Fortis Health. Director Discussions


Dear Members,

Your Directors have pleasure in presenting herewith the Twenty Seventh Annual Report of your Company along with the Audited Standalone and Consolidated Financial Statements and the Auditors Report thereon for the Year ended March 31, 2023.

FINANCIAL RESULTS

The highlights of Consolidated Financial performance of your Company and its Subsidiaries are as follows:

(Rs. in Lakhs)

Particulars

Consolidated
Year ended March 31, 2023 Year ended March 31, 2022
1. Revenue from operations 629,763 571,761
2. Other income 6,172 2,734

3. Total income (1+2)

635,935 574,495
4. Expenses
(a) Purchases of medical consumable and drugs 145,465 140,337
(b) Changes in inventories of medical consumable and drugs 6 (4,614)
(c) Employee benefits expense 104,688 97,294
(d) Finance costs 12,909 14,685
(e) Professional charges to doctors 131,146 110,130
(f) Depreciation and amortisation expense 31,574 30,084
(g) Other expenses 138,324 121,718

Total expenses

564,112 509,634

5. Net profit / (loss) from continuing operations before share in profit / (loss) of associates and joint ventures, exceptional items and tax (3-4)

71,823 64,861
6. Add: Share in profit of associate companies and joint ventures 2,184 2,415

7. Net profit / (loss) before exceptional items and tax (5+6)

74,007 67,276

8. Exceptional gain (refer note 4)

7,361 31,503

9. Profit / (loss) before tax from continuing operations (7+8)

81,368 98,779
10. Tax expense / (credit) 18,070 19,784

11. Net profit / (loss) for the period from continuing operations (9-10)

63,298 78,995
12. Profit / (loss) before tax from discontinued operations - -
13. Tax expense of discontinued operations - -

14. Net profit / (loss) for the period from discontinued operations (12-13)

- -

15. Net profit / (loss) for the period (11+14)

63,298 78,995

16. Profit / (loss) from continuing operations attributable to:

Owners of the Company 58,873 55,512

Non-Controlling Interest

4,425 23,483

17. Profit / (loss) from discontinuing operations attributable to:

Owners of the Company - -
Non-Controlling Interest - -

 

Particulars

Consolidated
Year ended March 31, 2023 Year ended March 31, 2022

18. Other Comprehensive Income (including OCI relating to associates and joint venture) (after tax)

(787) (4,650)

19. Other comprehensive Income / (Loss) attributable to:

Owners of the Company (771) (4,640)
Non-Controlling interest (16) (10)

20. Total comprehensive Income / ( Loss) (15+18)

62,511 74,345

21. Total comprehensive Income / (Loss) attributable to:

Owners of the Company 58,102 50,872
Non-Controlling interest 4,409 23,473

The highlights of standalone financial performance are as follows:

(Rs. in Lakhs)

Particulars

Standalone
Year ended March 31, 2023 Year ended March 31, 2022

Continuing Operations

1. Operating Income 105,293 86,261
2. Other Income 14,957 13,410

3. Total Income (1+2)

120,250 99,671
4. Total Expenditure (Excluding finance cost, depreciation & tax expenses) 91,979 74,721

5. Operating Profit (EBITDA) (3-4)

28,271 24,950
6. Finance Charges, Depreciation & Amortisation 22,212 24,221

7. Profit before exceptional items and tax (5-6)

6,059 729
8. Exceptional items 4,829 (1,628)

9. Profit before tax (7+8)

10,888 (899)
10. Tax Expenses 1,264 426

11. Net Profit for the year (9-10)

9,624 (1,325)
12. Share in profits of associate companies -

13. Profit for the year from continuing operations (11+12)

9,624 (1,325)

14. Discontinuing Operations

Profit / (Loss) before tax from discontinuing operations - -
Tax expense of discontinuing operations - -
Profit / (Loss) after tax and before minority interest from discontinuing operations - -
Share in profits / (losses) of associate companies - -
Profit for the year from discontinuing operations - -

15. Profit for the year (13+14)

9,624 (1,325)
Other comprehensive income (127) 28

Total comprehensive income (15+16)

9,497 (1,297)

STATE OF COMPANYS AFFAIR, OPERATING RESULTS AND PROFITS

For the FY 23, the Company reported a consolidated revenue from operations of Rs. 6,298 Crores compared to Rs. 5,718 Crores reported for FY 22. Revenue from Hospital business stood at Rs. 5,107 Crores compared to Rs. 4,264 Crores reported during the corresponding year. Agilus Diagnostics Limited ("Agilus"), the diagnostic business of the Company, reported gross revenues of Rs. 1,347 Crores compared to Rs. 1,605 Crores in the previous financial year. Considering elimination of inter-company revenue (within the group), net revenue of Agilus was at Rs. 1,190 Crores compared to Rs. 1,453 Crores in FY 22.

The growth in hospital business was led by higher occupancy at 67% versus 63% in FY 22 and also due to 11.5% growth in ARPOB at Rs. 2.01 Crores compared to Rs. 1.80 Crores. The Companys focus specialties comprising oncology, gastroenterology, neurosciences, renal sciences, orthopaedics and cardiac sciences grew 31.5% YoY. Revenue from International business recorded growth of 97.9% in FY 23 to reach Rs. 425 Crores compared to Rs. 215 Crores in FY 22. Decline in diagnostics business revenue in FY 23 was primarily due to significant drop in covid volumes and associated revenues. Covid business revenues contributed 4% to overall diagnostic revenues in FY 23 compared to 28% in FY 22. However, Non Covid revenue witnessed 12% growth over FY 22.

The consolidated EBITDA of the Company stood at Rs. 1,163 Crores compared to Rs. 1,096 Crores for the previous corresponding year. EBITDA margin of the Company stood at 18.5% versus 19.2% in FY 22. Hospital business EBITDA for FY 23 was at Rs. 900 Crores (excluding the dividend income of 21.9 Crores) compared to Rs. 672 Crores reported for FY 22. EBITDA margin of the hospital business stood at 17.6% versus 15.8% in FY 22.

The diagnostic business of the Company reported EBITDA of

Rs. 263 Crores compared to Rs. 425 Crores reported in the previous corresponding year. EBITDA margin of the diagnostic business stood at 19.5% versus 26.5% (basis gross revenue) for the year FY 22. The decline in EBITDA was primarily due to higher covid mix in 2021-22 and significantly lower contribution of Covid revenues in 2022-23.

Profit after tax for FY 23 stood at Rs. 633 Crores compared to Rs. 790 Crores in FY 22. PAT of Rs. 633 Crores include exceptional gain of Rs. 74 Crores which pertains to reversal of impairment in an associate Company while PAT of Rs. 790 Crores in FY 22 includes an exceptional gain of Rs. 306 Crores on remeasurement of the previously held equity interest of Agilus in the DDRC SRL Diagnostics Limited*- JV, at its fair value post acquisition of the balance 50% stake in the said JV in April 2021.

The Company maintained a comfortable liquidity position with net debt of Rs. 330 Crores as on March 31, 2023 compared to Rs. 549 Crores as on March 31, 2022 (net debt to equity of 0.04x vs 0.08x, respectively). Gross debt of the Company stood at Rs. 703 Crores as on March 31, 2023 versus Rs. 966 Crores as of March 31, 2022.

All decisions at your Company are taken keeping in mind the patient at the center. Fortis primary objective is to become the most trusted healthcare provider in India. Accordingly, your Company makes efforts to consistently improve the quality of all its services. Your Company has put together ultra-modern healthcare facilities equipped with best-in-class diagnostic and therapeutic technology and a competent team comprising of some of the finest clinical and paramedical talent available in the country. All the Fortis facilities, whether owned or operated by your Company follow globally accepted medical protocols and procedures and are focused on delivering the best possible clinical outcomes. Your Companys healthcare facilities provide high standards of secondary, tertiary and quaternary healthcare services in the specialties of Cardiac Sciences, Orthopaedics, Neurosciences, Oncology Sciences, Renal Sciences, Gastro Sciences and Mother and Child care.

During the year 2022-23, your Company further strengthened its prime medical programs in key facilities across India with addition of several eminent clinicians in Cardiac Sciences, Oncology, Neuro-Sciences, Gastroenterology and Orthopedics. The organisation invested heavily in high-end medical infrastructure and equipment including LINAC, PET CT, Gamma Knife, Da Vinci Surgical Robot, Cath Labs, Neuro-Navigation Systems and Ortho Robot.

Your Company continued to work on cluster synergies and focused its efforts towards developing synergies in Sales and Marketing, Supply Chain and Human resources. Also, several eminent clinicians were engaged with multiple units in a cluster, providing synergy to medical programs. The focus on cost transformation continued through our efforts on implementing a comprehensive program that aims to rationalise drugs and consumables cost and bring in capex efficiencies. Additionally, your Company endeavors to commission over 1,400 new beds over the next 2 to 3 years in existing facilities to leverage economies of scale – majority of bed additions are planned in Noida, BG Road, Anandapur, Mulund, Shalimar Bagh, FMRI, and Mohali.

The healthcare vertical of the Company primarily comprise day care specialty, diagnostics and tertiary and quaternary care. As of March 31, 2023, the Company had a network of 27 healthcare facilities in India with approximately 4,500 operational beds including beds under the O&M model. In addition, its Indian diagnostics business has a presence in over 1000+ cities and towns, with an established strength of over 410+ laboratories, 43+ Accreditations (NABL/NABH/CAP) and a footprint spanning 3700+ customer touch points. There has been no change in the nature of business of the Company during the year under review. The Company continues its endeavor to provide quality healthcare services with an emphasis on high degree of clinical outcomes and an unparalleled patient experience.

Further information on Company performance is detailed in the Company section of the "Management Discussion and Analysis" in the Annual Report.

SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW

The Company strategically reviewed and prioritized key areas to drive revenues and operational performance. These include aspects related to evaluating the current portfolio of the Companys facilities and planned bed expansion, initiating cost optimisation measures across the network, investing in technology and medical equipment and further strengthening its clinical excellence program. Details about which are mentioned in the Business Strategy section of the Management Discussion and Analysis Report (‘MDA).

Further, the Board has from time to time during the year under review updated its stakeholders regarding the key developments that took place by disseminating necessary information to the stock exchanges and through various means of communications to the investors. Some of key matters are mentioned below: Post a successful bid, your Company had entered into share subscription Agreement dated July 13, 2018, for issuance of 235,294,117 Shares at a price of INR 170 per share for an aggregate consideration upto INR 4,000 Crores (Rupees Four Thousand Crores only) to Northern TK Venture Pte Limited ("NTK"), an indirect wholly owned subsidiary of IHH Berhad (‘IHH). Consequently, after obtaining regulatory and statutory approvals such as from Securities and Exchange Board of India,

Competition Commission of India and in terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, IHH made Mandatory Open Offer for acquisition of upto 197,025,660 Equity Shares representing additional 26% of the expanded voting share capital of your Company ("Fortis Open Offer") and another Mandatory Open Offer for acquisition of up to 4,894,308 fully paid up equity shares of face value of INR 10 each, representing 26% of the fully diluted voting equity share capital of Fortis Malar Hospitals Limited ("Fortis Malar Open Offer").

After the Preferential Allotment on November 13, 2018, public announcement was made on December 07, 2018 regarding Fortis Open Offer and Fortis Malar Open Offer, thereafter the Honble Supreme Court of India had on December 14, 2018 passed an order ("Status Quo Order") directing "status quo with regard to sale of the controlling stake in Fortis Healthcare to Malaysian IHH Healthcare Berhad be maintained". In light of the Status Quo Order, Fortis Open Offer and Fortis Malar Open Offer were put on hold until further order(s)/ clarification(s)/ direction(s) issued by the Honble Supreme Court of India. Vide its order dated November 15, 2019, the Honble Supreme Court had issued suo-moto contempt notice to, among others, your Company, and directed its Registry to register a fresh contempt petition in regard to alleged violation of the Status Quo Order ("Contempt Petition"). Petitions before the Honble Supreme Court including the suo-moto contempt have been disposed of vide judgement dated September 22, 2022 ("Judgement"). No finding of contempt has been made against either your Company, or its independent directors. Based on legal advice, the Company is of the clear view that the Status Quo Order dated 14th December 2018 no longer exists. Therefore, your Company is continuing to pursue actions which are in the best interest of its shareholders and itself. Our promoter is simultaneously seeking legal counsel for pursuing and securing the Open Offer. In the Judgement, it has been stated by the Honble Supreme Court that RHT Transaction appeared prima facie to be an acquisition of proprietary interest to subserve the business structure of the Company. It also passed certain directions inter alia, that the High Court of Delhi may consider issuing appropriate process and appointing forensic auditor(s) to analyze the transactions entered into between FHL and RHT and other related transactions. Your Company plans to strenuously object to any contemplation of a forensic given that in the Judgment, no wrongdoing by the Company had even been alluded to. The Companys stated position is that these transactions were done in compliance with applicable laws, post requisite corporate and regulatory approvals and necessary disclosures/ announcements. Currently, Your Company, is vehemently opposing the application filed by Daiichi before the High court for appointment of forensic auditor.

OTHER RELEVANT MATTERS

Based on complaint filed by your Company with the Economic Offences Wing ("EOW") in November 2020 against the erstwhile promoters/ erstwhile promoters group company in respect of certain transactions, First Information Report (FIR) was registered on July 3, 2021, against them. EOW is investigating the matter. The said Complaint is also being investigated by the Enforcement Directorate and the Company is co-operating and providing requisitioned documents/information to it. Further, pursuant to the order dated 17th February 2018 of MCA, SFIO has been investigating into the affairs of your Company/ its subsidiaries. The Company is co-operating in the said investigation.

Fortis Hospitals Limited had filed a civil suit for recovery of Rupees 52,019 lacs before Honble Delhi High Court against the ex-promoters and certain entities which is sub-judice.

DIVIDEND AND TRANSFER TO RESERVES

The Board of Directors has recommended a final dividend Rs. 1 (One) per equity share at the rate of 10% of the face value of the shares of the Company for the year ended March 31, 2023, be paid subject to the approval of the shareholders, to those shareholders whose names appear in the register of members as on the record date in proportion to the paid up value of the equity shares.

Refer the Companys policy on Dividend Distribution available on the website of the Company at https://www.fortishealthcare.com/ drupal-data/investors/Policy%2Bon%2BDividend%2BDistribution. pdf.

MATERIAL CHANGES

There are no material changes and commitments, affecting the financial position of your Company which have occurred between the end of the FY 23 and the date of this report.

Post closure of the financial year, as part of our inorganic growth strategy, your Company pursuant to the approval of the Board of Directors signed definitive agreements with the VPS Group for the acquisition of Medeor Hospital in Manesar, Gurugram, Haryana which will add 350 beds to your Companys network. The acquisition fits well within your Companys strategic approach of expanding its presence in focus geographic clusters, including Delhi NCR.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Statutory Auditors in their report to the Board of Directors on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("The Act") have given the opinion that the Company and such companies incorporated in India which are its subsidiary companies and joint venture companies (jointly controlled company), have, in all material respects, adequate internal financial controls with reference to consolidated financial statements and the financial statements of the Company and such internal financial controls were operating effectively as at March 31, 2023, based on the internal financial controls with reference to consolidated financial statements and the financial statements of the Company, criteria established considering the essential components of such internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. The Auditors opinion on adequacy and operating effectiveness of internal control is self-explanatory.

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

During the year under review there has been no change in the subsidiaries / joint venture and associate Companies.

Further note that your Board of Directors have adopted a policy for determining "material subsidiary" pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said policy is available at https:// w w w . f o r t i s h e a l t h c a re . c o m / d r u p a l - d a t a / i n v e s t o r s / Policy%2BOn%2BMaterial%2BSubsidiary.pdf In terms of the said policy, as on April 01, 2023, Fortis Hospitals Limited (FHsL), International Hospital Limited (IHL), Fortis Hospotel Limited (FHTL) and Agilus Diagnostics Limited are considered as Material Subsidiary(ies). Necessary compliances w.r.t. material subsidiaries have been duly carried out. The copies of the Secretarial Audit Reports of the material subsidiaries issued by the Company Secretary in Practice forms part of this report.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The consolidated financial statements of your Company and its subsidiaries, prepared in accordance with applicable accounting standards, issued by the Institute of Chartered Accountants of India, forms part of the Annual Report. In terms of the Section 136 of the Companies Act, 2013, financial statements of the subsidiary companies are not required to be sent to the members of the Company. Your Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and said annual accounts will be available for inspection and are also available on the website of the Company. Performance and financial position of each of Subsidiaries, Associates and Joint Ventures included in the Consolidated Financial Statements of your Company is enclosed herewith as "Annexure - I" in the prescribed format (Form AOC-1).

The contribution of the subsidiary/associates/joint venture companies to the overall performance of your Company is outlined in Note No. 26 of the Consolidated Financial Statements for the year ended March 31, 2023.

LOANS/ADVANCES/INVESTMENTS/GUARANTEES

Particulars of Loans / Advances / Investments /guarantees given and outstanding during the FY 23 forms part of the Notes to the Financial Statements.

PUBLIC DEPOSITS

During the financial year under review, your Company has not invited or accepted any deposits from the public, pursuant to the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as of the date of Balance Sheet.

UTILISATION OF FUNDS

The details of utilisation of funds earlier raised through preferential allotment are mentioned in Notes to Financial Statements. During the year under review, no preferential allotment was made by the Company.

AUDITORS

M/s B S R & Co. LLP, (Registration No. 101248W/W- 100022), Chartered Accountants, were appointed as Statutory Auditors of your Company for a period of five years i.e. up to the conclusion of the Annual General Meeting to be held in the year 2024.

The statutory auditors have, in their report to the Board of Directors on the consolidated financial statements of the Company made the following comments which are self- explanatory and are categorised as "Emphasis of Matter", hence no comments in this regard have been offered by your Board of Directors: a) Note 27 and 28 of the consolidated financial statements which deals with various matters including the ongoing investigation by Serious Fraud Investigation Office ("SFIO on Fortis Healthcare Limited and its subsidiaries regarding alleged improper transactions and non-compliances with laws and regulations including Companies Act, 2013 (including matters relating to remuneration paid to managerial personnel). These transactions and non- compliances relate to or originated prior to take over of control by reconstituted board of directors of Fortis in the year ended March 31, 2018. As mentioned in the note, the Group has been submitting information required by SFIO and is also cooperating in the regulatory investigations. As explained in the said note, the Group had recorded significant adjustments/ provisions in its books of account during the year ended March 31, 2018. The Company has launched legal proceedings and has also filed a complaint with the Economic Offences Wing (‘EOW) against erstwhile promoters and their related entities based on the findings of the investigation conducted by the Group. Further, based on managements detailed analysis and consultation with external legal counsel, a further provision has been made and recognised in the year ended March 31, 2021 for any contingency that may arise from the aforesaid issues. As per the management, any further Financial impact, to the extent it can be reliably estimated as at present, is not expected to be material. b) Note 29 of the consolidated financial statements relating to the order dated September 22, 2022 of the Honble Supreme Court, whereby it has directed the Honble High Court of Delhi inter alia that it may also consider issuing appropriate process and appointing forensic auditor(s) to analyse the transactions entered into between the Company and RHT Health Trust and other related transactions. The above-mentioned Note also states that the Honble Supreme Court has observed that prima facie, it appears to be acquisition of proprietary interest of RHT Health Trust by the Holding Company are to subserve the business structure of the Holding Company.

Further, as per the requirement of Companies Auditor Report Order (CARO), Rules, 2016, there was no fraud other than as disclosed pertaining to earlier years reported by the above stated auditors during the year under review.

Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by your Company in respect of its hospital activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Jitender, Navneet & Co., Cost Accountants to audit the cost accounts of your Company for the FY 23 at a remuneration of

Rs. 3.5 Lakhs (plus out of pocket expenses and taxes). As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s Jitender, Navneet

& Co., Cost Auditors is included in the Notice convening the ensuing Annual General Meeting. Further, in terms of the Companies (Accounts) Rules, 2014, it is confirmed that maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is applicable on your Company and accordingly such accounts and records are properly made and maintained.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Sanjay Grover & Associates, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Company has complied with the provisions of Secretarial Standards. The Secretarial Audit Report is enclosed herewith as "Annexure - II".

Further, pursuant to the provisions of Regulation 24A, the secretarial audit reports of material subsidiaries are attached as Annexure- II(A).

Internal Auditors

Upon the recommendation of the Audit Committee, the Board of Directors has appointed Mr. Rajiv Puri, Head Risk and Internal Audit as the Chief Internal Auditor of your Company and authorised him to engage independent firm(s), if needed, for conducting the internal audit for the FY 23 to enable him to extend adequate coverage of internal audit checks.

For FY 23, Internal Audit(s) were performed in accordance with the Internal Audit plan approved by the Audit Committee. In addition to the internal IA team conducting audit(s) covering key business processes as per approved plan, Deloitte was engaged as an external service provider to perform Internal Audit for specific processes.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During FY 2017-18 the Company, the Securities and Exchange Board of India (SEBI), initiated investigation w.r.t. siphoning of approx. INR 5 billion by its ex-promoters. Post investigation, SEBI had issued two Show Cause Notices i.e., dated November 12, 2020 (SCN 1) and April 9, 2021 (SCN 2), respectively. A Show-Cause Notice (SCN- 1) was issued by SEBI to various entities including the Company and FHsL on November 20, 2020. In the SCN- 1, it was inter-alia alleged that the consolidated financials of the Company at the relevant period were untrue and misleading for the shareholders of the Company and the Company had circumvented certain provisions of the SEBI Act, Securities Contracts (Regulation) Act, 1956, and certain SEBI regulations. In response, a joint representation/reply was filed by the Company and FHsL on December 28, 2020 praying for quashing of the SCN- 1 by inter alia reiterating that the Company and FHsL, were in fact victims of the schemes of the Erstwhile Promoters (Malvinder Mohan Singh and Shivinder Mohan Singh) and justice, equity and fairness demands that the victim ought not be punished for the offences of the wrongdoers. All acts impugned in the SCN- 1 relate to the period when the Erstwhile Promoters controlled the affairs of Company and FHsL and the erstwhile Promoters are no longer involved in the affairs of the Company and FHsL. The Erstwhile Promoters were responsible for financial misrepresentation and not the Company and FHsL. Post resignation of the Erstwhile Promoters in February 2018, the Board of Directors of the Company, solely comprising independent Directors looked after its welfare. The new promoter of the Company (i.e. NTK Venture Pte. Ltd.) assumed control of the Company pursuant to a preferential allotment, which was approved by both Competition Commission of India and SEBI, which approved the open offer that had got triggered pursuant to such preferential allotment. Any adverse orders against the Company and FHsL would harm their existing shareholders, employees and creditors. The Company and FHsL have taken substantial legal actions against the Erstwhile Promoters and significant steps to recover the diverted amounts. SEBI passed an order dated 19.04.2022 w.r.t SCN -1 directing the Company & FHsL to pursue the measures taken to recover the amount of INR 397.12 Crores (approx.) along with the interest from Erstwhile Promoters; & Audit Committee to regularly monitor the progress of such measures and report the same to board of directors at regular intervals. SEBI had imposed a penalty of Rs. 50 lakh and Rs. 1 Crore on FHsL and the Company respectively. On April 09, 2021, SEBI issued another Show cause notice (SCN - 2) to various noticees including Escorts Heart Institute and Research Centre Limited ("EHIRCL"). In the said show cause notice, with respect to EHIRCL, it was alleged that INR 567 crore was lent by the Company to EHIRCL in 2011, which was subsequently transferred by EHIRCL to Lowe Infra and Wellness Private Limited ("Lowe") in multiple transactions for the purchase of a land parcel. This land parcel, which was allegedly indirectly to be acquired by the Company through its subsidiary EHIRCL and another entity Lowe, was then transferred to RHC Holdings Private Limited ("RHC Holdings"). It was stated in the said Show cause notice that a structured rotation of funds was carried out to portray that the loan extended by the Company for the purchase of land had been paid back with interest in the year 2011. It is alleged that the Company was actually paid back by RHC Holding over a period of four years ending on July 31, 2015. In this respect, the Company and FHsL funds were allegedly routed through various layers in order to camouflage the transactions, and to circumvent legal provisions with respect to related party transactions.

In the Show cause Notice dated April 9, 2021 EHIRCL had been clubbed along with the other noticees, and had been painted with the same brush as the other noticees in alleging that certain noticees, including EHIRCL, were part of a fraudulent and deceptive device wherein they acted in fraudulent manner which led to the misuse and/or diversion of funds from a listed company i.e. FHL, amounting to approximately Rupees 397.12 crore for the ultimate benefit of RHC Holdings and the erstwhile promoters. Thereby, it is alleged that EHIRCL has aided and abetted the routing of funds from the Company, ultimately to RHC Holdings, for the benefit of the promoter entities.

Further, after adjudicating the Show Cause Notice dated April 9, 2021, SEBI passed an order dated 18.5.2022 wherein it held that EHIRCL is responsible for fraudulent scheme perpetrated at the behest of the then management of FHL/FHsL for the benefit of their then promoters and therefore has violated the relevant provisions of SEBI (PFUTP) Regulations. SEBI acknowledged the fact that EHIRCL working under a completely new management presently and the said revamped management has already taken steps against the erstwhile promoters for the fraud perpetrated under their watch, shall serve as a mitigating factor while computing the penalty under section 15HA of the SEBI Act. Having said this, SEBI vide order dated 18.5.2022 imposed a penalty of INR 1 crore on EHIRCL for violation of certain provisions of SEBI laws. The reasoning that was adopted for imposition of penalty on EHIRCL appears to be exactly on the same lines as the reasoning in the case of FHL and FHsL. SEBI vide order dated May 18, 2022, passed in the Show Cause Notice dated April 9, 2021, imposed a penalty of INR 1 (one) Crore on EHIRCL after finding that there has been violation of certain provisions of SEBI laws. While imposing the said penalty, SEBI acknowledged that EHIRCL working under a completely new management presently and the said revamped management have already initiated civil and criminal actions against the erstwhile promoters for the fraud perpetrated under their watch. Both the orders dated 19.4.2022 and 18.5.2022 passed by SEBI have been appealed against by the Company, FHsL and EHIRCL before Securities Appellate Tribunal, Mumbai ("SAT"). Pursuant thereto, SAT has stayed both the SEBI Orders dated 19.4.2022 and 18.5.2022 respectively subject to deposit of 50% of the penalty amount with SEBI, which has been deposited in compliance of SAT orders. Appeals are pending adjudication.

CAPITAL STRUCTURE/STOCK OPTION

During the year under review, there is no change in the capital structure of the Company.

The Company currently manages its stock options through "Employee Stock Option Plan 2007" and "Employee Stock Option Plan 2011" ("Schemes") as approved by the shareholders. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Schemes of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10 each of the Company. During the year under review, no option was granted by the Company. Disclosure pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 for the year ended March 31, 2023 is available at the website of the Company at https://www.fortishealthcare.com/investors- Annual Report / ESOP Disclosure 2022-23.

During the year under review, "no stock options were granted or exercised under the terms of the "Employee Stock Option Plan 2007 and "Employee Stock Option Scheme 2011". The certificate from the Secretarial Auditors of the Company stating that the Schemes have been implemented in accordance with the SEBI Regulations would be placed at the ensuing Annual General Meeting for inspection by members.

The Company has not made any provision of money for purchase of, or subscription for, its own shares or of its holding Company.

Details pertaining to shares in suspense account are specified in the report of Corporate Governance forming part of the Board Report.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website at https://www.fortishealthcare.com/ drupal-data/2023-07/Annual%20Return%20MGT-7%20 2022-23Rs.0.pdf.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The particulars required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, regarding Conservation of Energy and Technology Absorption, is given in "Annexure – III", forming part of the Boards Report. Further, details pertaining to Foreign Exchange Earnings and Outgo is as given below:

TOTAL FOREIGN EXCHANGE EARNED AND USED (BASED ON STANDALONE FINANCIAL STATEMENTS)

( Rs. in Crores)

Particulars

Amount
Foreign Exchange earned in terms of Actual 10.79
Inflows
Foreign Exchange outgo in terms of Actual 2.34
Outflows

Note: Earning and expenditure in foreign currency is on accrual basis.

CORPORATE SOCIAL RESPONSIBILITY - OUR JOURNEY THROUGH THE PAST YEAR

The Board of Director has approved the CSR policy for the Company. The said policy approaches this area under the philosophy that the Company efforts should strive towards building and sustaining a healthier humanity. The policy elucidates the concep t of growing our business in a socially and environmentally responsible manner through an active role in empowering communities and driving social development and positive change.

With the above in mind the policy seeks as an objective to bring focus, leveraging its inherent skills, experience and knowledge. The policy holds itself out as a forward-looking aspirational charter which recommends liberal interpretation, promotes activity under the spirit of partnership and recommends that initiatives be targeted to the needs of the disadvantaged, vulnerable and marginalised sections of society. While the underlying guidance is to bring alignment of varied activities under the focus umbrella, it recognises the need to record presence and contribution in such weak links in society where its mere presence and support could drive significant social benefit. In keeping with such themes, program/s such as supporting charitable healthcare infrastructure, disaster relief, preventive healthcare awareness through different channels of communication, remain well within the range of the policy objectives.

The policy as approved by the Board is available on the Companys web site at https://www.fortishealthcare.com/drupal-data/investors/ Corporate%2BSocial%2BResponsibility%2BPolicy%2B2022.pdf During the year, the Company has engaged Sattva Media and Consulting Private Limited ("Sattva Consulting") as an external agency/ advisor for undertaking CSR activities of the Company and its subsidiaries for the financial year 2022-23 to 2023-2024. Further, Sattva Consulting is engaged in the business of, inter alia, providing consultancy services in the social impact sector and implementation of corporate social responsibility programmes/initiatives.

This year Company and its subsidiaries contributed their CSR Fund to ICMR, Yova Unstoppable, IIT Madras as detailed hereinbelow:

Entity

CSR Obligation CSR PROJECT Administrative
for FY 23 IIT Madras ICMR YUVA Overheads (max. 5% of CSR Budget)
Fortis Healthcare Limited 4,66,32,689 - 2,12,91,744 2,49,90,945 3,50,000*
Fortis Hospotel Limited 4,69,91,400 87,26,591 3,79,14,809 - 3,50,000*
Agilus Diagnostics Limited 2,84,60,639 2,83,60,639 - - 1,00,000*
SRL Diagnostics Private Limited1 73,14,615 72,14,615 - - 1,00,000*
DDRC SRL Diagnostics Limited2 1,54,98,155 1,53,98,155 - - 1,00,000*

Total CSR Spend

14,48,97,498 5,97,00,000 5,92,06,553 2,49,90,945 10,00,000*

*Actual amount paid to Sattva Consulting for FY 23.

Note: 1 The new name of the said companies has been reserved by Registrar of Companies (‘RoC) as Agilus Pathlabs Private Limited vide letter dated June 08, 2023. The said company is in the process of making application to the RoC for seeking approval of the new name.

2 The new name of the said company has been reserved by Registrar of Companies (‘RoC) as DDRC Agilus Pathlabs Limited vide letter dated June 07, 2023. The said company has made an application to the RoC seeking approval of the new name & the same is awaited.

Report pursuant to Clause O of Sub-Section 3 of Section 134 of the Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is given in "Annexure IV".

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of your Company as on date of this report comprises Eleven (11) directors, of which one (1) is a Managing Director and CEO (Executive Director), four (4) are Independent Directors and rest of the six (6) directors are Non-Executive & Non-Independent Directors. Pursuant to Sections 152 of the Companies Act, 2013, Mr. Joerg Ayrle and Mr. Heng Joo Joe Sim are liable to retire by rotation and being eligible offers themselves for re-appointment at the forthcoming Annual General Meeting of your Company.

During the year under review, Dr. Kelvin Loh resigned from the directorship w.e.f. February 22, 2023; and Mr. Takeshi Saito and Dr. Farid Bin Mohamed Sani resigned from the directorships of the Company w.e.f. March 28, 2023. The Board expressed its gratitude for the service provided by the aforementioned Directors and acknowledged that they took their Board duties with dedication, grace and seriousness. It may be noted that, pursuant to Shareholder Subscription Agreement ("SSA") with Northern TK Venture Pte. Ltd. ("NTK") dated July 13, 2018, NTK has a right to appoint 2/3rd of the Directors on the Board of the Company and accordingly, to fill the aforesaid vacancies, NTK nominated new candidates on the Board of the Company. The Board appointed, pursuant to the recommendation of the Nomination & Remuneration Committee, Mr. Mehmet Ali Aydinlar and Mr. Tomo Nagahiro, as Additional Non-Executive Directors, of the Company w.e.f. March 28, 2023. Further, pursuant to Regulation 17(1C) of SEBI LODR, the Company obtained approval of shareholders for confirming the appointment of Mr. Mehmet Ali Aydinlar and Mr. Tomo Nagahiro as Non-Executive Directors of the Company vide a postal ballot on May 10, 2023.

Post closure of the financial year, the Board of Directors has also appointed Mr. Lim Tsin-Lin as Additional Non-Executive Director on the Board w.e.f May 04, 2023. As per regulation 17(1C) of SEBI LODR, the Company is seeking approval of shareholders for confirming the appointment of Mr. Lim Tsin-Lin on the Board of the Company by way of postal ballot dated May 23, 2023. All Independent Directors have submitted declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the FY 23, Six (6) meetings were held by the Board of Directors. The details of board/committee meetings and the attendance of Directors are provided in the Corporate Governance Report.

Details of Key Managerial Personnel are as under:

Name

Designation
Dr. Ashutosh Raghuvanshi Managing Director and
Chief Executive Officer
Mr. Vivek Kumar Goyal Chief Financial Officer
Mr. Murlee Manohar Jain* Company Secretary
Mr. Sumit Goel** Company Secretary

* Appointed with effect from April 05, 2022. **Resigned with effect from April 04, 2022.

Disclosures regarding the following are mentioned in report on Corporate Governance forming part of this report.

1. Composition of Committee(s) of the Board of Director and other details;

2. Details of establishment of Vigil Mechanism;

3. Details of remuneration paid to all the Directors including Stock options; and

4. Commission received by Independent Director; if any.

BOARD EVALUATION

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board and the respective committees are required to carry out performance evaluation of the Board as a body, the Directors individually, Chairman as well as that of its Committees.

The Nomination of Remuneration Committee ("NRC") and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its committees and individual directors is required to be made.

The following process of evaluation was approved by the Nomination and Remuneration Committee and the Board of Directors:

Sr. No.

Process

Remarks

Criteria for Evaluation (including Independent Directors)

1.

Kick Off Board Evaluation Program

The NRC Chairperson kick starts the process. The relevant questionnaires were circulated to the Board members.

-

2.

Evaluation forms

The feedback so received from the members on the process was collated by Chief Human Resource Officer (CHRO).

This includes Board focus (Strategic inputs), Board Meeting Management, KPIs, suggestions to improve Board performance Board Effectiveness Management Engagement, governance, risk management and addressing of follow up requests.

3.

Evaluation by the Board and of Independent Directors

A compilation of the individual self-assessments was placed at the meetings of the Independent Directors (IDs) and the Board of Directors (BoD) for them to review collectively.

This includes demonstration of integrity, commitment, attendance at the meetings, contribution and participation, professionalism, contribution while developing Annual Operating Plans, demonstration of roles and responsibilities, review of high risk issues & grievance redressed mechanism, succession planning, working of Board Committees etc.

4.

Final recording and reporting

Based on the findings of the assessment, CHRO circulated a report to the Board members for further discussion and action planning. Based on the above, a final report on Board Evaluation 2022-23 was presented at a meeting of the Board of Directors.

The report includes key highlights, a presentation of an analysis of each response, actionable insights and comments.

MANAGERIAL REMUNERATION

Disclosures pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as under:

(a) Comparison and ratio of the remuneration of each director to the median remuneration of the employees of the Company for the FY 23*

Name of the Director

Designation

Remuneration Median Ratio
of Director (Rs. in Crores) Remuneration of Employees
1. Dr. Ashutosh Raghuvanshi* Managing Directors & CEO 8.15 344:33
2. Mr. Ravi Rajagopal# Chairman (Independent Director) 1.03 43:1
3. Dr. Kelvin Loh Chi Keon@ Non- Executive Director 0.05 2:1
4. Mr. Dilip Kadambi Non- Executive Director 0.09 3:1
5. Dr. Farid Bin Mohamed Sani& Non- Executive Director 0.00 -
6. Mr. Heng Joo Joe Sim Non- Executive Director 0.06 2:1
7. Mr. Indrajit Banerjee# Independent Director 0.92 0.0237 38:1
8. Mr. Joerg Ayrle Non- Executive Director 0.12 5:1
9. Ms. Shailaja Chandra# Independent Director 0.91 38:1
10. Ms. Suvalaxmi Chakraborty# Independent Director 0.83 35:1
11. Mr. Takeshi Saito& Non- Executive Director 0.03 0.42:1
12. Mr. Mehmet Ali Aydinlar$ Non-Executive Director 0.01 0.42:1
13. Mr. Tomo Nagahiro$ Non-Executive Director 0.01 0.42:1

* Annual Salary paid including the perquisites (if any) which is considered for taxation, however, does not include the reimbursements paid against the expense bills submitted.

# The Non-Executive/Independent Directors are paid sitting fees & commission on the basis of their attendance at the Board/ Committee Meetings. Any variation highlighted above in remuneration of these Directors is on account of number of meetings held or attended during the year.

@ Dr. Kelvin Loh Chi Keon resigned w.e.f. February 22, 2023

& Dr. Farid Bin Mohamed Sani and Mr. Takeshi Saito have resigned as Directors of the Company w.e.f. March 28, 2023. $ Mr. Mehmet Ali Aydinlar and Mr. Tomo Nagahiro were appointed as Non-Executive Directors of the Company w.e.f.

March 28, 2023.

(b) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, during the financial year under review:

Employee Name

Designation

% of increment
Dr. Ashutosh Raghuvanshi Managing Director and Chief Executive Officer 0%
Mr. Vivek Kumar Goyal Chief Financial Officer 6%
Mr. Sumit Goel* Company Secretary 0%
Mr. Murlee Manohar Jain** Company Secretary 0%

*Resigned w.e.f April 04, 2022. **Appointed w.e.f April 05, 2022.

(c) The percentage increase in the median remuneration of employees in the financial year- 9%

Increases in annual CTC of the employees between the current and last financial year are considered. (d) The number of permanent employees on the rolls of the Company is 2975 as on March 31, 2023.

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration **

Particulars

For the FY 23
(A) Average percentile increases already made in the salaries of employees other than the managerial personnel 8.42%
(B) Percentile increase in the managerial remuneration 6%
Comparison of (A) and (B) +2.42%

Justification

8.42% is the Company average salary increment excluding KMPs. The increment rates vary based on the Job grades and performance ratings of the employees.

Any exceptional circumstances for increase in the managerial remuneration

-

** Salary increases % (percentage) considered in comparison between salary as on 31/3/2022 and 31/3/2023 of the active employees as on 31/3/2023 *** KMP Salary revision- only one member had a salary increase hence the increment rate applied with the same rate.

(f) Duringthefinancialyear2022-23,Rs.2,85,95,850.00variable pay was paid to Dr. Ashutosh Raghuvanshi, MD and CEO, Rs. 93,20,000.00 to Mr. Vivek Kumar Goyal, Chief Financial Officer, and Rs. 11,18,218.00 to Mr. Sumit Goel, erstwhile Company Secretary, and Rs. 5,00,000.00 to Mr. Murlee Manohar Jain, Company Secretary for year 2022-23. ****** ******Variable pay includes Annual Variable Payments and Leave balance encashments.

(g) Remuneration paid to Directors and KMPs is as per the Remuneration Policy of the Company.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director etc. Details of Remuneration Policy and changes, if any, are stated in the Corporate Governance Report.

Your Company has from time to time familiarised the Board of Directors with the Companys operations, their roles, rights, responsibilities in your Company, nature of the industry in which your Company operates, business model of your Company, etc. The same is governed by a template viz Board of Directors Governance Standard and it is available on the website of the Company at https://www.fortishealthcare.com/drupal-data/investors/ Board%2Bof%2BDirectors%2BGovernance%2BStandards.pdf

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members.

RELATED PARTY TRANSACTIONS

Disclosures as required under Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in "Annexure - V" in Form AOC- 2 as specified under the Companies Act, 2013.

The Related Party Transactions are placed before the Audit Committee for approval as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at https://www.fortishealthcare.com/drupal-data/investors/ Policy%2Bon%2BRelated%2BParty%2BTransactions.pdf None of the current Directors has any pecuniary relationship or transaction vis-?-vis your Company, except to the extent of sitting fees and remuneration/commission approved by the Board of Directors and/or shareholders of your Company and as disclosed in this Annual Report.

RISK MANAGEMENT POLICY

Your Company has designed a risk management policy and framework for risk identification, assessment, mitigation plan development and monitoring of action to mitigate the risks. The key objective of the Enterprise Risk Management Policy ("ERM Policy") policy is to provide a formalised framework to enable judicious allocation of resources on the critical areas which can adversely impact your Companys ability to achieve its objectives. The policy is applicable to the Company and its subsidiaries. This framework enables the management to develop and sustain a risk-conscious culture, wherein, there is a high degree of organisation-wide awareness and understanding of external and internal risks associated with the business. The policy defines an architecture and oversight structure to assist effective implementation. By clearly defining terms and outlining roles and responsibilities, ERM promotes risk ownership, accountability, self-assessment and continuous improvement to minimise adverse impact on achievement of business objectives and enhance your Companys competitive advantage. Your company has also defined quantitative key risk indicators (KRIs) to monitor the effectiveness of actions take to mitigate the identified risks. The details thereof are covered under the Management and Discussion Analysis Report which forms part of the Annual Report.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT

Your Company has adopted a Policy for Prevention, Prohibition and Redressal of Sexual Harassment. As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has constituted Internal Complaints Committees (ICC). During the year, your Company has received 5 complaints on sexual harassment and all 5 complaints have been resolved with appropriate action taken and no complaint was pending as on March 31, 2023. The same may also be read in terms of Companies (Accounts) Rules, 2014.

DISCLOSURE REQUIREMENTS

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report with Auditors certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

CODE OF CONDUCT

Declaration by Dr. Ashutosh Raghuvanshi, Managing Director and Chief Executive Officer confirming compliance with the ‘Fortis Code of Conduct is enclosed with Corporate Governance Report.

CERTIFICATE BY STATUTORY AUDITORS FOR DOWNSTREAM INVESTMENT

A certificate from the Statutory Auditors of your Company stating that your Company has duly complied with the requirements of downstream investment made by your Company to second level entities in accordance with Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 would be available at the Annual General Meeting for inspection by members.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: (a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures therefrom, if any; (b) The selection and application of accounting policies were assessed for their consistent application and judgements and estimates were made that are reasonable and prudent so as to give a true and fair view of the state of the affairs of your Company at the end of the financial year and of the profit of your Company for the Financial Year ended March 31, 2023; (c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; (d) the Statements have been prepared on a going concern basis; (e) Proper internal financial controls have been laid down and that such internal financial controls are adequate and are operating effectively; and (f) There are proper systems in place to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the Central Government, State Governments and all other Government agencies for the assistance, co-operation and encouragement they have extended to the Company. Your Directors also take this opportunity to extend a special thanks to the medical fraternity and patients for their continued cooperation, patronage and trust in the Company. Your Directors are glad to place on record that your Company has posted a strong financial performance during the year and greatly appreciate the commitment and dedication of all the employees, that has contributed to the growth and success of the Company. Your Directors also thank all the strategic partners, business associates, Banks, financial institutions for their assistance, co-operation and encouragement to the Company during the year. Last but not the least your Directors thank the Shareholders of the Company for their continued faith in the Company.