests to ascertain the suitability of the
rejection drugs and other necessary treatment, and           patient prior to undergoing the procedure, NearVision




LASIK treatments to improve your vision.                     Advanced ENT treatments.




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009           27
Business Review


                                                                 of this revolutionary treatment. The advantage in this
     APOLLO HEALTH CHECK DEPARTMENT                              method of treatment is that one does not need to wear
     “I was really surprised and had a pleasantly raised BP      spectacles or contact lens and reading small print is also
     ☺ after enjoying your courteous service from the time I     easy as the vision is corrected and becomes clear.
     contacted you to get information about the heart check      The cornea specialist who performed this advanced
     up. It was AMAZING and I am really PROUD of being           surgery is in fact the only doctor in the region to
     a Sri Lankan. I first contacted the AHC (Apollo             specialize in this procedure.
     Hospitals) in Nov 2008 and the perception I got was
     HIGHLY REMARKABLE, and a new experience for me.
     The reception forwarded my call to a doctor to get          Excellence in ENT
     more info and I got the information I was after. Even       In March 2009, for the first time in the private sector, a
     after consulting a Doctor (in another hospital) in          Bone Anchored Hearing Aid (BAHA) surgery was
     person, I would have not received such info. And I was      conducted at the hospital on two brothers who were
     confident that I had done right and in the correct way.     impaired due to malformed outer ear and canal – one
                                                                 surgery following the other. And they for the first time
     On the day the staff was waiting for me to welcome me       in their lives – one in 18 years and the other in 20 years
     and the doctor was there to brief me in the process.        since birth, were able to hear and experience the many
     The services and treatment I got from your staff – I        sounds that surrounded them – thanks to BAHA.
     don’t think even VIPs get this on any official trips
     abroad.                                                     While this procedure has been in practice in the
                                                                 developed world for approximately 15 years it has seen
     I am an expatriate working abroad – Australia,
                                                                 the ‘light of day’ in Sri Lanka during the year under
     Sweden, Japan, China and now in Singapore. I have
                                                                 review.
     NEVER RECEIVED THIS KIND OF SIX STAR SERVICE
     EVEN AT HOSPITALS IN JAPAN, BEiJING OR                      Unlike other procedures that treat hearing impairment
     SINGAPORE. An officer escorted me to all the tests and      via the ear canal transmitting sound through air
     I never expected this in Sri Lanka. I never had that        conduction, BAHA directly transmits sound to the
     opportunity in any other hospital. The staff and            cochlea or the hearing organ through bone conduction
     technicians were kind, highly skilled and professional.     bypassing both the outer and middle ear enabling the
     It was really value for money.                              audio sense to function immediately.

     The e-z-e handling and caring was outstanding and           People with problems related to hearing – due to
     unfortunately no other space for improvements. It is        chronic ear discharge, large cavities or single sided
     100% customer satisfaction and exceeding my                 deafness, conventionally use hearing aids, which need
     expectations. PLEASE KEEP THIS UP.”                         to be replaced after a period of time as the device is
                                                                 bound to disintegrate. BAHA – an external device is
     Mr. D. C. Perera - a Sri Lankan living in Singapore
                                                                 easy to use and maintain, and can be easily removed
                                                                 when necessary and plugged back by the person
                                                                 concerned. It is user friendly as one can use ipods
       CK, using radio frequency (RF) can change how the eye
                                                                 without any difficulty while BAHA is in place. This then
       focuses on light by reshaping the cornea to make it
                                                                 becomes the ideal, cutting edge medical technology to
       steeper, and is performed under topical anaesthesia.
                                                                 address hearing impairment.
       This enables the patient to return to work the next day
       minus a dressing or patch over the eye. The hi-tech
       equipment was installed on August 29, 2008.


       Case study:Advanced near vision correction:
       The first procedure was conducted on August 30 on a
       walk-in patient (a Sri Lankan pilot) who had in fact
       come to the hospital for another purpose but had heard




28     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
The birthing centre
Billed to be renamed Mother and Baby Care, Lanka                 SPECIALITY: GENERAL SURGERY
Hospitals’ Birthing Centre has been the centre of activity       Treatment: Laparoscopic Gall Bladder removal
with the strident ‘cry’ of a new born as babies enter the
world and face the ‘harsh’ light of the labour room,             “Dear Apollo,
only to be wrapped up tenderly by the nursing staff              I am writing to you from my home here in Dubai and
prior to nestling in the warmth of their mother’s arms.          wish to thank you for all that you have done for me in
                                                                 resolving my condition pre and post op.
The doctors and staff at the Birthing Centre are fully
trained and competent to help a mother go through the            As I write I have just a single antibiotic tablet to take
hours of labour prior to delivery, comfortable and               and am really looking forward to life from thereon!!
secure, constantly being reassured that all would be             Now its back to work for me!!
well. Through the programmes of the in-house nursing
                                                                 My wife sends her best wishes and I have already
school, this area of specialized training has assisted
                                                                 heard her on the telephone recommending Apollo
nurses in giving the best in care during this crucial and
                                                                 Colombo, not sure if it’s all keyhole stuff, but if you are
momentous period in a mother’s life.
                                                                 also doing cosmetic type procedures you may end up
                                                                 busy!!
The Neonatal Intensive Care Unit (NICU)
                                                                 Thanks so much once more for everything.”
As in all areas of nursing care, the joys seen and
experienced at the Birthing Centre can in a moment               Jeff, Dubai
turn out to be just the opposite. Life is very precious
and every birth is a little miracle. It is in such trying
times that families have been seen to depend on the           caring for adults and the role of a nurse looking after a
care and support at the Birthing Centre and also at the       newborn baby is very demanding. In addition, these
Neonatal Intensive Care Unit (NICU). There are times          nurses are also expected to keep anxious parents and
that babies have come in to this world barely clinging        families abreast of developments with regard to the
to life and it is at such times that care is extended not     baby’s progress.
only to the infant but also to the entire family, in a time
                                                              The advancement of technology across the board has
when they tend to lose their grip on certain realities.
                                                              had its benefits extended to this area of medical
The highly trained staff at Lanka Hospitals’ own nursing      speciality, and at Lanka Hospitals the staff is well
school has been a boon to the nursing services the            trained and supported by a fully equipped NICU to deal
hospital offers to patients, irrespective of the nature of    with emergencies. For example, a baby weighing a
illness. However, caring for babies is vastly different to    mere 800 grams would have hardly had a chance of




Our IVF Centre has attracted hopeful couples from             Our friendly Fertility Centre team.
around the world.




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009              29
Business Review


                                                                               entertainment facilities, play area and a baby feeding
     EYE SURGERY ON PREMATURE BABIES                                           and changing room that mothers could make use of.
     “In April a specialist laser eye surgery (retinopathy of                  The Dedicated Pediatric Unit was created with patient
     prematurity) was done on two tiny premature babies                        convenience in mind, and more importantly focuses on
     to help prevent blindness. Our nurses in the Neonatal                     special childcare nursing and vaccination treatment, and
     Intensive Care Unit are looking after these two little                    has separate rooms for the purpose. The services of a
     ones that were only a mere 800gm in weight. That’s                        speech therapist are also available. The unit caters
     1/3 of a normal new born baby’s weight.”                                  exclusively to children who are kept occupied while
                                                                               they wait to consult their doctor. This move also
                                                                               enabled Lanka Hospitals to enhance capacity during the
      survival in the past in view of their low birth weight but               year under review.
      with new knowledge and technology, such babies born
      at Lanka Hospitals have shown amazing progress and
      have gone on to thrive.                                                  The Apollo Fertility Centre (AFC)
                                                                               Innovations in healthcare have been the success behind
                                                                               Lanka Hospitals since inception. The In Vitro
      New dedicated pediatric outpatients centre                               Fertilisation (IVF) Centre commissioned subsequent to a
      The new Pediatric OPD was commissioned in late 2008.                     substantial investment has attracted sub-fertile couples
      The OPD is dedicated to children and has been                            from all around Sri Lanka as well as the United
      designed in such a manner that an ambience of colour                     Kingdom, the United States of America, Canada, the
      and playfulness permeates the area. It is equipped with                  Middle East and the Maldives, to make use of the




       State of the art fertility centre with highly specialised facilities.




30    A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
procedures available to help them conceive a baby. The
AFC is complemented by every necessary feature that is          HEART CENTRE
needed, highly qualified and trained medical                    Treatment: Angiogram and Angioplasty
professionals, a trained medical team, the latest               (Medicated Stent)
equipment in reproductive techniques and the
opportunity of having world-class medical care at               “I had a burning sensation and tightness of the jaw. I
affordable rates.                                               did not take any action at this time and subsequently,
                                                                two weeks after I had heart palpitations following a
The equipment at AFC has the capacity to perform                game of tennis, which again I ignored. My son
reproductive techniques everyday and 750 cycles a               however, insisted that go to emergency and be seen by
year. This includes the Em Cell IVF chamber – the latest        the cardiologist at Apollo to be checked out. The ECG
model with inbuilt HEPA filters in which eggs are stored        tests that were taken revealed that I had inferior
and selected for the purpose of Intra Uterine                   myocardial infarct.
Insemination (IUI) – available for the first time in
                                                                The cardiologist who has a very calm nature and was
Southeast Asia, in addition to other state-of-the-art
                                                                very thorough, admitted me into the Medical Intensive
equipment necessary to successfully conduct IVF.
                                                                Care Unit (MICU) at Apollo Hospitals straightaway>He
Procedures such as Natural IVF Cycle, Intermediate IVF
                                                                gave me all the necessary and appropriate treatment,
Cycle and Controlled Ovarian Hyper-stimulation IVF
                                                                which enabled me to recover in a matter of a few days.
Cycle are available with prices ranging to suit patients
                                                                This then meant I was well enough to have a
according to their clinical condition, and with no
                                                                sophisticated angiogram and found that my right
compromise on the quality of care that is given to every
                                                                coronary artery was completely blocked. At this
patient.
                                                                juncture, the cardiologist advised me to have a
Patients seeking the facilities at AFC from the suburbs         Medicated Stent, which was inserted into the diseased
could do so since after the initial procedures the patient      vessel; where upon the blocked blood vessel opened up
can continue with the treatment in her home town,               completely and I felt like a new man immediately.
overseen by any gynecologist and is also free to use the        The whole process was done so efficiently, I did not feel
services of any gynecologist to deliver the baby. The           anything and amazingly it only took about an hour.
well planned follicular monitoring and the IUI is
performed in the presence of the husband.                       All credit goes to this efficient cardiologist, his team
                                                                and the nursing staff in the MICU; everyone was
Since being set up in September 2008, the AFC has had           exceptionally good.
over 100 successful impregnations in less than a year.
                                                                Finally I’d just say how my experience really does
                                                                illustrate how important it is NOT to ignore these
A unique health screening                                       warning signs and I was really fortunate to be under
New medical diagnostics are enabling more health                the care of such an experienced cardiologist. I am very
problems to be detected earlier and assist people               happy with Apollo and the care I received.”
towards lifestyle changes that can result in longer
healthier life. The concept of a dedicated area for a           Dr. S. Mahendra Perera, 71 years. Formally resident in the UK

health check, introduced since the inception of its
operations, is a specialized centre to give people a
                                                             hospital from rhinoplasty procedures to a complete
convenient and efficient service for annual health
                                                             body makeover (breast lift, tummy tuck and
checks.
                                                             liposuction), available at competitive rates.

The Cosmetic Clinic                                          The Cosmetic Clinic launched BOTOX treatments early
Fast becoming popular the world over, cosmetic surgery       in 2008 – a quick 15-minute, non surgical treatment to
is now practiced at our hospital with the centre having      smooth wrinkles, proving to be very popular with both
become a hub of activity during the year under review.       men and women to give a more youthful appearance
A range of cosmetic treatments is available at the           almost immediately.




                                      A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009                31
Business Review



     The Dental Clinic                                                Children have the services of a Pediatric Dentist who is
     The Dental Clinic with two fully equipped dental                 a specialist on preventive dentistry for children.
     treatment rooms is supported by dental X-ray facilities
                                                                      A wide range of treatment is available to address any
     for a full 180-degree view. It provides preventive,
                                                                      type of dental problem, however complicated, in its
     cosmetic, prosthetic and periodontal dentistry and
                                                                      comfortable clinics and is frequently used by local and
     extends to perform more complex oral surgeries. The
                                                                      international patrons seeking the benefits of low cost
     Centre manned by dental experts with vast experience
                                                                      yet high standards of dental care.
     specializes in implant, aesthetic and reconstructive
     dentistry. The Prosthodontists who have specialized in
     these procedures restore oral function by creating               Twenty-four hour services – effective and
     prostheses and restorations.                                     efficient
                                                                      Our 24 hour Pharmacy is open everyday and is fully
     The Centre has the services of an Oral and Maxillofacial         stocked with medicines from leading manufacturers as
     surgeon who has specialized in treating the anatomical           well as surgical, disposables, life saving and general
     areas of the mouth, jaws and the face, as well as                healthcare products, and nutritional supplements. The
     associated structures. Additionally, Orthodontists               pharmacy is manned by qualified and experienced
     oversee the study and treatment of malocclusions                 pharmacists who provide an efficient service at all
     (improper bites), a result of tooth irregularity or              times.
     disproportionate jaw relationships, or both. Endodontics
     is yet another area of dental speciality dealing with the        Our 24 hour Laboratory service offers over 3000
     tooth pulp and tissues that surround the root of a tooth.        internationally accredited lab tests round the clock. The
                                                                      laboratories are fully equipped and are clinically




     24 hour pharmacy services are available any time day or night.




32   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
comprehensive with the latest technologies to aid              The 10 day course was conducted by Medical Teams
precise diagnostic results and are staffed by a highly         International (MTI), operating in Sri Lanka to train
qualified team of professionals.                               Emergency Medical Technicians (EMT) towards
                                                               providing emergency care throughout the country.
Our 24 hour Emergency Service has well
experienced and qualified doctors and nurses on call           Trained Emergency Medical Technicians are an absolute
throughout the day and night, ready to respond to any          necessity, in view of the need to have such personnel
medical emergency for patients who seek help from this         respond to emergency calls especially in case of trauma.
critical facility. The quality is superlative and efficient,   In Sri Lanka, this aspect of medical training has not
and includes emergency triage, an observation area,            received the importance it deserves and training the
and ambulances with ACLS (Advanced Cardiac Life                participants received would ensure that the victims of
Support), bedside cardiac monitors, defibrillators,            trauma would have pre hospital care before being
ventilators and fully equipped crash cart in addition to       brought to hospital within the ‘golden hour’ considered
other regular medical emergency services.                      crucial in traumas. EMTs would be in a position to give
                                                               treatment that could save lives and minimise further
Our 24 hour ‘hospital on wheels’ a fleet of state-of-          harm to an injury already sustained by the manner in
the-art ambulances are ready to deal with any                  which such victims are taken care of and transported to
emergency with a team of specially trained doctors and         hospital.
nurses who are dedicated and committed to give vital
and life saving support to those in urgent need, island        Government hospitals have trained Emergency Medical
wide. Those seeking admission to the hospital and              Technicians who respond to calls made by the public in
living within a 10 km radius of the hospital are offered       this regard. This important service would be a future
a free ambulance pick-up as an additional service.             collaboration between the government and private
                                                               sector hospitals. As a precursor, Lanka Hospitals took
Trained to save lives – our EMTs                               the initiative to facilitate the training of a batch of
                                                               young men by making available its auditorium to
In March 2009, a programme was launched to train
                                                               conduct the programme.
prospective emergency respondents at Lanka Hospitals’
Dr. Pratap D. Reddy Auditorium, a facility made                All participants were awarded certificates at the end of
available by the management for 30 people from                 the training programme, which certifies that they are
various private hospitals within Colombo and seven of          competent to give medical care in an emergency,
whom were from our hospital’s Emergency Care Unit.             traumatic or otherwise.
Western Province Governor – Mr. Alavi Moulana and
Provincial Director, Health Service, Dr. Amal Harsha de
Silva inaugurated the programme.




Our ‘hospital on wheels’ ready to deal with any emergency.     Round-the-clock emergency services.




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009         33
Business Review



     Mobile Sample Collection Unit                                Care for non life threatening ailments or injuries –
     A fully effective and efficient mobile sample collection     minor cuts and bruises, dog bites, burns and other
     unit is in operation from 8 am to 4 pm and provides          similar problems is readily available during the hours
     invaluable convenience to house-bound patients as well       the Emergency OPD is open.
     as to busy professionals who can have their diagnostic
     laboratory tests done in the comfort of their homes or       Emergency Observation Area
     the convenience of their office, while the results of the    This is the third area within the Emergency Department
     tests could be collected from the hospital or be             – the Emergency Observation Area with eight beds
     delivered on request at a nominal charge.                    where patients are kept under observation prior to
                                                                  being discharged or referred for further treatment. Each
     Emergency:                                                   room is equipped with basic life support equipment,
                                                                  oxygen supply and monitors. If there is a need to be
     Triage department                                            admitted the staff in this unit attend to all the
     Complementing the existing emergency care services at        procedures to make sure the patient is transferred to a
     Lanka Hospitals, the Triage area of the Emergency            room as soon as possible.
     Department was opened in December 2008. This area is
     the first point of contact for anyone coming into Apollo
     who has met with an accident resulting in injury or
                                                                  Round the clock Ambulance Service
                                                                  Connected to the Emergency Department, the
     needs immediate medical attention.
                                                                  ambulance service, with a fleet of four fully equipped
     In the Triage area, the patient’s condition is assessed by   vehicles has been and continues to provide an excellent
     a doctor and would be stabilized if necessary before         service.
     being sent to the Emergency Room or to any other
     department according to the need. Critical patients          Apollo Centres
     would be transferred directly to the Medical Intensive
                                                                  Apollo Centres provide patients with some of the
     Care Unit or the Cardiac Intensive Care Unit as the case
                                                                  services available at our main hospital including
     may be, and only thereafter will the process of
                                                                  outpatient services, such as appointments with Apollo
     admission to the hospital be taken care of. This is a
                                                                  consultants, Pharmancy services and diagnostics. With
     critical service in extremely life threatening cases where
                                                                  three existing centres based in Negombo, Galle and
     failure to get immediate treatment would cause long
                                                                  Kalubowila, plans are currently underway to expand
     term damage.
                                                                  the network to take the brand closer to the hearts of the
                                                                  masses in localities outside of greater Colombo.
     Emergency OPD
     The Emergency OPD allows patients to walk in                 Since 2007, our resident pediatrician has made regular
     between 8 am – 7 pm to see a doctor on duty and to           visits to the Apollo Centre in Negombo. With an
     obtain immediate treatment for minor ailments, or those      expansion of the patient base, the Centres now offer
     unsure of the nature of an ailment could get medical         dermatology, nephrology and more recently orthopedic
     advice before being directed to a consultant if              and general surgeon consultations. This service has
     necessary.                                                   been hailed by our patients as one of the most
                                                                  convenient, as it eliminates unnecessary travel to
                                                                  Colombo.




34   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Corporate Social Responsibility
  Corporate Social Responsibility (CSR) was a key focus
  during the year under review in view of The Lanka
  Hospitals Corporation PLC (Lanka Hospitals) role as a
  responsible corporate citizen. Alongside its commitment
  to ensuring affordable excellence in health underscored
  by the best in medical treatment and facilities to the
  hundreds of thousands of patients who seek medical
  care, Lanka Hospitals engaged in many worthy
  programmes to give back to the community in which it
  operates.

  Reaching out                                                            Our CSR Heart Surgery baby doing well,
  The first of our corporate social responsibility                        a year on
  initiatives for the year was a fund established through                 Congenital Heart Disease (CHD) affects over 2000
  voluntary staff contributions to assist Internally                      children annually in Sri Lanka1. Many of these
  Displaced Persons (IDPs) in the North and East of the                   children can lead normal lives with corrective surgery,
  country. The proceeds were utilized to provide                          but lack the funds to afford life saving surgeries; a
  essential needs and other facilities at IDP shelters.                   setback faced by many worldwide.

  The programme was orchestrated by the Wellness                          Here is a baby we have helped together with
  Club, an internal staff committee whose function is to                  Medtronic UK.
  organise all staff related social and welfare activates to
                                                                          In June 2008, Lanka Hospitals, through its Heart
  oversee the functions of this venture. This committee
                                                                          Centre performed corrective surgery to save the life of
  went on to ensure that the best possible assistance
                                                                          a nine month old baby, who had CHD. At the time
  would be given to the internally displaced persons
                                                                          the baby looked no more than three months due to
  (IDPs), wherever they are located within the country.
                                                                          her condition stunting her growth.
  Collectively, the staff of Lanka Hospitals donated milk
                                                                          Diagnosed with a hole in the heart, the parents of this
  products and nutrients worth over one million rupees
                                                                          baby were unable to financially support the cost of
  to the IDPs, through the Governor of Western
                                                                          her corrective surgery. Lanka Hospitals funded the
  Province and relevant authorities. In addition, clothes,
                                                                          baby’s medical treatment as a CSR initiative and the
  linen and dry rations were also collected and
  channeled through the relevant authorities.


  1
      [Source: Prospective study of congenital heart disease in children. http://www.cmj.slma.lk/cmj4603/95.htm]




                                              A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009            35
Corporate Social Responsibility


     eminent paediatric cardiac surgeon and consultant                     extended a 10% discount on the Wellwoman health
     cardiologists, also gave their services free of charge.               screening package during this month.

     Medtronic in the UK kindly donated a pacemaker for                    The main message communicated was to do regular
     this child at the time of undergoing the second                       checking for lumps by self-examination and how a
     surgery. Subsequent to this successful surgery and the                simple mammogram annually could save the life of a
     surgical procedure, the child is now living a normal                  mother, a sister or a friend. This resulted in many
     life and is as strong and healthy as any other child in               women seeking more information about breast cancer
     her age group.                                                        and reacting positively by taking immediate steps to
                                                                           check and seek treatment, if required.

     Promoting awareness for breast cancer in
     Sri Lanka                                                             Lighting the sky in Blue for World Diabetes
     Breast cancer is the most common form of all cancers                  Day - Diabetes in Children
     in females in Sri Lanka, accounting for approximately
     22% of all detected cancers in females2,3. In many                    No child should die of diabetes – Everyday two
     cases cancer is curable with early detection but                      hundred children develop Diabetes worldwide4
     alarmingly, in Sri Lanka, many women suffer in                        The hospital continued its CSR initiatives by
     silence or simply do not realise that it can be cured if              highlighting community health awareness
     detected in the early stages.                                         programmes, in collaboration with the International
                                                                           Diabetes Foundation (IDF), to promote awareness for
     October is the international month for Breast Cancer                  the 2008 year’s theme ‘Diabetes in Children.’ The
     awareness. Our Health Check Department provided a                     interactive media programme was to ‘LIGHT UP THE
     suitable location to highlight awareness for this cause.              SKYLINE IN BLUE’ and Unite for Diabetics.
     The Health Check Department gave away pink
     ribbons and encouraged all women and our staff to                     IDF launched a global campaign to help ‘Bring
     wear them during the month of October and                             Diabetes to Light’ by lighting iconic monuments and
                                                                           sites in blue to mark World Diabetes Day (WWD).
                                                                           Sponsored by Sri Lanka Insurance LIFE, the front of



     2
         [Source: National Health Cancer Registry, Ministry of Health, 2005]
     3
         [Source: National Cancer Control Programme. Cancer Registry 1995, Cancer incidence 1995; Colombo Sri Lanka.]
     4
         [Source: World Heath Organisation 2007]




     Our health check department gave away pink ribbons to                 A postcard promoting awareness of Diabetes in children.
     highlight breast cancer awareness.




36   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
the majestic landmark building Galle Face Hotel was          was used to easily post all of the photos of the global
lit up in blue for four days (November 12-15) while          events and activities aimed at creating awareness
the Blue Circle logo of the campaign shone on the            using traditional and digital media.
front wall of the hotel on WWD, November 14.

The hospital invited people to come and see this at          Providing healthcare for worthy children
the Galle Face Hotel, with postcards placed at public        The hospital’s Dieticians Department conducted a
places and in guest rooms at the hotel to explain what       dietary advice programme on February 21, 2009 at
the event was in aid of. The event was announced             Shilpa Children’s Trust, an orphanage located in
live on private radio stations, requesting listeners to      Narahenpita. The aim of this initiative was to provide
send in digital photos from their mobiles to the             awareness on health to the orphans – displaced
hospital to win an Executive Health Check. The               children, unskilled youth, impoverished women and
hospital also gave a free health test for diabetes at the    single mothers.
hospital and a 10% discount on the Diabetic Health
Check during the month. Similar to the campaign on           Being an orphanage, and a place that houses many
the early detection of breast cancer held the previous       unfortunate victims of circumstances, the services
month, the hospital had many patients and visitors           provided by the hospital were appreciated by the
who made use of the free diabetic test and took              management. The children at Shilpa who have no
advantage of the discounted Diabetes Health Check.           parents to care for them, have to depend on the
                                                             generosity of corporate or social service organisations
As part of this campaign one of our Dieticians wrote         to assist them, especially pertaining to their health.
an article for a leading newspaper about the possible
onset of diabetes in children who have unhealthy             This programme assessed the height, weight, body
diets and gave advice and popularised the global IPD         mass index (BMI) of each child and provided dietary
campaign for WDD from Rio de Janeiro to Hong                 advice for the children’s daily dietary needs as well as
Kong and the leaning Tower of Pisa. This helped to           advice on other areas of health.
put Sri Lanka on the map as part of this international
campaign, where the disease is becoming more
prevalent in the population, on par with developed
countries. The popular photo-bank website Flickr.com




Giving back to the community our CSR life saving heart       Hospital staff engaged in a shramadana to clean up the
surgery for 9 month old baby.                                Neighbourhood.




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009       37
Corporate Social Responsibility



     Giving back to the community through
     shramadana
     In March 2009, due to the re-emergence of dengue
     and reports that it could turn out to be an epidemic
     the members of the Wellness Club of the hospital took
     upon themselves to do a thorough clean up of the
     environment around the hospital and the
     neighbourhood. The viral carrying mosquito that was
     posing a major threat to society had to be addressed
     resulting in the members of the club actively engaging
     in this voluntary task on a day that they would
     otherwise have had for themselves. This initiative was
     carried out in association with the Colombo Municipal
     Council and its garbage collection centre.

     The staff of our hospital had an early start on a
     Sunday morning and cleaned out all drains, lopped
     off over hanging branches, picked up leaves and
     other disposables strewn on the roads. At the end of
     the day all the garbage and debris collected were
     removed by the garbage collectors.

     It was a day well spent, and those who participated in
     the shramadana campaign went home with a sense of
     deep satisfaction as they were able to give of their
     time and energy towards an immediate need in doing
     what was needed to stave off a dangerous epidemic.




     Our CSR baby in need of heart surgery, taken before      Our CRS baby now fighting fit, one year after her successful
     undergoing the operation.                                corrective heart surgery at our Heart Centre.




38   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Annual Report of the Directors


   The Board of Directors have pleasure in presenting the        the Annual Report. There were no changes except for
   Annual Report for the year ended 31st March 2009 on           the changes which are more fully disclosed in the notes
   the affairs of the Company prepared in terms of the           to the financial statements, in the accounting policies
   provisions of the Companies Act No.7 of 2007.                 adopted in the previous year.

   These were approved by the Directors on
                                                                 Business Review
   13th August 2009.
                                                                 The Chairman’s Review and the CEO Review form an
                                                                 integral part of this Report and provide a true and fair
   General                                                       review of the performance of the company during the
   The Company was incorporated on 06th October 1997             financial year ended 31st March 2009.
   as a Private Limited Liability Company and converted to
   a Public Limited Liability Company on 09th November
                                                                 Corporate Initiatives and Social
   2001.                                                         Responsibility
                                                                 A summary of the Corporate Social Responsibility
   Principal Activity                                            activities of the Company are given on pages 35 to 38.
   The principal activity of the Company is to provide
   world class healthcare at reasonable cost. The hospital       Corporate Governance
   has contributed to the overall improvement in the             In terms of the Corporate Governance Rules of the
   standard of healthcare delivery in Sri Lanka. The             Colombo Stock Exchange, both Audit Committee and
   Hospital has opened Apollo Centres in several parts of        Remuneration Committee were formed and the
   Sri Lanka.                                                    following Directors served on the each committee.

   Review of Operations and Financial                            Audit Committee                Remuneration Committee
   Highlights                                                    Deshabandu                     Deshabandu
   The Financial Statements of the Company are set out on          A. M. de S. Jayaratne          A. M. de S. Jayaratne
   pages 50 to 67 of the Annual Report. Operational              Mr. K.W.A.U. Kariyawasam       Mr. C. R. Jansz
   highlights of the Company during the year have been           Mr. L. U. D. Fernando          Dr. B. Kaluarachchi
   detailed under the Chief Executive Officer’s Review.
                                                                 Detailed Audit Committee Report is given on page 45 of
                                                                 the Annual Report.
   Significant Accounting Policies
   The Accounting Policies adopted in the preparation of
   the Financial Statements are given on pages 54 to 57 of


   Company Results and Appropriations
   The seventh year of operation has shown Revenue of Rs. 2,469.6 million with a Net Profit of Rs. 41.1 million.
                                                                                                           (Rs in Millions)
   Particulars                                                        Year ended           Year ended             Change
                                                                       31/3/2009            31/3/2008                   %
   Turnover                                                        2,469,606,111        1,924,684,272               28.31
   Earnings Before Interest, Depreciation,
      Amortisation & Taxation (EBIDTA)                               307,715,117          144,912,594              112.35
   Interest                                                           50,630,432          177,285,558              (71.44)
   Earnings Before Depreciation,
     Amortisation & Taxation (EBDTA)                                 270,650,374          (27,097,699)              1,099
   Depreciation                                                      195,039,856          228,428,312               14.62
   Profit / (Loss) After Tax (PAT)                                    41,126,810         (286,357,381)             114.36
   The Financial Statements of the Company are given on pages 50 to 67. Operational highlights of the Company during
   the year have been detailed under the CEO’s review.



                                        A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009            39
Annual Report of the Directors


     Dividend                                                     The names of the Directors who held office during the
     The Directors do not recommend a dividend for the            year under review are as follows:
     financial year 2008/2009                                     Deshabandu A. M. de S. Jayaratne - Chairman
                                                                  Mr. D. H. S. Jayawardena
     Contributions to Charity                                     Mr. C. R. Jansz
     The sum of contributions made to charities by the            Mr. L. U. D. Fernando
     company during the financial year ended 31 March             Mr. S. M. Paranavithana
     2009 was Rs. 258,660/-                                       Mr. K. W. A. U. Kariyawasam
                                                                  Mr. G. D. C. De Silva
     Property Plant & Equipment                                   Mr. B. A. C. Fernando
     The Company has spent Rs.69.2 million on capital             Dr. A. Amarasinghe
     expenditure during the year under review. The                Dr. B. Kaluarachchi
     movements in property, plant and equipment during
     the year are set out in Note 01 to the Financial             With the change of ownership of Sri Lanka Insurance
     Statement.                                                   Corporation Limited (SLIC), the major shareholder of
                                                                  the company, SLIC nominated new Directors to the
                                                                  Board of The Lanka Hospitals Corporation PLC,
     Investments
                                                                  replacing the Directors nominated by SLIC earlier.
     There were no investments held by the company during
                                                                  Accordingly as at the date of this report the Directors of
     the year under review.
                                                                  The Lanka Hospitals Corporation PLC are as follows;

     Stock Market Information                                     Mr. Gotabaya Rajapaksa - Chairman
     An ordinary share of the Company was quoted on the           Mr. Pradeep Kariyawasam
     Colombo Stock Exchange at Rs. 14.75 as at 31st March         Dr. Nalaka Godahewa
     2009. (31st March 2008- Rs.16.00) Information relating       Dr. S. S. L. Perera
     to earnings, dividends, net assets and market value per      Dr. Ajith Amarasinghe
     share is given in pages 68 & 69 in the “Shareholders &       Mr. Asoka Nissanka Pathirane
     Investor Information Section”.                               Brigadier (Dr.) Sanjeewa Heman Munasinghe
                                                                  Mr. B. A. C. Fernando
     Substantial Shareholdings                                    Dr. B. Kaluarachchi
     The names of the twenty largest shareholders, the            Brief profiles of the above Directors are given on pages
     number of shares held and the percentage held are            8 to 10 of the Annual Report.
     given on pages 68 & 69 of the Annual Report. The
     distribution schedule of the shareholders and public
                                                                  Retirement of Directors by rotation or
     holding are found in pages 68 & 69 of the Annual             otherwise and their Re-election
     Report.                                                      Messrs Gotabaya Rajapaksa, Pradeep Kariyawasam,
                                                                  Dr. Nalaka Godahewa, Dr. S. S. L Perera, Dr. Ajith
     Going Concern                                                Amarasinghe, Mr. Asoka Nissanka Pathirane and
     The Directors are confident that the company has             Brigadier (Dr.) Sanjeewa Heman Munasinghe retire at
     adequate resources to continue business operations.          the Annual General Meeting and are eligible for election
     Accordingly, the Directors consider that it is appropriate   as Directors.
     to adopt the going concern basis in preparing the
     Financial Statements.                                        A shareholder has deposited a resolution to move at the
                                                                  Annual General Meeting to re-elect Dr. B. Kaluarachchi
     Directors as at 31st March 2009                              who has attained at the age of 71 as a Director of the
     The Board of Directors of The Lanka Hospitals                company until the conclusion of the next Annual
     Corporation PLC comprised nine members as at                 General Meeting of the Company.
     31st March 2009 and all of them served as Non-
     Executive Directors.




40   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Annual Report of the Directors


   Remuneration of Directors                                  Statutory Payments
   No remuneration has been paid to the Board of              To the best of their knowledge and belief, the Directors
   Directors during the year under review. Other expenses     are satisfied that all statutory payments in relation to the
   incurred on behalf of Board of Directors have been         Government and to the Employees have been settled to
   disclosed in the notes to the Financial Statements.        date or are provided for in the books of the company.

   Interest Registers                                         Auditors
   In terms with the Companies Act No.07 of 2007, the         Messrs KPMG Ford Rhodes Thornton & Company
   company maintained an Interest Register and the entries    Chartered Accountants who are willing to continue in
   have been made therein.                                    office are recommended for re-appointment, at a
                                                              remuneration to be decided by the Board of Directors.
   Direct and indirect shareholdings of the
   Directors during the year were as follows                  The fees paid to auditors are disclosed in Note 20 to the
   None of the Directors’ have direct or indirect             Financial Statements.
   shareholdings in the company as at 31st March 2009.
                                                              As far as the Directors are aware, the Auditors do not
                                                              have any relationship (other than that of an auditor)
   Directors Interest in Contracts                            with the company other than those disclosed above.
   The Directors’ interest in contracts and proposed          The auditors also do not have any interest in the
   contracts with the company are disclosed in Note 27 to     Company or its Group Companies. They confirm that
   the Financial Statements.                                  they are independent in accordance with the Code of
                                                              Ethics of The Institute of Chartered Accountants of
   Post Balance Sheet Events                                  Sri Lanka.
   There have been no subsequent events to the balance
   sheet date except the change of ultimate controlling       Annual General Meeting
   party of the company is the Secrertary to the Treasury.    The Annual General Meeting of the Company will be
                                                              held on Wednesday 30th September 2009 at 10.00 a.m.
   Contingent Liabilities and Capital                         at Dr. Prathap C Reddy Auditorium, The Lanka
   Commitment                                                 Hospitals Corporation PLC.
   The Contingent liabilities and capital commitment made
   on account of capital expenditure as at 31st March 2009    For and on behalf of the Board,
   are given in Note 23 to the Financial Statements.

   Stated Capital
   The Stated Capital of the Company as at 31st March
                                                              (Sgd)                       (Sgd)
   2009 was Rs.2, 671,543,090/-.
                                                              Mr. Gotabaya Rajapaksa      Dr. Nalaka Godahewa
                                                              Chairman                    Director
   Debentures
   There were no debentures issued in the year ended
                                                              By Order of the Board,
   31st March 2009. 400,000 guaranteed redeemable
   debentures of Rs 1000/- each were issued in the year
                                                              (Sgd)
   2001, of which 100,000 debentures of Rs 1000/- each
                                                              Accounting Systems Secretarial Services (Pvt) Limited,
   were redeemed on 12 December 2005, 2006, 2007 and
                                                              Secretaries to the Company,
   2008 each year respectively. There was no material
   change in the use of funds raised through a securities
                                                              25th August 2009
   issue.




                                        A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009           41
Directors Responsibility for Financial Reporting


     The responsibility of the Directors in relation to the         The Board of Directors has taken reasonable steps to
     Financial Statements is set out in the following               safeguard the assets of the Company. In this regard, the
     statement. The responsibility of the Auditors, in relation     Directors have instituted an effective and
     to the financial statements, is set out in the report of the   comprehensive system of internal controls comprising
     Auditors at page 49 of the Annual Report.                      of internal checks, internal audits and financial reviews
                                                                    to prevent and detect frauds and other irregularities.
     As per the Companies Act No.07 of 2007, the Directors
     are required to prepare financial statements for each          The Directors are confident that they have discharged
     financial year giving a true and fair view of the state of     their responsibility as set out in the statement. The
     affairs of the company as at the end of the financial          Directors also confirm that to the best of their
     year.                                                          knowledge, all statutory payments payable by the
                                                                    Company as at the Balance Sheet date have been paid
     The Directors are of the view that in preparing financial      or where necessary provided.
     statements, disclosed on pages from 50 to 67,
     a) appropriate accounting policies have been selected          By Order of the Board,
        and applied in a consistent manner and material
        departures if any have been disclosed and
        explained.
     b) all applicable accounting standards that are relevant,      (Sgd)
        have been followed                                          Accounting Systems Secretarial Services (Pvt) Limited,
     c) Judgments and estimates have been made which                Secretaries to the Company,
        are reasonable and prudent.
                                                                    25th August 2009
     The Directors are also of the view that the Company
     has adequate resources to continue in operation and
     have applied the going concern basis in preparing these
     financial statements.




42   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Corporate Governance


  It is the policy of the Company to manage its affairs in    Members of the above committees ceased to be the
  accordance with appropriate standards for good              Directors of The Lanka Hospitals Corporation PLC as at
  corporate governance.                                       the date of this report except Dr. B. Kaluarachchi.
                                                              Accordingly new members were appointed to the Audit
  The company adheres to the Code of Best Practices on        and Remuneration Committee and the composition of
  matters relating to the financial aspect of corporate       the said committees is as follows;
  governance issued by The Institute of Chartered
                                                              Audit Committee              Remuneration Committee
  Accountants of Sri Lanka at all times.
                                                              Dr. Nalaka Godahewa          Mr. Pradeep Kariyawasam
                                                              Dr. B. Kaluarachchi          Mr. Asoka Nissanka Pathirane
  Board of Directors
  The Board meets regularly and discusses matters that        Audit Committee is assisted by Chief Financial Officer
  need their direction and guidance. The Directors also       and Chief Internal Auditor whilst the Remuneration
  acknowledge that they are responsible for protecting        Committee is assisted by Chief Executive Officer and
  the rights and interest of shareholders and their           the Director- Medical Services.
  accountability towards them for the overall management
  of the company.                                             Relationship with shareholders
                                                              The shareholders have the opportunity of meeting the
  The Directors are responsible for the governance of the     Board and forwarding their questions at the Annual
  company including the establishment and maintenance         General Meeting. However, this does not limit their
  of internal control systems of the hospital, setting out    communication with the Board and they are free to
  strategic aims and providing leadership. Internal Control   communicate with the Directors, Company Secretaries
  systems are designed to meet the particular needs of        or any of the senior managers depending on the matter
  the organization and the risk to which it is exposed.       to be addressed.
  Directors are satisfied that a strong control environment
  is prevalent with the company and that the internal
                                                              Internal Control
  control systems referred to the above are effective.
                                                              The Board places a high priority on internal controls to
                                                              manage the day-to-day affairs of the company.
  Composition of the Board
  The names of the Directors of the Company who held          The Board is responsible for the Company’s systems of
  office during the financial year and the new directorate    internal controls and for reviewing its effectiveness.
  of the Company are set out on pages 8 to 10.                This is ensured and the system is designed to safeguard
                                                              assets from unauthorized use or disposal and to ensure
  Board Meetings                                              that proper records are maintained and reliable
  The Board meetings are scheduled regularly, to              information is produced including financial, operational,
  consider among other matters, the performance and           compliance controls and risk management.
  financial statements of the period and to approve
                                                              However, the Board is of the view that the company’s
  routine capital expenditure.
                                                              system of internal controls provides only reasonable
                                                              and not absolute assurance that material errors and
  Audit Committee and
                                                              irregularities are either prevented or detected within a
  Remuneration Committee
                                                              reasonable time period.
  Composition of the Audit Committee and Remuneration
  Committee which were formed during the financial year
  is as follows:                                              Disclosure
                                                              The Board’s policy is to disclose all relevant information
  Audit Committee             Remuneration Committee
                                                              to stakeholders, within the bounds of prudent
  Deshabandu                  Deshabandu
    A. M. de S. Jayaratne       A. M. de S. Jayaratne         commercial judgment, in addition to preparing the
                                                              financial statements in accordance with Sri Lanka
  Mr. K.W.A.U. Kariyawasam Mr. C. R. Jansz
                                                              Accounting Standards, the Companies Act No.07 of 2007
  Mr. L. U. D. Fernando    Dr. B. Kaluarachchi
                                                              and in conformity with Stock Exchange disclosure
                                                              requirements.



                                        A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009         43
Corporate Governance


     Going Concern
     The Board of Directors after reviewing the financial
     position and cash flow of the company is confident that
     the company has adequate resources to continue in
     operation for the foreseeable future. Accordingly, the
     “Going Concern Basis” has been adopted in the
     preparation of the Financial Statements.

     Compliance Report
     The Directors confirm that to the best of their
     knowledge all taxes and duties payable by the
     Company and all contributions, levies and taxes
     payable on behalf of and in respect of the employees of
     the company and all other known statutory dues
     payable as at the Balance Sheet date have been paid or
     are provided for in the accounts.

     Other information
     The Annual Report contains statements from the Board
     including the responsibilities of the Directors for the
     preparation of the Financial Statements and the
     Directors are of the view that they have discharged their
     responsibilities as set out in this statement. The
     performance of the company during the year under
     review and the future prospects of the company are
     covered in the Chairman’s review and CEO’s review of
     operations.




44   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Audit Committee Report


  The members served the Audit Committee during the          The Audit Committee reviewed and discussed the
  year under review and new members appointed                observations and recommendations detailed in the
  subsequently by the board of directors (following the      Internal Audit Reports together with status of
  change of the ownership of the company) are stated in      implementation and consequent action taken by the
  detail in Corporate Governance Report on page 43.          management on the recommendations made through
                                                             Internal Audit Reports.
  The purpose of the Audit Committee is to assists the
  Board of Directors on fulfilling its overall               The Internal Audit Manager submitted the Internal Audit
  responsibilities for the Financial Statements, Risk        Plan for the financial year 1st April 2009 to 31st March
  Management, Internal Control and monitoring the            2010, to the Audit Committee and after a detail review
  effectiveness of Internal Audit Function. Also it          the Internal Audit Plan was approved by the Audit
  determines the appointment, evaluation, terms of           Committee at its meeting on 18th February 2009.
  engagement and fees of the external auditors.
                                                             The Audit Committee also reviewed and approved the
  The Audit Committee held three meetings during the         Interim Financial Statements prior to the final approval
  year under review and the Internal Audit Manager           of the Board.
  functioned as the Secretary to the Audit Committee. The
  Group Chief Executive Officer, Group Head of Audit &       The Audit Committee has recommended to the Board of
  Compliance, Group Financial Controller, Chief              Directors that Messrs KPMG Ford, Rhodes, Thornton &
  Executive Officer and Chief Financial Officer attended     Company (Chartered Accountants) to be re-appointed
  the meeting by invitation. In addition Messrs KPMG         as auditors of the Company for the financial year
  Ford, Rhodes & Thornton & Company (Chartered               ending 31st March 2010, subject to the approval of the
  Accountants) represented by a partner of the firm          shareholders at the next Annual General Meeting.
  attended a meeting by invitation.

  During the meetings, the committee reviewed the
  effectiveness of the internal control system and the
  company’s approach for to its exposure to business and
  financial risks. Also it reviewed the controls and         (Sgd)
  processes in place to safeguard the assets of the          Dr. Nalaka Godahewa
  organisation and to ensure that the financial reporting    Chairman Audit Committee
  system can be relied upon in preparation and
  presentation of Financial Statements.                      25th August 2009




                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009       45
46   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Financial Reports




   Independent Auditors’ Report                   49      Accounting Policies                             54
   Balance Sheet                                  50      Notes to the Financial Statements               58
   Income Statement                               51      Shareholder and Investor Information            68
   Statement of Changes In Equity                 52      Notice of Meeting                               70
   Cash Flow Statement                            53      Form of Proxy                                   71




                                    A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009   47
48   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Independent Auditors’ Report




TO THE MEMBERS OF
THE LANKA HOSPITALS CORPORATION PLC
Report on the Financial Statements
                                                           accounting principles used and significant estimates
We have audited the accompanying financial statements
                                                           made by management, as well as evaluating the overall
of The Lanka Hospitals Corporation PLC as at March 31,
                                                           financial statement presentation.
2009, and the income statement, statement of changes in
equity and cash flow statement for the year then ended,    We have obtained all the information and explanations
and a summary of significant accounting policies and       which to the best of our knowledge and belief were
other explanatory notes as set out on pages 50 to 67 of    necessary for the purposes of our audit. We therefore
the Annual Report.                                         believe that our audit provides a reasonable basis for
                                                           our opinion.
Management’s Responsibility for the
Financial Statements                                       Opinion
Management is responsible for the preparation and fair     In our opinion, so far as appears from our examination,
presentation of these financial statements in accordance   the Company maintained proper accounting records for
with Sri Lanka Accounting Standards. This responsibility   the year ended March 31, 2009 and the financial
includes; designing, implementing and maintaining          statements give a true and fair view of the Company’s
internal control relevant to the preparation and fair      state of affairs as at March 31, 2009 and its profit and
presentation of financial statements that are free from    cash flows for the year then ended in accordance with
material misstatement, whether due to fraud or error;      Sri Lanka Accounting Standards.
selecting and applying appropriate accounting policies;
and making accounting estimates that are reasonable in
                                                           Report on Other Legal and
the circumstances.
                                                           Regulatory Requirements
                                                           These financial statements also comply with the
Scope of Audit and Basis of Opinion                        requirements of Section 151 (2) of the Companies Act
Our responsibility is to express an opinion on these       No. 07 of 2007.
financial statements based on our audit. We conducted
our audit in accordance with Sri Lanka Auditing
Standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance
whether the financial statements are free from material    Chartered Accountants
misstatement.                                              Colombo.


An audit includes examining, on a test basis, evidence     August 13, 2009
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the




                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009       49
     Balance Sheet
     As at 31 March,
                                                                                                2009                    2008
                                                                    Note                         Rs.                     Rs.
     ASSETS
     Non Current Assets
     Property, Plant & Equipment                                      1                2,387,784,266             2,513,599,520
     Advance Lease Premium                                            2                   92,264,393                78,401,315
                                                                                       2,480,048,659             2,592,000,835
     Current Assets
     Inventories                                                      3                   58,074,213                50,695,492
     Trade & Other Receivables                                        4                   91,511,465                87,711,327
     Amounts due from Related Parties                                 5                      678,020                         -
     Cash and cash equivalents                                                           107,373,835               223,649,569
                                                                                         257,637,533               362,056,388
     Total Assets                                                                      2,737,686,192             2,954,057,223
     EQUITY AND LIABILITIES
     Equity
     Stated Capital                                                   6                2,671,543,090          2,671,543,090
     Revaluation Reserve                                              7                  330,592,173            340,887,541
     Accumulated Losses                                                               (1,001,787,932)        (1,058,005,468)
     Total Equity                                                                      2,000,347,331          1,954,425,163
     Non Current Liabilities
     Retirement Benefit Obligations                                   8                  17,488,360                20,468,132
     Government Grants                                                9                     885,375                 1,771,001
     Debentures                                                      10                           -                         -
     Bank Borrowings                                                 11                  45,179,998               219,823,126
     Deferred Tax Liabilities                                        12                 341,234,637               313,306,315
     Total Non Current Liabilities                                                      404,788,370               555,368,574
     Current Liabilities
     Debentures                                                      10                            -               100,000,000
     Bank Borrowings                                                 11                   30,120,000                87,489,500
     Non Bank Borrowings                                             13                            -                         -
     Amounts due to Related Parties                                  14                   21,704,437                 5,195,781
     Trade & Other Payables                                          15                  209,518,743               161,963,716
     Income Tax Payable                                                                       36,613                   987,327
     Bank Overdraft (Secured)                                                             71,170,698                88,627,162
     Total Current Liabilities                                                           332,550,491               444,263,486
     Total Liabilities                                                                   737,338,861               999,632,060
     Total Equity & Liabilities                                                        2,737,686,192             2,954,057,223

     I certify that the above Financial Statements comply with the requirements of the Companies Act No 7 of 2007.



     (Sgd)
     Sampath Hettiarachchi
     Chief Financial Officer

     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.

                               (Sgd)                                                  (Sgd)
                         Gotabaya Rajapaksa                                   Pradeep Kariyawasam
                             Chairman                                               Director
     Colombo
     13th August 2009
     The Accounting Policies and Notes form an integral part of these Financial Statements.
     Figures in brackets indicate deductions.



50   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Income Statement
For the year ended 31 March,
                                                                                         2009              2008
                                                              Note                        Rs.               Rs.
Revenue                                                         16               2,469,606,111    1,924,684,272
Cost of Services                                                                (1,335,610,198)   (1,137,954,311)
                                                                                 1,133,995,913      786,729,961


Other Income                                                    17                   1,650,695        3,404,265
Staff costs                                                     18                (434,193,480)    (315,255,988)
Depreciation on Property, Plant & Equipment                                       (107,272,043)    (172,119,327)
Other Operating Expenses                                                          (485,303,672)    (390,072,475)
Net Finance Cost                                                19                 (37,064,743)    (172,010,293)
Profit / (Loss) Before Tax                                      20                  71,812,671     (259,323,857)
Income Tax Expense                                              21                 (30,685,862)     (27,033,524)
Profit / (Loss) for the year                                                        41,126,810     (286,357,381)
Earnings / (Deficit) per Share                                  22                        0.18             (1.53)

The Accounting Policies and Notes form an integral part of these Financial Statements.
Figures in brackets indicate deductions.




                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009     51
     Statement of Changes In Equity

                                                             Stated    Revaluation        Accumulated                Total
                                                            Capital        Reserve              Losses
                                                                Rs.             Rs.                 Rs.                 Rs.
     Balance as at 1st April 2007                     1,664,748,240     360,337,864        (781,943,455)      1,243,142,649
     Rights Issue                                     1,006,794,850                -                     -    1,006,794,850
     Loss for the year                                            -                -          (286,357,381)   (286,357,381)
     Effect of change in Tax Rate on
       Revaluation Surplus                                        -       (9,154,955)                    -       (9,154,955)
     Realisation of Revaluation Surplus (Note 7.1)                -      (10,295,368)          10,295,368                 -
     Balance as at 1st April 2008                     2,671,543,090     340,887,541       (1,058,005,468)     1,954,425,163
     Effect of change in accounting policy
       due to adoption of SLAS 16
       (Revised) - Note 8.1                                       -                -             4,795,358       4,795,358
                                                      2,671,543,090     340,887,541       (1,053,210,110)     1,959,220,521
     Profit for the year                                          -                -           41,126,810       41,126,810
     Realisation of Revaluation Surplus (Note 7.1)                -      (10,295,368)          10,295,368                 -
     Balance as at 31st March 2009                   2,671,543,090     330,592,173      (1,001,787,932) 2,000,347,331


     Revaluation reserve represents the surplus on revaluation of Buildings on Leasehold land.
     The Accounting Policies and Notes form an integral part of these Financial Statements.
     Figures in brackets indicate deductions.




52   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Cash Flow Statement
For the year ended 31 March,
                                                                                         2009             2008
                                                                                          Rs.              Rs.
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(Loss) before Tax                                                            71,812,671    (259,323,857)
Adjustments for :
Interest Expense                                                                    46,498,867     166,316,299
Interest Income                                                                    (10,889,747)     (2,494,039)
Depreciation on Property, Plant & Equipment                                        195,039,856     228,428,312
Amortisation of Government Grants                                                     (885,626)       (885,627)
Amortisation of Advance Lease Premium                                                4,683,472       4,683,472
Provision for Retiring Gratuity                                                      6,088,845       2,607,494
Provision/(Reversal of Provision) for Doubtful Debts                                (3,060,693)      5,423,121
Provision/(Reversal of Provision) for Inventories                                   (6,950,959)      8,902,247
Operating Profit before Working Capital Changes                                    302,336,687     153,657,422

(Increase)/Decrease in Inventories                                                    (427,763)      1,392,349
(Increase)/Decrease in Prepayments, Advances & Other Receivables                      (739,446)    (12,431,722)
(Increase)/Decrease in Amounts due from Related Company                               (678,020)     (3,174,877)
Increase/(Decrease) in Amounts due to Related Company                               16,508,656     (10,093,814)
Increase/(Decrease) in Payable to Contractors                                                -         (10,792)
Increase/(Decrease) in Creditors & Accrued Expenses                                 47,555,027     (43,137,616)
Cash generated from Operating Activities                                           364,555,142     126,584,512

Interest Paid                                                                      (46,498,867)   (125,932,737)
Income tax paid                                                                     (6,290,368)     (4,791,440)
Defined Benefit Plan Costs Paid                                                     (1,691,143)     (3,510,212)
Net Cash Flow from/(used in) Operating Activities                                  310,074,763     (48,033,439)

CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Property, Plant & Equipment                                            (69,224,602)     (14,080,844)
Advance Lease Premium Paid                                                         (18,546,551)     (18,546,548)
Interest Income                                                                     10,889,747        2,494,039
Net Cash Flow used in Investing Activities                                         (76,881,406)     (30,133,353)

CASH FLOW FROM FINANCING ACTIVITIES
Repayment of NDB Loan                                                              (77,100,000)     (29,160,000)
Term Loan Repaid                                                                    (1,036,378)      (6,212,458)
Rights Issue                                                                                 -    1,006,794,850
Syndicate Loan Repaid                                                             (153,876,250)     (58,329,501)
Redemption of Debentures                                                          (100,000,000)    (100,000,000)
Loan Obtained /(Repaid)- SLIC                                                                -     (281,000,000)
Temporary Loan Obtained/(Repaid)                                                             -      (80,000,000)
Net Cash Flow used in Financing Activities                                        (332,012,628)     452,092,891

Net Increase/(Decrease) in Cash and Cash Equivalent                                (98,819,270)    373,926,099
Cash and Cash Equivalents at the beginning of the year                             135,022,407    (238,903,692)
Cash and Cash Equivalents at the end of the year (Note A)                           36,203,137     135,022,407

Note A
Cash & Cash Equivalents at the end of the period
Cash and cash equivalents                                                          107,373,835     223,649,569
Bank Overdraft                                                                     (71,170,698)    (88,627,162)
                                                                                    36,203,137     135,022,407

The Accounting Policies and Notes form an integral part of these Financial Statements.
Figures in brackets indicate deductions.




                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009    53
     Accounting Policies
     REPORTING ENTITY                                                    revision affects only that period or in the period
     The Lanka Hospitals Corporation PLC is a limited                    of the revision and future periods if revision
     liability Company incorporated and domiciled in                     affects both current and future periods.
     Sri Lanka. The ordinary shares of the Company are
     listed on the Colombo Stock Exchange of Sri Lanka. The
                                                                 2.      SUMMARY OF SIGNIFICANT
     registered office of the Company and principal place of
                                                                         ACCOUNTING POLICIES
     business is located at No.578, Elvitigala Mawatha,
                                                                         Subject to the implication flowing from the
     Colombo-5, and Sri Lanka.
                                                                         application of SLAS 16, Employee Benefits
     The principal activity of the Company is providing                  (Revised 2006), which is applicable for financial
     healthcare services.                                                year 2008/09, the accounting policies set out
                                                                         below are consistent with those used in the
     The Company’s parent entity is Sri Lanka Insurance
                                                                         previous year.
     Corporation Limited. In the opinion of the directors, the
     Company’s ultimate parent undertaking and controlling               Comparative information has where necessary
     party is the Government of Sri Lanka.                               been reclassified to conform with the current
                                                                         year’s presentation.

     1.     BASIS OF PREPARATION                                         The Directors have made an assessment of the
                                                                         Company’s ability to continue as a going
     1.1    Statement of compliance                                      concern in the foreseeable future, and they do
            The financial statements have been prepared in               not foresee a need for liquidation or cessation
            accordance with the Sri Lanka Accounting                     of operations.
            Standards (SLAS) laid down by the Institute of
            Chartered Accountants of Sri Lanka and the
                                                                 2.1     Foreign Currency Translation
            requirements of the Companies Act No.7 of
                                                                         Transactions arising in foreign currencies are
            2007.
                                                                         converted into Sri Lankan Rupees at the rate of
            The Financial Statements were authorized for                 exchange prevailing at the time of transactions
            issue by the Directors on 13th August 2009.                  were effected.
                                                                         Monetary assets and liabilities denominated in
     1.2    Basis of Measurement                                         foreign currencies are translated into Sri Lankan
            The Financial Statements have been prepared                  Rupees at the appropriate exchange rate
            on the historical cost basis except that certain             prevailing at the Balance Sheet date. The
            items of Property, Plant & Equipment which are               resulting gains and losses arising there from
            measured/stated at fair value as explained in the            have been dealt with in profit and loss.
            respective notes to the Financial Statements.

     1.3    Functional and Presentation Currency                 3.      ASSETS AND BASES OF THEIR
            The Financial Statements are presented in                    VALUATION
            Sri Lankan Rupees which is the functional                    Assets classified as current assets on the Balance
            currency of the Company                                      Sheet are cash and bank balances and those
                                                                         which are expected to be realised in cash
     1.4    Use of Estimates and judgments                               during the normal operating cycle of the
            The preparation of Financial Statements in                   Company’s business or within one year from the
            conformity with SLAS requires Management to                  Balance Sheet date, whichever is shorter.
            make judgments, estimates and assumptions that
            affect the application of accounting policies and    3.1     Property, Plant and Equipment
            the reported amounts of assets, liabilities,
                                                                 3.1.1   Cost
            income and expenses. Actual results may differ
                                                                         Property, plant and equipment are stated at cost
            from those estimates and judgmental decisions.
                                                                         or valuation less accumulated depreciation and
            Estimates and underlying assumptions are                     any accumulated impairment losses. The cost of
            reviewed on an ongoing basis. Revisions to                   an item of property, plant and equipment
            accounting estimates are recognized in the                   comprises its purchase price and any directly
            period in which the estimate is revised if the




54   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Accounting Policies

      attributable costs of bringing the asset to           3.4   De-recognition
      working condition for its intended use.                     The carrying amount of an item of property,
                                                                  plant and equipment is derecognized on
      Expenditure incurred for the purpose of
                                                                  disposal; or when no future economic benefits
      acquiring, extending or improving asset of a
                                                                  are expected from its use or disposal. Gains and
      permanent nature by means of which to carry
                                                                  losses on depreciation are recognized in the
      on the business or to increase the earning of the
                                                                  profit, loss and gains are not classified as
      business has been treated as capital
                                                                  revenue.
      expenditure.
                                                            3.5   Depreciation
3.2   Revaluation
                                                                  Depreciation is recognized in profit and loss on
      A revaluation of buildings is done when there is
                                                                  a straight line basis over the estimated useful
      a substantial distinction between the fair value
                                                                  lives of items of each part of an item of
      (market value) and the carrying amount of the
                                                                  property, plant & equipment.
      buildings and is undertaken by professionally
      qualified valuers. Increase in the carrying                 The estimated useful lives are as follows.
      amount on revaluation is credited to the                    Motor Vehicle                       4 years
      revaluation surplus reserve in the shareholders             Furniture &Fittings                 10 years
      equity. Decrease that offset previous increases             Office Equipment                    10 years
      of the same individual assets are charged against           Computers                           6 2/3 years
      revaluation surplus reserve directly in equity. All         Other Equipment                     10 years
      other decreases are expenses in profit and loss.            Medical Equipment                   10 years
                                                                  Medical Vehicles                    4 years
3.3   Impairment of Assets                                        Kitchen Equipment                   3 years
      The carrying amounts of the Company’s assets
                                                                  Depreciation for buildings on leasehold land is
      are reviewed at each reporting date to
                                                                  calculated to write off the cost over the useful
      determine whether there is any indication of
                                                                  lives of 40 years.
      impairment. If any such indication exists then
      the asset’s recoverable amount is estimated.                Depreciation of an asset begins when it is
                                                                  available for use and ceases at the earlier of the
      An impairment loss is recognized if the carrying
                                                                  date that the asset is classified as held for sale
      amount of an asset or cash generating unit
                                                                  and the date that the asset is derecognized.
      (CGU) exceeds its recoverable amount. A “CGU”
      is the smallest identifiable asset group that               Depreciation methods, useful lives and residual
      generates cash flows that are largely                       values are reassessed at the reporting date.
      independent from other asset groups.
                                                            3.6   Leases
      Impairment losses are recognized in profit and
      loss.                                                       Operating Lease
                                                                  Leases where the lessor effectively retains
      The receivable amount of an asset or CGU is the
                                                                  substantially all the risks and benefits of
      greater of its value in use and its fair value less
                                                                  ownership over the leased term are classified as
      cost to sell. In assessing value in use, the
                                                                  operating leases. Rentals paid under operating
      estimated future cash flows are discounted to
                                                                  leases are recognized as an expense over the
      present value using a pre tax discount rate that
                                                                  lease term. Premiums paid are carried forward
      reflects current market assessments of the time
                                                                  and amortized over the entire lease period.
      value of money and the risks specific to that
      asset.
                                                            3.7   Inventories
      Reversal of impairment losses are recognized                Inventories are valued at the lower of cost and
      only to the extent that the asset’s carrying                net realizable value after making due allowance
      amount does not exceed the carrying amount                  for obsolete & slow moving items. Stocks items
      that would have been determined, net of                     which are identified as non-saleable are written
      depreciation or amortization, if no impairment              off against the revenue as and when those are
      loss has been recognized.                                   identified. Net realizable value is the estimated
                                                                  selling price in the ordinary course of the




                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009        55
     Accounting Policies

            business less the estimated selling expenses.           4.3.1.2 Defined Benefit Plans
            The first in first out (FIFO) basis is arrived at the           A defined benefit plan is a post-employment
            cost of inventories.                                            benefit plan other than a defined contribution
                                                                            plan. The liability recognised in the balance
     3.8    Trade and Other Receivables                                     sheet in respect of defined benefit plan is the
            Receivables are stated at the amount that they                  present value of the defined benefit obligation
            are estimated to realize, net of provision for bad              at the balance sheet date. The defined benefit
            and doubtful debts.                                             obligation is calculated annually using the
                                                                            projected unit credit method. The present value
     3.9    Cash and Cash Equivalents                                       of the defined benefit obligation is determined
            Cash and cash equivalents comprise cash                         by discounting the estimated future cash
            balances and short term deposits. Bank                          outflows using interest rates that apply to the
            overdrafts that are repayable on demand form                    benefits to be paid, and that have terms to the
            an integral part of the Company’s cash                          maturity approximately to the terms of the
            management is included as a component of                        related liability.
            cash and cash equivalents for the purpose of the
                                                                            Provision has been made for retirement
            Statement of Cash Flows.
                                                                            gratuities from the first year of service for all
                                                                            employees, in conformity with SLAS 16 (Revised
     4.     LIABILITIES AND PROVISIONS                                      2006) on Retirement Benefit Costs. However,
                                                                            under the Payment of Gratuity Act No. 12 of
     4.1    Liabilities                                                     1983, the liability to an employee arises only on
            Liabilities classified as Current Liabilities in the            completion of 5 years of continued service. The
            Balance Sheet are those, which will fall due for                liability is not externally funded.
            payment on demand or with in one year from
            the Balance Sheet date. Liabilities classified as
            Non current Liabilities in the Balance Sheet are        5.      INCOME STATEMENT
            those, which will fall due for payment after one
                                                                    5.1     Revenue Recognition
            year from the Balance Sheet date.
                                                                            Revenue is recognized to the extent that is
            All known liabilities have been accounted for in                probable that the economic benefits will flow to
            preparing the financial statements.                             the Company and the revenue can be reliably
                                                                            measured. The following specific recognition
     4.1    Trade and Other Payables                                        criteria must be met before revenue is
            Trade and Other payables are stated at their                    recognized.
            cost.
                                                                    5.1.1   Rendering of Hospital Services
     4.2    Provisions                                                      Revenue from rendering of hospital service is
            A provision is recognized, if as a result of a past             recognized in the accounting period in which
            event, the Company has a legal or constructive                  the service are rendered and performed.
            obligation that can be estimated reliably, and it
            is probable that an outflow of economic benefits        5.1.2   Sales of Goods (Pharmaceuticals)
            will be required to settle the obligation.                      Revenue from the sale of goods is recognized at
                                                                            the point of invoicing
     4.3    Employee Benefits
                                                                    5.1.3   Interest Income
     4.3.1.1 Defined contribution plan
                                                                            Interest Income is recognized on an accrual
             A defined contribution plan is a post-
                                                                            basis unless collectibility is in doubt.
             employment benefit plan under which an entity
             pays a fixed contribution in to separate entity
                                                                    5.1.4   Rental Income
             and will have no legal or constructive obligation
                                                                            Rental Income is recognized on accrued basis.
             to pay further amounts. Obligations for
             contributions to Provident and Trust Funds
                                                                    5.1.5   Other Income
             covering all employees are recognized as an
                                                                            Other Income is recognized on an accrual basis.
             expense in profit and loss as incurred.




56   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Accounting Policies

5.2     Expenditure Recognition                              5.5.5   Government Grants
        All expenditure incurred in the running of the               Government grants received to compensate the
        business, and in maintaining the capital assets in           Company for the cost of an asset is recognized
        a state of efficiency, has been charged in                   in the Balance Sheet as deferred income when
        arriving at the profit/(loss) for the year.                  there is a reasonable assurance that it will be
                                                                     received and that the Company will comply
        For the purpose of the Income Statement, the
                                                                     with the conditions attached to it. Grants so
        Directors are of the view that “nature of
                                                                     deferred are recognized in profit and loss as
        expenses” method fairly presents the elements
                                                                     income on a systematic basis over the useful life
        of the Company’s performance; hence such
                                                                     of the asset.
        presentation method is adopted.

5.5.2   Taxation                                             6.      CASH FLOW STATEMENT
        In accordance with the powers conferred by the               The Cash Flow Statement has been prepared
        Board of Investment of Sri Lanka under Section               using the “Indirect Method” in accordance with
        17 of the BOI Law No 4 of 1978, the profits                  SLAS 9, “Cash Flow Statements”. Cash and cash
        arising from business operation of the hospital              equivalents consist of cash in hand and deposits
        are exempt from income tax for a period of 12                in banks net of outstanding bank overdrafts.
        years commencing from 2002.
                                                                     Interest paid is classified as operating cash
                                                                     flows, while interest received is classified as
5.5.3   Deferred Taxation
                                                                     investing cash flows.
        Deferred tax is recognized using the Balance
        Sheet method, providing for temporary
        differences between the carrying amounts of          7.      SEGMENTAL INFORMATION
        assets and liabilities for financial reporting               A Segment is a distinguishable component of an
        purposes and the amounts used for taxation                   enterprise that is engaged in either providing
        purposes. Deferred tax is measured at the tax                products or services (Business Segment) or in
        rates that are expected to be applied to the                 providing products or services with in particular
        temporary differences when they reverse, based               economic environment (Geographical Segment),
        on the laws that have been enacted or                        which is subject to risk and rewards that are
        substantially enacted by the reporting date.                 different from those of other segments.
                                                                     However, there are no distinguishable
5.5.4   Borrowing Costs
                                                                     components to be identified as segments for the
        Borrowing Costs are recognized as an expense
                                                                     Company.
        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 capitalized
        as part of that asset during the period of
        construction/ development.




                                      A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009         57
     Notes to the Financial Statements
     1.    PROPERTY PLANT & EQUIPMENT
     1.1   Cost/ Revaluation
                                                                               Balance                            Balance
                                                                        As at 01/04/08       Additions     As at 31/03/09
                                                                                    Rs.             Rs.               Rs.
           Buildings on Leasehold Land                                    1,848,668,979               -     1,848,668,979
           Medical Equipment                                                853,104,714      51,169,424       904,274,138
           Furniture & Fittings                                             106,460,128       6,783,479       113,243,607
           Office Equipment                                                  29,140,290         585,687        29,725,977
           Computers                                                         52,778,136       2,175,444        54,953,580
           Other Equipment                                                  335,348,638       8,275,207       343,623,845
           Kitchen Equipment                                                  1,647,876         235,361         1,883,237
           Medical Vehicles                                                   8,901,926               -         8,901,926
           Motor Vehicles                                                     3,465,900               -         3,465,900
                                                                          3,239,516,586      69,224,602     3,308,741,188


     1.2   Depreciation
                                                                               Balance      Charge for            Balance
                                                                        As at 01/04/08        the year     As at 31/03/09
                                                                                    Rs.             Rs.               Rs.
           Buildings on Leasehold Land                                       75,880,801      50,644,096      126,524,897
           Medical Equipment                                                390,008,200      87,767,813      477,776,013
           Furniture & Fittings                                              49,784,072      11,011,769        60,795,841
           Office Equipment                                                  13,991,412       2,945,667        16,937,079
           Computers                                                         33,525,136       8,116,095        41,641,231
           Other Equipment                                                  150,288,464      33,947,781      184,236,245
           Kitchen Equipment                                                     71,155         606,635           677,790
           Medical Vehicles                                                   8,901,926               -         8,901,926
           Motor Vehicles                                                     3,465,900               -         3,465,900
                                                                            725,917,066     195,039,856      920,956,922


     1.3   Net Book Value as at 31st March,
                                                                                                  2009                2008
                                                                                                    Rs.                 Rs.
           At Cost/ Cost Incurred since Last Revaluation                                  2,387,784,266       2,513,599,520
           Total Carrying Amount of Property, Plant & Equipment                           2,387,784,266       2,513,599,520

     1.4   During the year ended 31st March 2008, the Company reassessed the useful life of Medical Equipment and Other
           Equipment included under Property, Plant & Equipment. Consequently, the useful life of the said assets were
           revised to 10 years from 15 years and 16 years respectively. The depreciation of Property, Plant & Equipment for
           the year ended 31st March 2008 includes additional depreciation of Rs. 79,852,531/- relating to the previous
           years due to the revision of useful life of Medical Equipment and Other Equipment.


     1.5   Depreciation on Property, Plant & Equipment
                                                                                                 2009                2008
                                                                                                   Rs.                 Rs.
           Classified under Cost of services                                                87,767,813          56,308,985
           Classified under Depreciation of Property Plant & Equipment                     107,272,043         172,119,327
                                                                                           195,039,856         228,428,312

     1.6   The land and building were revalued during the year 2006/07 by Messrs A.A.M Fathihu - F.I.V (Sri Lanka)
           Incorporated Valuer. Only the surplus on revaluation relating to the building amounting to Rs. 548,200,910/- was
           incorporated in the Financial Statements from its effictive date which is 14th October 2006. Such assets were
           valued on an open market value for existing use basis, the surplus arising from the revaluation was transferred to
           the revaluation reserve.




58   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Notes to the Financial Statements

      The carrying amount of revalued assets that would have been included in the financial statements had the assets
      been carried at cost less depreciation is as follows.

                                                Cost Depreciation if assets Cumulative net              Net carrying
                                                      were carried at cost carrying amount                   amount
                                                  Rs.                  Rs.               Rs.                      Rs.
      Building on lease hold land       1,423,309,986         180,186,701      1,243,123,285            1,772,788,178

1.7   During the financial year, the Company acquired property, plant & equipment to the aggregate value of
      Rs. 69,224,602/- (2008 - Rs. 14,080,844/-), the consideration for which was settled by cash.

2.    ADVANCE LEASE PREMIUM
                                                                                           2009                  2008
                                                                                             Rs.                   Rs.
      Balance at the beginning of the year                                            78,401,315           64,538,239
      Premium paid during the year                                                    18,546,551           18,546,548
      Amortised during the year                                                       (4,683,472)          (4,683,472)
      Balance at the end of the year                                                  92,264,393           78,401,315

      The Company has entered into a 99-year lease agreement with the Urban Development Authority. In terms of
      this agreement Rs. 463.7 Mn is to be paid between the period 1999-2026.
      Premiums paid on each installment is carried forward and amortised over the 99-year period, in accordance with
      the said agreement.
      The leasehold land was revalued on the 14th October 2007 by Messrs A.A.M. Fathihu - F.I.V. (Sri Lanka)
      Incorporated Valuer amounting to Rs. 1,320,276,000/- and this not incorporated in the Financial Statements.

3.    INVENTORIES
                                                                                           2009                 2008
                                                                                             Rs.                  Rs.
      Main Stores                                                                      9,643,661           10,030,459
      OT Stores                                                                        9,880,742           16,314,968
      Cath Lab                                                                         2,426,365            2,567,797
      Pharmacy                                                                        38,074,733           30,684,514
      Provision for Inventories                                                       (1,951,288)          (8,902,247)
                                                                                      58,074,213           50,695,492

4.    TRADE & OTHER RECEIVABLES
                                                                                             2009               2008
                                                                                              Rs.                Rs.
      Trade Receivables
      Trade Receivables - Related Parties
      Lanka Milk Foods (CWE) PLC                                                          131,431             102,077
      Distilleries Company of Sri Lanka PLC                                                     -                 500
      Lanka Bell Limited                                                                        -              76,128
      Sri Lanka Insurance Corporation Limited                                           4,844,177           7,623,358
      Hatton National Bank PLC                                                            526,640             658,394
      Stassen Exports Limited                                                             649,159           2,653,680
                                                                                        6,151,407          11,114,137
      Provision for Receivable from Stassen Exports Limited                                     -          (2,651,580)
      Total Trade Receivables from Related Parties                                      6,151,407           8,462,557

      Trade Receivables - Others                                                      94,130,805           72,014,981
      Provision for Bad & Doubtful Debts                                             (26,099,135)         (26,508,248)
      Total Trade Receivables                                                         68,031,670           45,506,733
      Deposits & Prepayments                                                          10,643,099           11,601,197
      Advance & Other Receivables                                                      6,685,289           22,140,840
      Total Trade & Other Receivables                                                 91,511,465           87,711,327




                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009          59
     Notes to the Financial Statements

     5.    AMOUNTS DUE FROM RELATED PARTIES
                                                                                                 2009                 2008
                                                                                                   Rs.                 Rs.
           Sri Lanka Insurance Corporation Limited                                             140,000                   -
           Collision Repair Centre (Pvt) Limited                                               538,020                   -
                                                                                               678,020                   -

     6. STATED CAPITAL
     6.1   Issued and Fully Paid - Ordinary shares
                                                                                                 2009                 2008
                                                                                                   Rs.                  Rs.
           Balance at the beginning of the year                                          2,671,543,090        1,664,748,240
              223,732,169 (01.04.2007 - 156,612,518) Ordinary Shares
           Issued during the year                                                                      -      1,006,794,850
              (2007/2008 - 67,119,651) Ordinary Shares
           Balance at the end of the year                                                2,671,543,090        2,671,543,090
              223,732,169 Ordinary Shares
           Stated Capital                                                                2,671,543,090        2,671,543,090
           The holders of Ordinaty shares are entitled to receive dividends as declared from time to time and are entitled to
           one vote per share at meetings of the Company.

     7.    RESERVES
                                                                                                   2009               2008
                                                                                                    Rs.                Rs.
           Capital Reserves
           Revaluation Reserve (Note: 7.1)                                                 330,592,173          340,887,541
                                                                                           330,592,173          340,887,541

     7.1   Revaluation Reserve on Property, Plant & Equipment
                                                                                                 2009                 2008
                                                                                                   Rs.                  Rs.
           Balance at the beginning of the year                                            340,887,541          360,337,864
           Effect of change in Tax rate on Revaluation surplus                                       -           (9,154,955)
           Realisation of Revaluation Surplus during the year                              (10,295,368)         (10,295,368)
           Balance at the end of the year                                                  330,592,173          340,887,541

     8. RETIREMENT BENEFIT OBLIGATIONS
                                                                                                   2009               2008
                                                                                                     Rs                 Rs
           Provision for Retiring Gratuity
           Balance at the beginning of the year                                             20,468,132           21,370,850
           Effect of change in accounting policy due to adoption of
             SLAS 16 (Revised 2006) (Note no 8.1)                                           (7,377,474)                   -
           Revised balance at the beginning of the year                                     13,090,658           21,370,850
           Current service cost                                                              3,855,799                    -
           Interest cost                                                                     1,379,974                    -
           Provision made during the year*                                                           -            2,607,494
           Actuarial (gain)/loss                                                               853,072                    -
           Payments made (including benefits paid) during the year                          (1,691,143)          (3,510,212)
           Balance at the end of the year                                                   17,488,360           20,468,132
           * Provision made as per previous policy

     8.1   First time adoption of SLAS 16 (Revised) - Defined Benefit Obligation
                                                                                                        Effect on Retained
                                                                                                         Earnings 1/4/08
           Decreased in defined benefit obligation (Note 8.1.a)                                                   7,377,474
           Increase in deferred tax liabilities (Note 8.1.b)                                                     (2,582,116)
                                                                                                                  4,795,358




60   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Notes to the Financial Statements

8.1.a The Company could not carry out an actuarial valuation of retirement benefit obligation for the periods prior to
      31st March 2008. The Company was unable to apply the change in the accounting policy retrospectively for the
      earliest period presented which is 1st January 2007. Due to the limitations of the retrospective application, the
      Company determined the effect of change in accounting policy accordingly applied the change to the opening
      balance of the retained earnings.
8.1.b Deferred tax effect arising on reversal of net provision for retirement benefit obligation due to change in
      accounting policy amounting to Rs. 2,582,116/- has been directly charged to the opening balance of the retained
      earnings.

9.    GOVERNMENT GRANTS
                                                                                             2009                2008
                                                                                                Rs                  Rs
      Balance at the beginning of the year                                               1,771,001           2,656,628
      Amortised during the year                                                           (885,626)           (885,627)
      Balance at the end of the year                                                       885,375           1,771,001

      The company has received government grant in respect of a machinery in the year 2004, and it has been accounted
      for in accordance with SLAS - 24. "Accounting for Government Grants and Disclosure of Government Assistance".

10. DEBENTURES
                                                                                              2009               2008
                                                                                                Rs                  Rs
      100,000 Guaranteed Redeemable Debentures of Rs. 1,000/- each (Note 10.1)                   -         100,000,000
      Less: Amount Payable with in one year                                                      -        (100,000,000)
      Amount Payable after one year                                                              -                   -



10.1 Type of debenture                           Redemption         Amount                 Interest        Floor - Cap
                                                       Date        Obtained                    Rate              Rates
      100,000 Guaranteed Redeemable 7 year
        floating rate                               12.12.2008   100,000,000 Avg. TB Rate + 1.6%         15.6% - 23.1%
                                                                 100,000,000

11. BANK BORROWINGS
                                                                                             2009                2008
                                                                                               Rs.                 Rs.
      Syndicate Loan (Note 11.1)                                                        50,299,998         204,176,248
      NDB Loan (Note11.2)                                                               25,000,000         102,100,000
      State Bank of India (Note 11.3)                                                            -           1,036,378
                                                                                        75,299,998         307,312,626
      Amount Payable within one year                                                    30,120,000          87,489,500
      Amount Payable after one year                                                     45,179,998         219,823,126

11.1 Syndicate Loan
     Hatton National Bank PLC 11.1 A                                                    25,000,000         102,088,750
     National Development Bank PLC 11.1 B                                               12,649,999          51,043,749
     Seylan Bank PLC 11.1 C                                                             12,649,999          51,043,749
                                                                                        50,299,998         204,176,248

11.1 A Hatton National Bank PLC
       Balance at the beginning of the year                                           102,088,750          131,253,250
       Payments made during the year                                                  (77,088,750)         (29,164,500)
       Balance at the end of the year                                                  25,000,000          102,088,750

11.1 B National Development Bank PLC
       Balance at the beginning of the year                                             51,043,749          65,626,249
       Payments made during the year                                                   (38,393,750)        (14,582,500)
       Balance at the end of the year                                                   12,649,999          51,043,749




                                        A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009        61
     Notes to the Financial Statements

     11.1 C Seylan Bank PLC
            Balance at the beginning of the year                                              51,043,749           65,626,250
            Payments made during the year                                                    (38,393,750)         (14,582,501)
            Balance at the end of the year                                                    12,649,999           51,043,749

     11.1.1 Repayments
            The syndicate loan shall be repayable by the Company in 32 consecutive quarterly installments commencing
            November 2003.

     11.1.2 Interest Rate
            The interest rate payable by the Company is computed at the interest rate of the one year weighted average
            treasury bill rate prevailing immediately prior to each interest review period plus 6% per annum. However, in the
            event of making the payment regularly and punctually, a rebate of 3% per annum is applicable to this interest rate.

     11.1.3 Security
            Security of the above syndicate loan provided were as follows.
           Partial Guarantee
           Partial guarantee is provided by the International Finance Corporation in terms of the partial syndicate loan
           guarantee agreement to the maximum value of Rs. 230,000,000/- for the principal amount excluding interest,
           penalty interest, late payment charges and all other charges payable on the principal amount.
           Non Guaranteed portion of the syndicate loan
           The non guaranteed portion of the syndicate loan will be subject to the following security.
           a) A primary concurrent mortgage over the movable and immovable assets of the company.
           b) An assignment of the project documents (other than the investment agreement)
           c) A secondary mortgage over the stock in trade, book debts and receivables.

     11.2 Soft Loan
                                                                                                     2009                2008
                                                                                                      Rs.                 Rs.
           National Development Bank PLC
           Balance at the beginning of the year                                              102,100,000          131,260,000
           Payments made during the year                                                     (77,100,000)         (29,160,000)
           Balance at the end of the year                                                     25,000,000          102,100,000

     11.2.1 Repayments
            The principal outstanding shall be repayable over a period of 8 years in 32 consecutive quarterly installments
            November 2003.

     11.2.2 Interest Rate
            The interest rate payable by the Company is computed at the interest rate of the simple average one year
            treasury bill rate prevailing six months immediately prior to each interest review period plus 7% per annum.
            However, in the event of making the payment regularly and punctually, a rebate of 3% per annum is applicable
            to this interest rate.

     11.2.3 Security
            The security provided for the above loan is as follows.
            a) A primary concurrent mortgage over the movable and immovable assets of the Company.
            b) An assignment of the project documents (other than the investment agreement).
            c) A secondary mortgage over all the stock in trade, book debts and other receivables of the company.

     11.3 Term Loan
                                                                                                     2009                2008
                                                                                                      Rs.                 Rs.
           State Bank of India
           Balance at the beginning of the year                                                1,036,378            7,248,836
           Payments made during the year                                                      (1,036,378)          (6,212,458)
           Balance at the end of the year                                                              -            1,036,378




62   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Notes to the Financial Statements

11.3.1 Repayments
       The Term Loan shall be repayable over a period of 5 years in 60 consecutive monthly installments on or before
       the 30th day of each and every month commencing from October 2003.

11.3.2 Interest Rate
       The fixed interest rate payable by the Company is 11.50% per annum.

11.3.3 Security
       Security is provided over the immovable assets of the Company.

12. DEFERRED TAX LIABILITIES
                                                                                          2009                 2008
                                                                                            Rs.                  Rs.
      Balance at the beginning of the year                                          313,306,315          282,826,647
      Effect of change in accounting policy due to the adoption
        of SLAS 16 (Revised 2006) (Note 8.1.b)                                        2,582,116                    -
      Revised balance as at 1st April 2008                                          315,888,431          282,826,647
      Tax effect on surplus on revaluation of Property, Plant & Equipment                     -            9,154,955
      Original/(Reversal) of temporary differences                                   25,346,206           21,324,713
      Balance as at the end of the year                                             341,234,637          313,306,315


12.1 Analysis of Deferred Tax Liabilities
                                                  2008/2009       2008/2009           2007/2008          2007/2008
                                                 Temporary              Tax          Temporary                 Tax
                                                 Difference                          Difference
                                                        Rs.             Rs.                   Rs.                Rs.
      Property, Plant & Equipment               444,243,555     155,485,244          367,428,126         128,599,844
      Defined Benefit Obligations               (17,488,360)     (6,120,926)          (20,468,132)        (7,163,846)
      Revaluation surplus of Buildings          548,200,910     191,870,319          548,200,910         191,870,319
                                                974,956,105     341,234,637          895,160,904         313,306,316

13. NON BANK BORROWINGS
                                                                                            2009               2008
                                                                                             Rs.                Rs.
      Sri Lanka Insurance Corporation Limited
      Balance at the beginning of the year                                                      -        281,000,000
      Loans obtained during the year                                                            -        281,000,000
      Payments made during the year                                                             -       (562,000,000)
      Balance at the end of the year                                                            -                  -

14. AMOUNTS DUE TO RELATED COMPANIES
                                                                                          2009                 2008
                                                                                            Rs.                  Rs.
      Distilleries Company of Sri Lanka PLC                                          11,027,111               28,275
      Sri Lanka Insurance Corporation Limited                                         4,165,011                    -
      Collision Repair Centre (Pvt) Limited                                           1,201,400               26,147
      Splendor Media (Pvt) Limited                                                       86,745              771,489
      Lanka Bell Limited                                                              4,752,466            4,369,870
      Stassen Exports Limited                                                           471,704                    -
                                                                                     21,704,437            5,195,781




                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009         63
     Notes to the Financial Statements

     15. TRADE & OTHER PAYABLES
                                                                                         2009             2008
                                                                                           Rs.              Rs.
          Trade payables                                                           121,993,798       61,977,769
          Interest payable - SLIC Loan                                                       -       40,383,562
          Accrued & Other payables                                                  87,524,945       59,602,385
                                                                                   209,518,743      161,963,716

     16. REVENUE
                                                                                          2009             2008
                                                                                            Rs.              Rs.
          Hospital Revenue                                                        2,215,433,232    1,724,617,260
          Pharmacy Revenue                                                          254,172,879      199,833,482
          Nursing Hostel Income                                                               -          233,530
                                                                                  2,469,606,111    1,924,684,272

     17. OTHER OPERATING INCOME
                                                                                         2009             2008
                                                                                           Rs.              Rs.
          Amortisation of Government Grants                                            885,627          885,627
          Car Park Income                                                                    -        1,692,581
          Sundry Income                                                                765,068          826,057
                                                                                     1,650,695        3,404,265

     18. STAFF COSTS
                                                                                         2009             2008
                                                                                           Rs.              Rs.
          Salaries, Fees, Wages and other related Costs                            397,135,774      287,933,391
          Defined benefit plan cost - Retirement Gratuity                            6,088,845        2,607,494
          Defined contribution plan cost - EPF & ETF                                30,968,861       24,715,103
                                                                                   434,193,480      315,255,988
          No. of Employees at the year end                                                 920              869

     19. NET FINANCE COST
                                                                                          2009            2008
                                                                                           Rs.             Rs.
          Finance Cost
          Interest on             -   Debentures                                    12,479,098       28,735,175
                                  -   Bank Overdrafts                                   62,174       27,403,302
                                  -   NDB Loan                                      12,011,969       24,963,970
                                  -   Syndicate Loan                                21,945,626       41,955,743
                                  -   Temporary Bank Loan                                    -       11,535,032
                                  -   Term Loan                                              -          710,200
                                  -   SLIC Loan                                              -       31,012,878
          Guarantee Fees                                                             4,007,365       10,803,659
          Debenture Charges                                                            124,200          165,600
          Total Finance Cost                                                        50,630,432      177,285,558

          Finance Income
          Interest Income from - Call Deposits                                       (8,160,970)     (1,829,344)
                                 - Fixed Deposits - NRFC                             (2,352,246)              -
                                 - Saving Accounts - NRFC                              (376,531)       (664,695)
          (Gain)/Loss on Translation of Foreign Currencies                           (2,675,942)     (2,781,226)
          Total Finance Income                                                      (13,565,689)     (5,275,265)
          Net Finance Cost                                                           37,064,743     172,010,293




64   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Notes to the Financial Statements

20. PROFIT/(LOSS) BEFORE TAX
     Profit/(loss) before Tax has been stated after charging all expenses including the following;
                                                                                               2009               2008
                                                                                                Rs.                Rs.
     Auditors' Remuneration
        - Audit Services                                                                   400,000              350,000
        - Non Audit Services                                                                     -                    -
     Provision/(Reversal of Provision) for Doubtful Debts                               (3,060,693)           5,423,121
     Provision/(Reversal of Provision) for Inventories                                  (6,950,959)           8,902,247
     Legal Expenses                                                                      4,075,587            2,318,406
     Amortisation of Advance Lease Premium                                               4,683,472            4,683,472

21. INCOME TAX EXPENSE
     In accordance with and subject to the power conferred on the Board of Investment of Sri Lanka, under section 17
     of the BOI Law No. 4 of 1978, the operating profits and income accruing to the Company is exempt from tax for a
     period of 12 years. However, income tax has been provided at the normal rates of tax on non-trading income.
     Tax Expense
                                                                                               2009               2008
                                                                                                Rs.                Rs.
     Current Tax Expenses
     Taxation on non-trading income (Note : 21.1)                                        3,441,484              929,390
     Irrecoverable Economic Service Charge                                               1,898,175            4,779,421
                                                                                         5,339,659            5,708,811
     Deferred Tax Expenses
     Origination of temporary differences                                               25,346,203           21,324,713
                                                                                        30,685,862           27,033,524

21.1 Reconciliation of the Income Tax Expense
     Non-Trading Income
     Sundry income                                                                         765,068              826,059
     Interest Income (Gross)                                                             9,067,744            1,829,344
     Taxable Income                                                                      9,832,812            2,655,403
     Tax Rates applicable                                                                     35%                  35%
     Tax Expense for the year                                                            3,441,484              929,390

22. BASIC EARNINGS / (DEFICIT) PER SHARE
     Earnings/(Deficit) per share is calculated based on the Profit/(Loss) attributable to shareholders divided by the
     weighted average number of ordinary shares in issue as at the balance sheet date.
                                                                                                2009               2008
                                                                                                  Rs.                Rs.
     Profit/(Loss) attributable to ordinary shareholders                                 41,126,810         (286,357,381)
     Weighted average number of ordinary shares deemed to be in issue (Note 22.1) 223,732,169                187,557,194
     Earnings/(Deficit) per Share                                                                0.18              (1.53)

22.1 Weighted Average no. of Ordinary Shares
                                                                                            2009                  2008
                                                                                              Rs.                   Rs.
     Qualifying ordinary shares at the beginning of the year                          223,732,169           156,612,518
     Effects of Shares issued during the year - Right issue                                     -            30,944,676
     Weighted average number of ordinary shares at the end of the year                223,732,169           187,557,194

23. CONTINGENT LIABILITIES
     There were no material contingent liabilities outstanding as at the balance sheet date.

24. COMPARATIVE INFORMATION
     During the year under review, the Company classified the professional fee for Visiting Consultants and cost of food
     and beverage provided to in-house patients under Cost of Services. The comparative figures relating to the said
     expense which was included under Staff Costs and Other Operating Expenses respectively, in the previous year, were
     restated to conform with the current year’s classification.



                                     A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009             65
     Notes to the Financial Statements

     25. CAPITAL COMMITMENTS & OTHERS
     25.1 Capital Expenditure Commitments
          There were no material capital commitments as at the balance sheet date.
     25.2 Commitment on Land Lease
          The Company has entered into a 99-year lease agreement with the Urban Development Authority. In terms of this
          agreement annual lease premiums payable are as follows.
            Year                                                                                                         Annual Lease
                                                                                                                           Premiums
                                                                                                                                   Rs.
            1999 to 2003                                                                                                     9,273,274 (Excluding taxes)
            2004 to 2025                                                                                                    18,546,548 (Excluding taxes)
            2026                                                                                                             9,273,274 (Excluding taxes)
            Premiums paid on each installment is carried forward and amortised over the 99-year period, in accordance with the said
            agreement.
            From the year 2027 Rs. 7,000/- per annum is payable as nominal ground rent for 5 years. Thereafter the said ground rent
            will be revised every 5 years on the basis of an annual increase no greater than the average weighted deposit rate
            published by the Central Bank of Sri Lanka prevailing at the end of each year or 10% per annum whichever is lower.

     26. EVENTS AFTER THE BALANCE SHEET DATE
            Subsequent to the balance sheet date, no circumstances have arisen which would require adjustments to or disclosure in
            the financial statements other than the following.
            Consequent to a Supreme Court judgment delivered on 4th June 2009, the ultimate parent entity of The Lanka Hospitals
            Corporation PLC is the Secretary to the Treasury.
            Futher, the Board of Directors of the Company was reconstituted on 12th August 2009.

     27. RELATED PARTY TRANSACTIONS
            (a)     Parent and Ultimate Controlling Party
                    Ultimate controlling party of the company is the Secretary to the Treasury.
            (b)     Transactions with Key Management Personnel
                    Key Management Personnel comprise the Directors of the Company.
                    (i) Loans to Directors
                        No loans have been given to the Directors of the Company.
                    (ii) Key Management Personnel Compensation
                         During the year under review, Rs. 1,178,420/- incurred on behalf of key management
                         personnel of the Company.
            (c)  Transactions with Related Companies
                 The Company has related party relationships with its related group companies. The following transactions were
                 carried out with related parties during the year ended 31st March 2009.
            The Company carried out transactions in the ordinary course of business at commercial rates with the following
            Directors/ Related entities.
     Name of                Directors      Relationship      Nature of                 Transaction          Amounts (Paid)/           Outstanding Balance
     the Company            of the Company                   Transaction                     Value              Received                 as at 31March
                                                                                             2,009                   2009               2009           2008
                                                                                                Rs.                   Rs.                  Rs.          Rs.
     Sri Lanka Insurance                        Parent        Loan repaid during                      Nil      (40,383,562/-)             Nil   Interest payable
     Corporation Ltd                            Company      the year at the rate of                                                                40,383,562/-
                                                             10% interest.
                                                             Services provided by         48,452,862/-          50,816,029/-      4,984,177/-       7,347,344/-
                                                             The Lanka Hospitals                                                 (Receivable)      (Receivable)
                                                             Corporation PLC
                                                             Fee for the insurance        34,565,702/-         (30,124,678/-)     4,165,011/-         276,014/-
                                                             policy on Fire,                                                        (Payable)      (Receivable)
                                                             Vehicle, Professional
                                                             Indemnity, Staff
                                                             Insurance, General
                                                             Insurance & Vehicle
                                                             hiring charges

     Browns Beach          Mr.D.H.S.Jayawardena Affiliated   Value of Hotel                   11,848/-             (11,848/-)             Nil                Nil
     Hotels PLC                                 Company      services provided to
                                                             The Lanka Hospitals
                                                             Corporation PLC




66   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Notes to the Financial Statements

Name of                Directors      Relationship      Nature of               Transaction          Amounts (Paid)/               Outstanding Balance
the Company            of the Company                   Transaction                   Value              Received                     as at 31March
                                                                                      2,009                   2009                   2009           2008
                                                                                         Rs.                   Rs.                      Rs.          Rs.
Collision Repair      Mr.L.U.D.Fernando    Affiliated   Services obtained for      10,467,263/-          (9,292,010/-)     Rs. 1,201,400/-              26,147/-
Centre (Pvt) Ltd.     Mr.C.R.Jansz         Company      the maintenance of                                                       (Payable)             (Payable)
                                                        vehicles
                                                        Services provided by          538,020/-                    Nil          538,020/-                     Nil
                                                        The Lanka Hospitals                                                  (Receivable)
                                                        Corporation PLC
Lanka Milk Foods      Mr.D.H.S.Jayawardena Affiliated   Services provided by          576,650/-             547,296/-           131,431/-             102,077/-
(CWE) PLC             Mr.C.R.Jansz         Company      The Lanka Hospitals                                                  (Receivable)          (Receivable)
                                                        Corporation PLC
Stassen Exports       Mr.D.H.S.Jayawardena Affiliated   Purchase of goods            6,988,537/-         (3,865,253/-)           471,704/-          2,651,580/-
Limited                                    Company      and services obtained                                                    (Payable)         (Receivable)
                                                        by The Lanka
                                                        Hospitals Corporation
                                                        PLC.
                                                                                      2,298,928           1,651,869/-           649,159/-               2,100/-
                                                        Services provided by                                                 (Receivable)          (Receivable)
                                                        The Lanka Hospitals
                                                        Corporation PLC
Lanka Bell Ltd        Mr.D.H.S.Jayawardena Affiliated   Telephone, fax and         11,969,640/-         (11,587,043/-)         4,752,466/-           4,369,869/-
                      Mr.C.R.Jansz         Company      internet services                                                        (Payable)             (Payable)
                      Mr.L.U.D.Fernando                 obtained
                                                        by The Lanka
                                                        Hospitals Corporation
                                                        PLC
                                                        Services provided by          463,488/-             539,616/-                   Nil            76,128/-
                                                        The Lanka Hospitals                                                                        (Receivable)
                                                        Corporation PLC
Hatton National       Mr.D.H.S.Jayawardena Affiliated   Current A/C                                                           71,170,698/-          88,410,769/-
Bank PLC                                   Company                                                                         (overdraft as per     (overdraft as per
                                                                                                                             book balance)         book balance)
                                                        Rent income for                                                         177,056/-             186,191/-
                                                        Extn.office                                                          (Receivable)          (Receivable)
                                                        Current A/C                                                               17,588/-             186,511/-
                                                                                                                         (Favourable as per      (overdraft as per
                                                                                                                             book balance)         book balance)
                                                        NRFC Savings A/C                                                     11,327,617/-           35,730,801/-
                                                                                                                             (Receivable)      (Favourable as per
                                                                                                                                                           book)
                                                        Services provided by         5,302,900/-          5,425,519/-           349,584/-             472,203/-
                                                        The Lanka Hospitals                                                  (Receivable)          (Receivable)
                                                        Corporation PLC
                                                        Syndicate Loan                         Nil      (77,088,750/-)       25,000,000/-         102,088,750/-
                                                                                                                                (Payable)             (Payable)
Distilleries Company Mr.D.H.S.Jayawardena Affiliated    Services provided by         1,140,864/-          1,141,364/-                   Nil               500/-
of Sri Lanka PLC     Mr.C.R.Jansz         Company       The Lanka Hospitals                                                                        (Receivable)
                                                        Corporation PLC
                                                        Services obtained by       12,926,884/-          (1,928,049/-)       11,027,111/-               28,275/-
                                                        The Lanka Hospitals                                                     (Payable)              (Payable)
                                                        Corporation PLC
Lanka Dairies (Pvt)   Mr.D.H.S.Jayawardena Affiliated   Purchase of goods by           43,641/-             (43,641/-)                  Nil                   Nil
Limited               Mr.C.R.Jansz         Company      The Lanka Hospitals
                                                        Corporation PLC
Splendor Media (Pvt) Mr.L.U.D.Fernando     Affiliated   Advertising services         3,736,990/-         (4,421,734/-)            86,745/-             771,489/-
Ltd                                        Company      obtained by The                                                          (Payable)             (Payable)
                                                        Lanka Hospitals
                                                        Corporation PLC
DFCC Bank PLC         Mr. A.M. de          Affiliated   Debenture guaranteed           67,325/-             (67,325/-)                  Nil                   Nil
                      S.Jayaratne          Company

Aitken Spence PLC     Mr.D.H.S.Jayawardena Affiliated   Services provided by          582,089/-           (582,089/-)                   Nil                   Nil
                                           Company      Aitken Spence PLC
                                                        Services provided by          369,575/-             369,575/-                   Nil                   Nil
                                                        The Lanka Hospitals
                                                        Corporation PLC




                                              A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009                                    67
Shareholder and Investor Information


                                                                                        31st March          31st March
                                                                                              2009                2008
     Earnings/(Deficit) Per Share                                                              0.18               (1.53)
     Dividend Per Share                                                                        N/A                 N/A
     Net Assets Per Share                                                                      8.94                8.74

     Market Value Per Ordinary Share
     Highest Value during the year                                                            15.25                26.25
     Lowest Value during the year                                                             11.75                15.00
     Value at the end of the year                                                             14.75                16.00
     Gearing Ratio                                                                           3.76%               20.84%
     Interest Cover                                                                            2.94                 0.00
     Quick Assets Ratio                                                                        0.60                 0.70

     Market Price during the Year (for Debentures)
     There have not been any transactions on the Trading floor since the day of listing the securities.
     (The Debentures were issued on 13th December 2001, at Rs. 1,000/- each)

     Interest Yield as at Date of Last Trade on 13th December 2001 (for Debentures)
     There have not been any transactions on the Trading floor since the day of listing the securities.

     Yield to Maturity of the Trade done on 13th December 2001 (for Debentures)
     There have not been any transactions on the Trading floor since the day of listing the securities.

     Interest rate of comparable Government security
     Type of Debenture                                       1st July 2008 -                    1st July 2007 -
                                                         12th December 2008                  30th December 2007
                                                   Interest Rate      Interest Rate
                                                 of comparable        Interest Rate     of comparable      Interest Rate
                                                   Government           Applied to        Government         Applied to
                                                        Security       Debentures             Security      Debentures
                                                            (p.a.)             (p.a.)            (p.a.)             (p.a.)
     6 year Guaranteed Redeemable Floating
       Rate Debenture                                        NA                 NA              16.05%           18.07%
     7 year Guaranteed Redeemable Floating
       Rate Debenture                                        NA               19.74                   NA         18.27%




68   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Shareholdings & Distribution as at 31st March 2009
                                                                No. of              No. of               %
      Shareholdings                                       Shareholders             Shares
         1      -      1,000                                     6,094           2,643,702             1.18
     1,001      -      5,000                                     1,726           4,109,680             1.84
     5,001      -     10,000                                       153           1,103,080             0.48
    10,001      -     50,000                                        69           1,446,130             0.65
    50,001      - 100,000                                            5             328,300             0.15
   100,001      - 500,000                                            9           1,626,828             0.73
   500,001      - 1,000,000                                          1             541,157             0.24
              Over 1,000,000                                         7         211,933,292            94.73
      Total                                                      8,064        223,732,169           100.00


Top 20 Shareholdings as at 31st March 2009
   Name                                                                      No. of Shares               %
  1   Sri Lanka Insurance Corporation Limited - General Fund                    91,080,643            40.71
  2   Distilleries Company of Sri Lanka Limited                                 63,974,015            28.59
  3   Sri Lanka Insurance Corporation Limited - Life Fund                       31,097,350            13.90
  4   Property Development PLC                                                  21,329,000             9.53
  5   Hatton National Bank PLC A/C NO 1                                          2,078,142             0.93
  6   Aegis Fund Management (Private) Limited                                    1,278,428             0.57
  7   Hatton National Bank PLC A/C NO 3                                          1,095,714             0.49
  8   Mr. K. Rajakanthan                                                           541,157             0.24
  9   Mr. M. M. C. J. Fernandopulle                                                280,000             0.13
 10   Dr. D. Rajakanthan                                                           235,957             0.11
 11   Mr. A. H. Munasinghe                                                         226,571             0.10
 12   Seylan Bank Limited / Jayantha Dewage                                        200,000             0.09
 13   Mr. P. Pitipanaarachchi                                                      165,100             0.07
 14   Dr. G. S. Gnanasekaram                                                       150,000             0.07
 15   Mr. L. Samarawickrama                                                        125,100             0.06
 16   Alchemy Heavy Metals (PVT) Limited                                           124,100             0.06
 17   Mr. A. P. Somasiri                                                           120,000             0.05
 18   Mr. G. C. Goonetilleke                                                        85,000             0.04
 19   Dr. A. M. Rajapaksa                                                           72,500             0.03
 20   Ms. N. P. Dangampola                                                          67,400             0.03


Analysis of shareholders
 Individuals/Institutions          No. of shareholders            As a %    No. of shares           As a %
Individual                                        7,974            98.88       10,966,441              4.90
Institution                                          90             1.12      212,765,728             95.10
TOTAL                                             8,064           100.00     223,732,169            100.00

Residents                                         8,042            99.73      223,432,092             99.87
Non-residents                                        22             0.27          300,077              0.13
TOTAL                                             8,064           100.00     223,732,169            100.00

Public Shareholding as at 31st March 2009
No. of Shares 37,580,161




                                  A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009   69
Notice of Meeting


     THE LANKA HOSPITALS CORPORATION PLC
     (Company Registration No PQ180)
     No.578, Elvitigala Mawatha, Narahenpita, Colombo 5

     NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of The Lanka Hospitals Corporation PLC will be
     held on Wednesday 30th September 2009 at 10.00 a.m. at Dr. Prathap C Reddy Auditorium, The Lanka Hospitals
     Corporation PLC, No.578, Elvitigala Mawatha, Colombo 5 for the purpose of conducting the following business:
        1. To receive and consider the Annual Report and the Financial Statements of the Company for the Financial Year
           ended 31st March 2009 together with the Report of the Auditors’ thereon.
        2. To elect Mr. Gotabaya Rajapaksa as a Director of the Company.
        3. To elect Mr. Pradeep Kariyawasam as a Director of the Company.
        4. To elect Dr. Nalaka Godahewa as a Director of the Company.
        5. To elect Dr. S. S. L. Perera as a Director of the Company
        6. To elect Dr. Ajith Amarasinghe as a Director of the Company.
        7. To elect Mr. Asoka Nissanka Pathirane as a Director of the Company
        8. To elect Brigadier (Dr.) Sanjeewa Heman Munasinghe as a Director of the Company
        9. To re-elect Dr. B. Kaluarachchi as a Director of the Company. Special Notice has been received from a
           shareholder pursuant to Section 211 of the Companies Act No. 07 of 2007 of the intention to propose the
           following resolution as an ordinary resolution.
            “RESOLVED THAT Dr. B. Kaluarachchi who has reached the age of 71 be and is hereby re-elected as a
            Director of the Company, and is hereby declared that the age limit of 70 years referred to in Section 210 of the
            Companies Act No. 07 of 2007 shall not apply to the said Director in accordance with section 211 of the
            Companies Act No.07 of 2007”.
        10. To re-appoint Messrs KPMG Ford Rhodes Thornton & Co, Chartered Accountants, the retiring Auditors and
            authorize the Directors to fix their remuneration.
        11. To authorize the Directors to determine donations for the year 2009 and up to the date of the next Annual
            General Meeting.
        12. To consider any other business of which due notice has been given.



     By order of the Board of Directors of
     THE LANKA HOSPITALS CORPORATION PLC



     (Sgd)
     Accounting Systems Secretarial Services (Private) Limited
     Company Secretaries

     Colombo
     25th August 2009.



     Note:
     A shareholder who is unable to attend the meeting is entitled to appoint a proxy to attend an vote in his/her place.
     A proxy need not be a member of the Company. A Form of Proxy accompanies this Notice.




70   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
Form of Proxy


  I/We ……………………………………………………………………………………………………..…….....................………
  (NIC No.) ……………………………………………………………………………………………….......................…………...
  of …………………………………………………………………………..……………………….....................…………………
  being a member/members of The Lanka Hospitals Corporation PLC, hereby appoint:
  ……………………………………………………………………......……………….of…………………...........................……..
  ………………………………………………………………………..................………………………………... (or failing him)

         Mr. Gotabaya Rajapaksa                                       of   Colombo             (or   failing   him)
         Mr. Pradeep Kariyawasam                                      of   Colombo             (or   failing   him)
         Dr. Nalaka Godahewa                                          of   Mt. Lavinia         (or   failing   him)
         Dr. S. S. L. Perera                                          of   Colombo             (or   failing   him)
         Dr. Ajith Amarasinghe                                        of   Colombo             (or   failing   him)
         Mr Asoka Nissanka Pathirane                                  of   Ratmalana           (or   failing   him)
         Brigadier (Dr) Sanjeewa Heman Munasinghe                     of   Nugegoda            (or   failing   him)
         Mr B. A. C. Fernando                                         of   Colombo             (or   failing   him)
         Dr. B. Kaluarachchi                                          of   Colombo             (or   failing   him)
  As my/our Proxy to represent and speak and vote for me/us* and on my/our behalf at the Tenth Annual General
  Meeting of the Company to be held on 30th September 2009 and at any adjournment thereof and at every poll which
  may be taken in consequence thereon.
  I/We* the undersigned, hereby direct my/our* proxy to speak and vote for me/us and on my/our behalf on the
  resolution set out in the Notice convening the meeting , as follows:
                                                                                            For        Against
  1. To receive the Report of the Directors, the Audited Accounts for the year ended
      31st March 2009 and the Report of the Auditors.
  2. To elect Mr. Gotabaya Rajapaksa as a Director in terms of Articles of Association
      of the Company.
  3. To elect Mr. Pradeep Kariyawasam as a Director in terms of Articles of
      Association of the Company.
  4. To elect Dr. Nalaka Godahewa as a Director in terms of Articles of Association
      of the Company.
  5. To elect Dr. S. S. L. Perera as a Director in terms of Articles of Association of
      the Company.
  6. To elect Dr. Ajith Amarasinghe as a Director in terms of Articles of Association
      of the Company.
  7. To elect Mr. Asoka Nissanka Pathirane as a Director in terms of Articles of
      Association of the Company.
  8. To elect Brigadier (Dr.) Sanjeewa Heman Munasinghe as a Director in terms of
      Articles of Association of the Company.
  9. To re-elect Dr. B. Kaluarachchi who retires in terms of Section 210 of the
      Companies Act No.07 of 2007.
  10. To re-appoint Messrs KPMG Ford, Rhodes, Thornton & Co., the retiring Auditors
      and authorize the Directors to fix their remuneration.
  11. To authorize the Directors to determine donations for the year 2009 and up to
      the date of the next Annual General Meeting.

  In witness my/our* hands this ………………… day of ………… Two Thousand Nine.


                                                                                  …………………………………….
                                                                                       Signature
  Notes:* Instructions as to completion appear overleaf.
          Please indicate with and “X” in the space provided, how your Proxy is to vote on the Resolutions.
          If no indication is given, the Proxy in his discretion will votes as he thinks fit.


                                       A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009     71
     INSTRUCTIONS FOR COMPLETION

     1. Kindly perfect the Form of Proxy by filling in legibly your full name, address and the National
        Identity Card number and by signing in the space provided and filling in the date of signature.
     2. The completed Form of Proxy should be deposited at the Registrars to shares, National Asset
        Management Limited, 2nd Floor, No.73, W. A. D. Ramanayake Mawatha, Colombo 2.
     3. If you wish to appoint a person other than the Chairman or a Director of the Company, please
        insert the relevant details at the space provided (above the names of the Board of Directors)
        on the Proxy Form.
     4. If the Form of Proxy is signed by an Attorney, the relative Power of Attorney should
        accompany the Form of Proxy for registration if such Power of Attorney has not already been
        registered with the Company.
     5. If the appointor is a company/Incorporated body this Form must be executed in accordance
        with the Articles of Association/Stature.




72   A New Direction | The Lanka Hospitals Corporation PLC | Annual Report 2009
                                       Corporate Information
                                       Company Name
                                         e Lanka Hospitals Corporation PLC
                                       Company No.
                                       PQ 180
                                       Registered O ce
                                       No.578, Elvitigala Mawatha,
                                       Narahenpita,
                                       Colombo 05.
                                       Tel: +94 11 5430000 Fax: +94 11 4511199
                                       E-mail: cfo@apollocolombo.com
                                       Board of Directors
                                       Mr. Gotabaya Rajapaksa
                                       Mr. Pradeep Kariyawasam
                                       Dr. Nalaka Godahewa
                                       Dr. S.S.L. Perera
                                       Dr. Ajith Amarasinghe
                                       Mr. Asoka Nissanka Pathirane
                                       Brigadier (Dr.) Sanjeewa Heman Munasinghe
                                       Mr. B.A.C. Fernando
                                       Dr. B. Kaluarachchi
                                       Secretaries
                                       M/s. Accounting Systems Secretarial Services (Private) Limited
                                       Level 4, No. 2,
                                       Castle Lane,
                                       Colombo 4.
                                       Tel: +94 11 2505152
                                       Auditors
                                       M/s. KPMG Ford, Rhodes, ornton & Co
                                       (Chartered Accountants)
                                       32A, Mohomed Macan Markar Mawatha,
                                       Colombo 3.
                                       Registrars to Shares
                                       National Asset Management Limited
                                       2nd Floor, 73,
                                       W.A.D. Ramanayake Mawatha,
                                       Colombo 2.
                                       Bankers
                                       Hatton National Bank PLC
                                       Seylan Bank PLC
                                       NDB Bank PLC
                                       Bank of Ceylon
Designed & Produced by eMAGEWISE
                                   ®



Photography by Taprobane Street
Digital Plates by Imageline
Printed by Gunaratne Offset
       No.578, Elvitigala Mawatha,
        Narahenpita, Colombo 05.
Tel: +94 11 5430000 Fax: +94 11 4511199
     E-mail: cfo@apollocolombo.com




       www.lankahospitals.com

				
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