Fortis Health. Management Discussions


SECTION I

Indian Healthcare Sector

The Indian healthcare sector has become a major contributor to Indias growth and employment, covering diverse segments like hospitals, medical devices, clinical trials, telemedicine, medical tourism, health insurance and medical equipment.

The sector is expanding rapidly, driven by enhanced coverage, services and growing investments by both public and private players. The governments initiatives to increase healthcare spending and improve healthcare infrastructure have further bolstered the industrys growth.

COVID-19 has not only brought challenges, but also presented several growth opportunities to the healthcare sector. The pandemic has highlighted the critical role of healthcare organisations and it has driven transformation by accelerating the pace of reforms in Indias healthcare sector.

Furthermore, the industrys expansion continues to be fueled by the rising need for healthcare services due to increasing life expectancy, increasing prevalence of chronic diseases and changing lifestyles of the Indian population. As a result, the healthcare sector has emerged as a significant contributor in generating job opportunities and adding to the countrys GDP.

A. Current Landscape and Key Highlights

The Indian healthcare industry has experienced various trends in 2022 that have contributed to its growth, making it the largest service sector in the country. The overall size of the industry is estimated to be $372 Billion with a CAGR of 22% (2016 – 2022).

The industrys expansion can be attributed to several factors, including increasing life expectancy of Indias population, a growing middle class, an increasing prevalence of lifestyle diseases, public-private partnerships and the adoption of digital technologies like telemedicine.

Additionally, the industry has attracted investors, resulting in increased FDI inflows over the last two decades.

The hospital industry is projected to grow to $132 Billion by FY 23 at a CAGR of 16-17%.

The private sector is the major contributor in the healthcare spending in India, unlike most other countries where public spending dominates.

Key highlights:

1. The governments plan to increase healthcare spending to 2.5% of GDP by 2025, which is expected to lead to the development of new healthcare facilities and expansion of existing ones

2. There is a decrease in the percentage of healthcare spending paid out of pocket by individuals, from 62.6% in FY 15 to 47.1% in FY 20 (Source: Ministry of Health)

3. The Indian government is expected to increase partnerships with private healthcare providers to improve access to healthcare services, particularly in rural and underserved areas

4. Greater adoption of digital health solutions such as electronic health records (EHRs), mobile health apps, and remote patient monitoring systems.

5. The adoption of telemedicine, which has been accelerated by the COVID-19 pandemic and is projected to grow at a CAGR of 31% between 2020 and 2025 to reach at $5.4 Billion.

6. An increasing demand for home healthcare services driven by an aging population and rising burden of chronic diseases. Indias home healthcare market is expected to grow at a CAGR of 19.2% to reach at $21.3 Billion by 2027

7. India aims at becoming self-reliant in the manufacturing of medical devices. In FY 20, the total device manufacturing market in India was sized at around $11 Billion. By 2025, the industry is expected to grow fivefold to $49.5 Billion.

B. Government Policies and Key Initiatives

Indias population is over 1.4 billion and is spread across 28 states and 8 union territories. Public Health and Hospitals are primarily the responsibility of the respective State Governments. However, under the National Health Mission (NHM), technical and financial support is provided to the States/UTs to strengthen the public healthcare system which includes upgrading selective services in the state Medical Colleges, District Hospitals, Sub District Hospitals and Community Health Centres. From 2018 the Ayushman Bharat PM-JAY has been in progress as a centrally sponsored scheme with funding shared between the Centre and States. The entitlement criteria covers both urban and rural areas but is based on economic status and deprivation of the beneficiaries. Another promising area relates to the Ayushman Bharat digital mission which has widened the scope for telemedicine to provide services even to remote parts of the country.

In the Union Budget for 2023-24, the government has announced various programs for the healthcare, pharmaceuticals and medical devices industries.

The budget includes an allocation of Rs. 88,956 Crores towards healthcare expenditure, which represents a 2.7% increase from the previous year.

It emphasises the governments focus on two key drivers of improved healthcare: increasing the number of trained medical professionals and investing in research and development. The increased allocations reflect the governments commitment towards a more efficient healthcare system.

2023-24 Budget Highlights

The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), which aims to rectify the regional imbalance in the availability of trustworthy tertiary services by setting up AIIMS type hospitals and Upgradation of Government Medical College (GMC)/ Institutions, received an allocation of Rs. 10,200 Crores (a 23% increase from revised estimates for 2022-23).

Human Resources for Health and Medical Education has been allotted Rs. 6,500 Crores ($780 Million)

The National Health Mission, which aims at providing universal access to equitable, affordable & quality healthcare services, has received an allocation of Rs. 29,085 Crores ($3.5 Billion)

PM - Ayushman Bharat Health Infrastructure Mission

(PM-ABHIM) has been allocated Rs. 5,156 Crores ($675.7 Million) to improve Indias primary, secondary and tertiary care service and strengthen the health infrastructure

To promote medical tourism, the Indian government has extended the e-medical visa facility to citizens of 156 countries

Skill India Digital platform is launched to provide healthcare skilling courses and certifications with the participation of public and private sector institutes, academic institutes, and the National Skill Development Corporation (NSDC)

C. Growth Drivers

Indias healthcare industry is predicted to sustain robust demand, propelled by an ageing population, a surge in lifestyle diseases, increasing affordability leading to better access to quality medical care and greater penetration of medical insurance. We believe Hospitals segment being the largest component of the overall healthcare industry will be the biggest beneficiaries of the healthcare market in India as public spend is likely to be limited to ~25-30% of annual healthcare spend. a. Key Growth Drivers for the Hospital Industry

Lower Healthcare Spend: India healthcare spend is 3% of GDP vs 19% in case of US. This works out to be US$ 57 per person annually on health care vs US$ 11,702 in case of US

Low public spending and limited penetration of health insurance has led to ‘out-of-pocket expenditure accounting for ~63% of total healthcare which is one of highest in the world and well above global average of 22%

Increasing burden of Non-Communicable Diseases: Non-communicable diseases (NCDs) encompass a vast group of diseases such as cardiovascular diseases, cancer, diabetes and chronic respiratory diseases. NCDs contribute to around 38 Million (68%) of all the deaths globally and to about 5.9 Million (60%) of all deaths in India. The majority of NCD deaths occur in low and middle-income countries such as India, which is undergoing an epidemiological health transition owing to rapid urbanisation, which in turn has led to an overall economic rise, but with certain associated flipsides.

Increase in Health Insurance Penetration: During 2020-21, the general and health insurance companies witnessed a 14.7% growth in premium collection while the compounded annual growth rate over 2016 to 2021 stood at 17.7%. In addition, it was observed that the market share of private sector insurers increased from 18.5% in 2016-17 to 27.3% in 2020-21 while market share of public sector insurers declined from 63.3% to 47.8% in the same period.

Significant opportunity from medical tourism: Medical tourism is expected to be one of significant growth drivers for Indias Healthcare Sector. The medical tourism market is expected to grow at a CAGR of 65- 70% between FY 21-25 (Source: PL Equity Research). In addition, India offers a significant cost advantage globally along with best-in-class clinical outcomes.

Continuing demand supply gap for quality healthcare services and healthcare infrastructure: India currently has 1.3 hospital beds per 1,000 population. There is also a shortage of skilled health workers, with 0.65 physicians per 1,000 people (the World Health Organisation standard is 1 per 1,000 people) and 1.3 nurses per 1,000 people.

India would need an additional 3 Million beds to achieve the target of 3 beds per 1,000 people by 2025. Furthermore, another 1.54 Million doctors and 2.4 Million nurses will be required to meet the growing demand for healthcare in India.

D. Technological Transformation

The HealthTech industry in India has seen impressive growth, outpacing most other segments of the healthcare sector, with a remarkable CAGR of 39%, following global trends. By 2033, it is projected to reach $50 Billion (Source: RBSA Advisors). Currently, the industry comprises six segments, namely telemedicine, e-pharmacy, fitness, wellness, healthcare IT, analytics, home healthcare and personal health management.

Data mining, clinical diagnoses and self-monitoring devices to assist in maintaining a healthy lifestyle are just some of the ways in which the healthcare industry in India is constantly evolving in tandem with technological advancements.

The Indian government and private sector stakeholders have supported the development of technologically advanced medical devices in addition to digital infrastructure. Increasing smartphone and Internet penetration, and initiatives like the government-run National Digital Health Mission are collectively responsible for the accelerated pace of health systems digitisation in India.

The MedTech market in India, which comprises mainly of medical equipment, life sciences, and in-vitro diagnostic technology, was valued at around $10.4 Billion in 2020 and is projected to grow at a CAGR of 37% to reach $50 Billion by 2025. (Source: IBEF) Meanwhile, the use of digital healthcare technologies, including Artificial Intelligence (AI) and telemedicine, has increased significantly globally, with investments reaching nearly $57 Billion in 2021.

Examples of digital transformation in the healthcare industry include telemedicine, AI-assisted medical devices, blockchain for electronic health records and cloud-enabled data management platforms.

Additionally, Indias virtual or remote healthcare industry will be crucial going forward. According to a market research report, remote healthcare global market is expected to be around $57.1 Billion by 2030. A significant factor that will help its growth will be the use of AI. In the coming years, the healthcare space is likely to be affected by 5G. With the help of 5G, everything can be done in a distributed manner, including robotic surgeries, extensive healthcare management in rural areas, as well as virtual health education and health research.

The following prominent trends can be anticipated as the healthcare industry reinvents itself for a new digital future:

Key Technology Transformation Trends in the Healthcare Sector

Increased Focus on Big Data & Analytics: Numerous healthcare organisations are progressively putting resources and investment into clinical data analytics for analysing patient data. For example, adaptive data analytics (ADA) is already at the forefront of the new age research of the industry, to enhance the ability to quickly

Growth of AI/ML and analytics – AI and advanced analytics is enabled by digitalisation, which makes it easier to analyse things like predictive analytics, telemedicine, precision medicine, population health analytics and so on. According to a market research report, the AI in Healthcare Market is expected to reach $102.7 Billion by 2028, up from $14.6 Billion in 2023.

Robotics in healthcare: Robots aid healthcare professionals in completing routine tasks more efficiently, freeing up their time to concentrate on other crucial duties. Such automation in medical care makes operations more secure and more affordable for patients.

Remote health and virtual care becoming mainstream: Telemedicine accounted for 30% of all patient visits during the pandemic, and digital health platform transactions increased by three times. The domestic telemedicine market is anticipated to reach $5.5 Billion by 2025, according to an EY study.

Leveraging Blockchain: Providers are developing novel solutions that make use of the emerging blockchain technology to enhance the performance, security, and transparency of healthcare data sharing. Blockchain has the potential to revolutionise the healthcare industry.

Internet of Medical Things (IoMT): The Healthcare industry is emulating the concept of IoMT, a connected infrastructure of smart devices and software applications to improve healthcare services. The Internet of Things (IoT) in healthcare and remote patient monitoring are developing simultaneously to revolutionise patient care. According to a market forecast, The IoT Healthcare Market is worth $158.1 Billion with 50 Billion connected devices by 2020.

Cloud Technology: Patients and healthcare professionals now have access to cloud technology, which has grown significantly. More cloud data centers are needed for the training and operation of AI and machine learning tools, which are growing in number.

E-Pharmacies: E-pharmacies in India will serve 70 Million households by FY 25, according to the industry body FICCI, as internet use and digital awareness rise.

E. Indian Diagnostic Sector

The diagnostic industry is growing steadily in India and is expected to grow at a CAGR of approximately 5% to 7% over the next five years. The domestic diagnostic industry is currently valued at Rs. 800 billion and is broadly classified into two segments: pathology testing and imaging diagnostic services.

Pathology testing involves sample collection, such as blood, urine, and stool, which is then analyzed using laboratory equipment and technology. On the other hand, imaging diagnostic services produce images that are used for medical consultation, such as CT scans, MRI, and PET scans. The pathology segment is estimated to contribute approximately 57% of the total market revenue.

Despite the presence of over 100,000 labs, the diagnostic industry in India is highly fragmented and under-penetrated. There are various delivery formats available, including hospital labs, standalone labs, national chains and regional chains. However, the majority of the market is dominated by fragmented standalone centers.

A major part of the diagnostic business comes from urban areas, indicating a significant growth opportunity for national players in both urban and rural areas, where penetration is still low. There is a potential for organic as well as inorganic growth in highly penetrated areas such as cities and low-penetrated areas like rural regions. a. Key Drivers of Growth:

The diagnostics industry is expected to grow due to several factors, including the rising per capita income in India, which has led to an increase in the middle classs affordability and access to better healthcare services. Additionally, the countrys increasing population and changing nature of diseases, such as the contagiousness of viruses like COVID-19, are driving the demand for diagnostic services.

The expansion of organised healthcare and government initiatives aimed at promoting high-quality diagnostics and wellness services are also expected to boost growth. Furthermore, the use of technology in healthcare is growing rapidly, presenting opportunities for healthcare providers. b. Key Threats and Risks:

The diagnostics industry in India faces several threats and risks, including rising competitive intensity within the organised market, which is already small due to the highly fragmented nature of the industry. Low entry barriers and the asset-light model, which reduces initial setup costs, make it easy for new players to enter the market. The industry is also geographically concentrated in urban regions, making it susceptible to demand-supply dynamics. The governments price capping under National Essentials Diagnostic List (NEDL) could be a significant risk for routine tests, which account for a substantial portion of sales for leading players. Furthermore, input costs and inflationary pressures are putting pressure on margins and there is a shortage of skilled manpower in the industry.

F. Outlook

Healthcare is expected to remain a major contributor to the economy in the coming years as various policies, innovations and investments are anticipated to shape the industrys future impacting economic growth. The increasing focus on digital health solutions, telemedicine and other technological advancements in the healthcare industry has opened new avenues for growth and innovation. The government plans to increase the budget allocation for public health spending to 2.5% by 2025, which will be beneficial given the huge demand for tertiary care and specialty hospitals.

Critical Role of Private Players: Private healthcare players will continue to play a critical role in the industry as they continue to provide healthcare services to more than 70% of the countrys rural population and 80% of the urban population. In addition, private healthcare players will continue to invest towards addition of new bed capacity, bringing in new high end medical infrastructure and uplifting the overall healthcare services in the country by adopting new technologies; all to further strengthen the overall patient experience and clinical outcomes. Growing Home Healthcare Solutions: It is expected to be one of the fastest growing segments in India, though it is currently at a relatively nascent stage. The growth would be driven by the rising elderly population in the country, increase in the incidence of chronic diseases, enhanced demand for constant personalised care as well as the emergence of nuclear family structures in urban areas.

Advancements in Technology: Advancements such as AI, wearables and other mobile technologies, along with Internet of Things, are expected to take the healthcare services to the next level. Key segments where new opportunities are likely to emerge for health technology players include development of tools to facilitate emergency care and improvements to medical infrastructure, through technology-based optimisation. This includes expanding the scope of wearable devices to track health conditions, developing patient-facing mobile health applications as well as greater integration of AI, robots and blockchain technologies.

We believe that the future of diagnostics and healthcare can be built upon several pillars, including anytime anywhere connected and home-based care and testing, data driven clinical interventions, automation, advanced testing technologies, and supply chain efficiency. We believe that prevention and early diagnosis to be central to the health, and sophisticated tests and tools could mean most diagnosis take place at or close to peoples homes.

Proactive and Integrated System: The future of health will be driven by proactive and integrated system of health where transformational technologies like AI, quantum computing, cloud storage, virtual reality will play a pivotal role. Next-generation sequencing (NGS) has enabled scientists and researchers to better understand the genetic mechanisms linked to conditions, in areas such as womens health or in diseases like cancer and inherited disorders. More importantly, these advances have given rise to improved diagnostics for early intervention and monitoring treatment response, ensuring patients get the best therapies possible.

The hospital sector in the country has emerged sharper in the aftermath of the COVID pandemic. The evolving industry environment and the opportunities for growth have led to an increasing interest by investors, private equity players, other corporate and healthcare players for investment in the sector. This has also led to consolidation opportunities in the industry highlighting the need to gain size and scale in order to draw higher operating leverage. At the same time, the market environment is competitive and regulatory uncertainties remain. Healthcare organisations are making efforts to grow revenue, enhance patient experience and better clinical outcomes in order to grow their market share in an evolving environment.

SECTION II

A. About Fortis Healthcare limited

Fortis Healthcare is one of the largest healthcare services providers in India with 27 healthcare facilities and 4,500+ operational beds including O&M beds and over 400 diagnostics centres as of March 31, 2023. The Company offers a full spectrum of integrated healthcare services ranging from clinics to quaternary care facilities and a wide range of ancillary services.

The Fortis Group employs ~24,000 people (including Agilus Diagnostics Limited) who share IHHs vision of becoming the Indias most trusted healthcare network. We draw strength and synergies from our partnership with our parent company IHH Healthcare to deliver world-class patient care and clinical excellence.

i. The Year Gone By

Coming out of the shadows of pandemic, as we ushered in FY 23, the healthcare industry was poised for significant growth opportunities. Our organisation was proactive in adapting to this changed business landscape and continued its focus on delivering strategic priorities and growth plans.

We strengthened our prime medical programs in key facilities across India with addition of several eminent clinicians in Cardiac Sciences, Oncology, Neurosciences, Gastroenterology and Orthopedics. With technology rapidly changing the clinical landscape of the country, we too continued to invest in high end medical infrastructure to support our clinical teams in delivering cutting edge care. Some of the key medical equipment that we installed during the year included LINAC, PET CT, Gamma Knife, Da Vinci Surgical Robot, Cath Labs, Neuro-Navigation Systems and Ortho Robot. Together these initiatives resulted in all our focus specialties delivering very healthy revenue growth compared to the previous year.

During the year, we accelerated our focus on network growth and expansion. Our brownfield expansion plans were on track, resulting in addition of 140 beds across our key facilities including FMRI, BG Road, Mulund, Mohali, Ludhiana and Nagarbhavi. As part of our inorganic growth strategy, we signed definitive agreements with the VPS Group for the acquisition of Medeor Hospital in Manesar, Gurugram, Haryana that will add 350 beds to our network. This is in line with our stated strategy to expand presence in our focus geographic clusters, including Delhi NCR. We further expanded our network with the launch of a 200-bedded multi-specialty hospital in Greater Noida (NCR) in O&M association in Oct22. We also inaugurated a state-of-the-art, Cancer Daycare Centre, at Defence Colony, New Delhi. This centre is equipped with a 12-bedded chemotherapy facility.

Continuing our efforts towards enhancing operational efficiencies, we made significant progress in our journey towards in-housing of key medical services including OP Pharmacy. At 25 units, OP Pharmacies are now being managed in-house, that has positively impacted our bottom line. In line with our strategy towards building a high-performance organisation, we worked towards developing high performing teams by enhancing people capabilities and competencies. In our endeavor towards building and nurturing talent, we launched leadership development programs for different categories of employees. ii. Business Strategy

As we enter into FY 24, we expect our growth momentum to continue with our focus on both topline growth as well as improving margins. We will continue to strengthen our existing specialties and nurture new medical programs.

Key Medical Specialities: We expect our focus specialties – Oncology, Cardiac Sciences, Neurosciences, Gastroenterology, Orthopedics, Renal Sciences – to drive significant chunk of growth through addition of state-of-the-art medical infrastructure and onboarding of new clinical teams.

Network Strategy:

1) Brownfield Expansion: In line with our network expansion strategy, we plan to pursue both organic growth through brownfield expansion as well as inorganic growth. In FY 24, we plan to add approximately 200 beds as part of our brownfield expansion, with significant capacity addition planned at our larger facilities including Mulund, Anandpur, BG Road and Mohali. In addition, we expect to commission our second facility in Ludhiana with 50 beds. We will continue work on our other major brownfield expansion plans in key facilities including FMRI, Noida, Shalimar Bagh, Faridabad and FHKI that are currently in different project stages. Brownfield expansion plans for FY 24 onwards would see a cumulative bed addition of ~1,400 beds in Phase I and potentially another 600 beds in Phase II over the next few years. These expected bed additions would enhance our current operational bed capacity to approximately 6,000 beds, an addition of 50% from current levels.

2) Inorganic Growth: In addition to the brownfield expansion plans, we would actively evaluate and participate in inorganic growth opportunities. The current industry environment offers attractive consolidation opportunities for enhancing size and scale. Our emphasis would be to look at deepening our presence in our key geographic clusters - NCR, Mumbai, Bengaluru and Kolkata.

3) Portfolio Rationalization: A key component of our strategy would be our portfolio rationalisation initiatives which would enable us to judiciously re-allocate capital and augment managements focus on larger facilities in our key geographic clusters. Our ongoing efforts to optimize the current portfolio would also include a thorough review of select under-performing facilities and the plan related to those; with the objective of enhancing the overall operating performance and margins of the business.

Electronic Medical Records (EMR): In our endeavour towards becoming a digital-first organisation, we are excited about our journey to roll out a comprehensive EMR solution that is expected to transform the way we capture and store patient records as well as will bring enhanced efficiencies, safety and quality in clinical care. Going forward, the integration of EMR with myFortis – our patient lifecycle management platform – would enable us to deliver hyper personalised experience to our patients.

As we commit ourselves towards patient-centric care, building trust and transparency with patients will be a key theme for FY 24. In our efforts to be more transparent, we plan to start reporting and monitoring clinical outcomes for select additional major procedure in the ongoing year. This will be in addition to publishing clinical outcomes for five key procedures for our major units on our website. We plan to strengthen our frontline employee training program to focus on patient empathy. We also aim to launch assured price packages for key procedures starting with NCR units in FY 24. To bring in more transparency and standardisation in the billing process across our units, we plan to implement Systematised Nomenclature of Medicine Clinical Terms (SNOMED CT) to match the global standards in disease classification and uniformity in procedure nomenclature and pricing.

We plan to continue our focus towards building efficient processes for enhancing patient experience. We have developed a custom solution for real-time monitoring and streamlining our discharge process to lower the turnaround time. We expect to start the deployment of the solution in the ongoing year.

iii. Digital Transformation

The healthcare sector is revolutionising the service delivery through technology and Fortis is committed to ensuring that our technology infrastructure and digital platforms are adequately equipped to deliver better experiences and outcomes for both our patients and clinical teams. During FY 23, we made significant progress in our digital transformation journey, with revenues from digital channels growing by ~35% YoY to reach Rs. 1,183 Crores. The appointment bookings through our mobile app grew by ~65% in FY 23 compared to previous year to reach 2.29L.

During the year, we considerably expanded the capabilities of myFortis – our digital platform for customer lifecycle management. Key functionalities that were added in FY 23 include availability of diagnostics reports, customised notifications, and health tips, major UI/UX changes such as biometric login/OTP read capability, etc. For FY 24, additional features are being planned to further enhance the capabilities of the mobile app and agent portal of the myFortis platform. These include booking modality services, streamlined payment and refund processes, etc. This is an iterative process, and we will continue to make enhancements as per the user feedback and requirements.

We embarked on a journey to launch an all-new Fortis website to make it more user friendly, ease the patient navigation journey and integrate seamlessly with Fortis digital assets.

The organisation continued its journey of transition from existing Oracle ERP to cloud based Oracle Fusion for Finance, HR, and Supply Chain Management functions. After successfully completing first phase of the project during the previous year, we are progressing steadily towards implementation of remaining modules that is scheduled to get completed during FY 24.

We continued to build our Business Intelligence platform that will enable effective business analytics. We rolled out new modules this year in the areas of Finance and SCM. We expect to complete the build-out of the system and launch multiple modules related to HR, Medical Operations and Marketing in FY 24. Through our continuous and significant investments in digital initiatives, Fortis aims to build a comprehensive technology platform that will ensure effective and efficient healthcare delivery.

iv. Medical Strategy and Operations Group (MSOG)

Over the year, the threat and transmission of COVID-19 pandemic receded gradually. Demand for routine healthcare services increased with patients coming back to hospitals for acute and chronic ailments. Hospitals were reorganised to manage these services which got postponed due to the COVID-19 crisis.

Fortis continues to drive its core value of patient centricity in all aspects of healthcare service delivery. We strive to pursue the highest standards in patient care while aiming to achieve the best experience and outcome for each patient and their family. As one of the leading, accredited, private healthcare chains in India, our systems-based approach demands continuous monitoring and evaluation of healthcare services, thereby enabling greater transparency and clinical success.

1) Clinical Governance

Our clinicians guide the organisation on medical matters. The Fortis Clinical Governance framework enables Senior Clinicians to come together, collaborate, share global best practices, and thereby pursue Evidence Based Medicine.

The Fortis Medical Council (FMC)

As the apex medical body at Fortis, the FMC comprises of senior, eminent clinicians; the MD & CEO; Senior Management officials and provides guidance to the executive on medical matters. The FMC has been an active group providing invaluable insights and recommendations on improving quality and patient safety initiatives.

Specialty Councils

Under the clinical governance framework, the specialty councils form an important pillar to realise the full potential of vast clinical expertise at Fortis. Specialty Councils are forums where our highly respected clinicians come together and interact with each other. As domain experts, members of specialty council share globally recognised, evidence-based practices towards formulating Fortis protocols. Specialty councils have been established for following 16 key specialties:

Fortis Specialty Councils

Cardiac Surgery

Cardiology Critical Care Medicine Emergency Medicine Gastroenterology
Cardiac Surgery Cardiology Critical Care Medicine Emergency Medicine Gastroenterology
GI Surgery Oncology Renal Sciences Neurology Neurosurgery
Endocrinology Paediatrics Pulmonology Orthopaedics Robot Assisted Surgery Radiology

2) Pursuit of Clinical Excellence

Quality and Patient Safety At Fortis, patient safety continues to remain the cornerstone of high-quality health care. While quality would "conform our services to requirements", patient safety practices lead to "prevention of harm".

Patient Safety indicators can assess the performance of healthcare services while representing opportunities for improvement in the delivery of

care. Fortis has been tracking Quality and Patient safety indicators across its network hospitals since 2013 through centrally designed Clinical Excellence Scorecard (CESC). The indicators have been chosen based on the following criteria of: Importance Scientific acceptability Feasibility Usability Minimal overlap with other quality indicators

Antimicrobial Stewardship (AMS)

Antimicrobial Stewardship (AMS) is the effort to measure and improve how antibiotics are prescribed by clinicians and used by patients. Improving antibiotic prescription and their use is critical to effectively treat infections, protect patients from antibiotic misuse, and in combating antibiotic resistance.

Fortis is running a coordinated AMS program to address the increasing challenge of anti-microbial resistance. Key initiatives include: Antibiograms (an overall profile of antimicrobial susceptibility) are prepared for each hospital and shared with clinicians for their reference, encouraging them towards rational use of anti-microbials.

Annual review of Unit antibiotic policy. Monitor and evaluate use of restricted antibiotics.

Ensure justification for use of restricted antibiotics.

Compliance with surgical prophylaxis ensuring appropriate choice of antibiotics and adherence to timing/ type/ dose.

Drug Resistance Index (DRI)

The DRI is a single, composite measure or index, reflecting the relationship between antimicrobial resistance trend and antimicrobial usage practice. As a monitoring tool, the Drug Resistance Index (DRI) can assess the effectiveness of the Antimicrobial Stewardship (AMS) program. For the past 8 years, Fortis has been calculating its own Drug Resistance Index, using it as a monitoring and analysis tool for antimicrobial usage in Fortis hospitals.

3) Clinical Outcomes

These are the globally agreed upon, evidence based measurable changes in health, function or quality of life that result from patient care. At Fortis, clinical outcomes are reported and monitored to promote transparency and informed decision making for patients.

In India, Fortis has been a pioneer and at the fore front of this global initiative. We were among the first private healthcare service delivery chains to measure and report outcomes for various clinical procedures.

As part of the steering committee at International Consortium for Health Outcomes Monitoring (ICHOM) for designing the Coronary Artery Disease (CAD) Standard Set, Fortis has been instrumental in promoting evidence-based medicine. We are the first healthcare chain in India to publish its ICHOM

CAD outcomes data on its website.

At present, Fortis reports and monitors clinical outcomes for 10 procedures, namely: Coronary Artery Disease [Coronary Artery Bypass Graft (CABG), Percutaneous Coronary Interventions (PCI)], Organ Transplants (Kidney; Liver), Total Knee Replacement (TKR), Endoscopic Retrograde Cholangio pancreatography (ERCP), Radiation Oncology, Obstetrics and Gynecology (Hysterectomy, Cesarean section), Laparoscopic Cholecystectomy.

Improved recording of Patient Reported Outcomes Measure (PROM) for Coronary Artery Disease patients, marks a major milestone that measures patient experience along with clinical outcomes.

URL: https://www.fortishealthcare.com/clinical-outcomes

Clinical Outcomes

Fortis 2022 Benchmark

Coronary Artery Bypass Graft (CABG)#

Use of left Internal Thoracic Artery graft 85.81% 74.20 % *
Need for Bail out Intra-Aortic Balloon Pump (IABP) 1.87% -
Perioperative Myocardial Infarction 0.37% 0.96 % **
Post procedure neurological stroke 0.33% 1.30 %
Need of Re-exploration surgery 1.91% 3.90 %
Deep sternal wound infection 0.20% 0.30 %
Predicted mortality 2.42% -
Mortality during same hospital admission 1.77% -

References:

STS Annual Report 2019 * Cleveland Clinic Outcomes Report 2014 **Rs.Texas Heart Institute 2014

# Includes clinical outcome from those Fortis hospitals whose data is published on FHL website; doesnt represent all Fortis hospitals across India

Clinical Outcomes

Fortis 2022 Benchmark

Percutaneous Transluminal Coronary Angioplasty (PTCA)#

Emergency CABG for failed procedure 0.04% 1.2 % *
Vascular complication at puncture site requiring intervention 0.05% 1.1 % *
Acute vessel occlusion requiring emergency re-intervention 0.12% -
Post procedure neurological stroke 0.04% 0.284 % **
Post procedure Renal failure requiring hemodialysis 0.35% -
Any Bleeding event requiring transfusion/intervention (within 72 hrs) 0.30% 4.0 % *
Delayed vascular complication at puncture site 0.01% -
Readmission with acute Myocardial Infarction within 30 days 0.08% -
Mortality during same hospital admission 1.98% 1.7 % *

References:

* US National Registry Data 2013 ** Cleveland Clinic Outcomes Report 2014

# Includes clinical outcome from those Fortis hospitals whose data is published on FHL website; doesnt represent all Fortis hospitals across India

4) Nursing

Nursing at Fortis has further augmented patient care processes, their compliances, care-related process outcomes and care-related communication. To enhance patient care, the Nursing Operation System, Version-2, was launched to bring in more accuracy and transparency. The 11 patient-centric processes were identified which have a high impact on patients. The key processes included pain management, supervised meals, patient identification, shift handovers, medication administration among others.

Another key nursing initiative has been "Spandan". It focuses on "what to say and what to do" for four high-impact patient care processes – Initial Assessment of the new admission, Peripheral Venous Cannulation, Medication Administration and Documentation, Fall Prevention Education to Patient and family.

5) Electronic Medical Records (EMR)

An EMR is an electronic record of health-related information of an individual that can be created, gathered, managed, and consulted by authorised clinicians and care provider staff within a healthcare organisation. EMR contains digitalised patient information such as demographics, medical history, medications, allergies, lab results, imaging and other diagnostic test reports, procedure notes, doctors and nurses progress notes, diagnosis (in standard codes like ICD), treatment histories and discharge summaries. Further, it includes features to increase efficiency and improve the quality of care.

Fortis has embarked on its new journey on digitalisation of medical records. Efforts are underway to design effective and efficient workflows so that integration with software applications is seamless. The objective is to make the system user-friendly for its Clinicians, Nurses and all others, eliminating the need for paper records while making day-to-day operations more efficient.

6) Medical Technology and Infrastructure

Globally, the medical technology landscape is evolving rapidly. Increasingly, technology is playing a strategic role in health care service delivery towards enhanced health outcomes. Innovative and effective use of medical technology could be vital in saving lives while making healthcare more accessible and affordable.

Over the year, Fortis continued to invest significantly in upgrading its hospital infrastructure and medical technology. Hospitals have been equipped with state-of-the-art equipment to augment our medical programs while providing the highest standards in patient care. The new state-of-the-art equipment includes Soft Tissue Robot, Gamma Knife, LINAC, MRI and CT.

7) Accreditations

Fortis

JCI NABH NABH NABH Blood NABH NABL Ethics

Accreditations

SHCO Entry Level Centre Nursing Committee
4 20 2 4 9 18 18 15

B. Agilus Diagnostics Limited ["Agilus"] (Fortiss diagnostics business subsidiary) i. Business Performance

For the financial year 2022-23, Agilus reported revenues of Rs. 1,347 Crores compared to Rs. 1,605 Crores reported during the Financial Year 2021-22. The overall revenues had declined compared to FY 22 due to huge Covid revenue in FY 22. The COVID revenue as a % of total revenue has declined from 28% in FY 22 to only 4% in FY 23. The non-covid business has grown from Rs. 1,152 Crores in FY 22 to Rs. 1,289 Crores in FY 23, a 12% growth. The Company EBITDA for the year stood at Rs. 263 Crores, representing a margin of 19% compared to a margin of 27% reported during the previous financial year.

The business served a total of over 16.6 Million patients during the year, compared to 21.4 Million during FY 22. Through these patients (Accessions), it undertook 39 Million tests during the year compared to 44 Million tests performed in FY 22. In an endeavor to go closer to the customer and provide services at their doorstep, Agilus has increased its total number of touchpoints to more than 3700. B2C:B2B mix is at 54:46 in FY23 vs. 55:45 in FY22.

The business continued to have a well-diversified geographical mix with no over-dependence on any region, allowing it to capitalise on the pan-India network optimally. Regional FY 23 revenue contributions were 33% from the North, 23% from the West, 28% from the South, 14% from East and Central India, and 2% from International. Agiluss preventive portfolio also went up by 29% in FY 23 compared to previous financial year.

ii. Training and Development

In the last few years, Agilus has progressed to bring many tailor-made competency enhancement programs for a different set of employees. Agiluss training curriculum includes robust Technical, Skills and specialized Behavioural training programs.

The Companys induction training program ‘Nneev was conducted twice during the year. Continued leveraging the e-learning platforms like:

MedGurukul where Agilus doctors conducted various learning interventions to share their expertise amongst the diverse specialties at Agilus and

Tech Talk for Technologists for Agilus Technical team members (Technologists) where technologists presented the topic of their expertise under the guidance of respective Lab Heads Trained front desk staff on creating ABHA IDs (Ayushman Bharat Health Account) for patients thereby strengthening Govt. of Indias efforts to extend the benefits of the Ayushman Bharat initiative to all citizens Strengths Based Leadership Development Program for Agiluss identified high-potential employees (HiPOs)

iii. Retail Network Expansion

The opportunity to increase sales and generate demand is appealing when acquiring new customers and exploring untapped markets. Agilus has established its presence across 1000+ cities, 30 states, and union territories as of March 31st 2023, with a PAN India network and equal distribution of centers. Over the past year, Agilus has expanded its reach by adding over 1100+ customer touchpoints and including 1700+ direct clients. As of FY23, Agiluss network comprises 410 +labs, 3700+ customer touchpoints, and 12000+ direct clients..

iv. International Business

Agiluss International Division carries a rich history of over 2 decades and during this period the company has witnessed different market situations across geographies. Agiluss international network consists of collection centers and direct clients spread across the SAARC region, Sub-Saharan Africa, Southeast Asia, CIS, Gulf and the Middle East.

Agilus has completed new client acquisitions in Asia and Africa and have also finalised a new lab set up in Kazakhstan. A central hub for logistics in Maldives was a key initiative taken to overcome logistics challenges and inclusion of oncology and genetics tests under Aasandha, a govt. health insurance company has helped in growing the business. Agilus has also started Digital pathology services in Maldives by installing a Grundium scanner at Indira Gandhi Hospital, a Govt hospital. During FY 22-23, the company continued with Its business in Maldives, Sri Lanka, Nepal, Bangladesh, Ethiopia, Kenya, Uganda, Nigeria, Ghana, Oman, Mauritius, Kazakhstan, and Uzbekistan.

v. Brand Initiatives

The industry is undergoing swift consumerisation and Agilus is committed to remain future ready with multiple new initiatives that enhance its customer experience. This year, Agilus significantly improved its network presence by adding new laboratories and patient touch points apart from strengthening the test offering.

Diagnostic Solutions:

This year, the Company launched niche specialised tests like Tuberculosis Whole Genome Sequencing, Chromosomal Microarray, Complete Care Geno – Wellness, Dual Marker (FMF) By TRF Method, Fatty Liver Index, Myasthenia Gravis Panel, Heart Assure (High Sensitive Troponin - I), Monsoon Fever Panel With Leptospira, Endometrial Receptivity Gene Expression, Kidney Stone Analysis (X-Ray Method) and H3n2 Test

Agilus has also launched its e-dos (Directory of Service) which is easily accessible from their website. With a Google like search, the e-dos is designed as per international standards, complete with LOINC codes, and serve as a one-stop solution for any test-related query. The Company believes that the customers will greatly benefit from this

Preventive Healthcare Packages:

Along with expanding its home collection services and offering a superior omnichannel customer experience, Agilus has also introduced a new line of preventive healthcare packages that are intended to satisfy customers needs for wellness and preventive care

The Company has launched 14 new packages with new age tests like cardiac - high sensitive troponin I and Fatty Liver Index, keeping in mind the prevalence of non-communicable diseases in urban and semi-urban India Enhanced Communication: To remain updated with the latest in diagnostic science, Agilus communicates frequently with its key stakeholders, the doctors. Accordingly, the company organises Continuous Medical Education sessions (CMEs), round table meetings and scientific conferences throughout the year.

Health Campaigns: Agilus believes in educating consumers on good health and wellbeing and the company conduct health awareness campaigns throughout the year.

The company also held webinar sessions on World Cancer Day, CML (Chronic Myeloid Leukemia) Day, Breast Cancer Awareness Month, and Ovarian Awareness Month

Customer Experience: One of the Companys constant endeavors is to offer a superior customer experience in terms of maintaining aesthetic and comfortable patient touch points, seamless booking of services through its website and mobile app and providing reliable test reports.

Agiluss WhatsApp chatbot delivers more than 10,000 reports each day, SMART reports that provide detailed insights including diet and lifestyle interventions, and live tracking of phlebotomist feature that reduces the anxiety of customers awaiting sample collection are a few examples of enriching patient experience

The Company is constantly upgrading the UI/ UX of the Agilus website & mobile App to improve the user experience and customer adaptability of the digital medium

Consumer Loyalty Program: Club Agilus is the consumer loyalty program of Agilus Diagnostics and allows its customers to earn discounts on their subsequent test orders. The company believes this will help build customer loyalty.

Awards and Recognition: This year, Agilus won more than 10 Industry awards for Outstanding Pathology Services, Excellence in High-End Diagnostics, Excellence in Home Healthcare Services, and Customer Experience. Agiluss brand PR efforts led to building its share of voice across financial, mainline, regional, online, and trade media publications.

vi. Information Technology

In the Year 2022-23, Agilus has initiated and implemented a large number of IT integrations with aggregators as well as Integrated Lab systems with New Lab Analysers to improve efficiency within a lab.

Major technology upgradation was made in the current year to enhance the capability to service its CC-Portal Applications used by Collection centers and Patient Service Centres. The Company has also undertaken upgradation in CLIMS application to meet customer needs and Information Security. Agilus has continued to prioritise data security and privacy by implementing various measures to safeguard sensitive patient data. This has involved the implementation of robust security protocols and the use of advanced encryption technologies.

vii. Research and Development

This year in addition to launching whole genome sequencing for tuberculosis, Agilus launched several new genomic tests in the area of reproductive genetics, oncology, and hereditary and rare disorders.

Continuing with the company transformative efforts in the field of Genomics, several state-of-the-art technologies were implemented, notably the Golden Helix software for exome and NGS panel reporting. Agilus also installed S5 NGS PLUS and Sanger Sequencing 24 capillary with a better turnaround time.

Agiluss R&D team undertakes clinical research studies, co–marketing projects, contract validations, and collaborations. Under clinical research and co–marketing studies, the company has assessed the feasibility of 22 studies and 8 studies have been awarded to Agilus. Agilus is progressing well on contract validations and collaborations for publications.

viii. Academic and Scientific Achievements

Agilus offers a fellowship program to doctors that imparts applied knowledge of molecular pathology in cancers, genetic disorders, and infectious diseases.

Under this program, two pathologists passed the Fellowship Course in Molecular Pathology offered by Agilus under the aegis of Maharashtra University of Health Sciences in 2021.

Agilus Institutional Ethics Committee (EC) is registered with the National Ethics Committee Registry for Biomedical and Health Research (NECRBHR), DHR, MoHFW, Government of India since 2020. Also, the company has applied for membership in INSACOG and registering its R&D division for the Contract Assessment of IVD Kits under CDSCO. Agilus Inclusion in the INSACOG has been approved by Department of Bio technology and final process for acceptance of terms and conditions has been initiated.

In FY 2022-23, Agilus also issued scientific publications that include medical case report journals and other regular communiques to doctors. The companys doctors also published scientific research papers in peer reviewed journals.

ix. Quality & Compliance

Agilus Quality team plays a pivotal role in ensuring the implementation of all good laboratory practices, ISO 15189 standards, accreditation guidelines, and local regulatory requirements across its labs and SCFs. In FY 2022-23, the team worked towards the continuation of all current accreditation status – NABL ISO 15189: 2012, CAP - College of American pathologists and NABH (1 Radiology centers) as per their cycle of assessment. In FY 2022-23, the company added two new labs to the NABL list - Agilus Bhubaneswar and Agilus Jaipur Franchisee. NABL M(EL)T recognition was achieved for the first time for 3 Labs at Agilus Dankuni, Goa, and Agilus Mulund. Two of the companys national labs are affiliated with NTEP/RNTCP - National Tuberculosis Elimination Program/Revised National Tuberculosis Control Programme. Achieved RNTCP Affiliation for TB Drug Resistance Testing by LPA Method for 1st and 2nd Line drugs for your companys lab at AGILUS Limited Goregaon.

The new version of ISO 15189:2022 standard has been released by the International Organization of Standardization which is being adopted by NABL from 1st July 2023 (with a window period of three years), Agilus has made a phase-wise plan to implement compliance as per the new standard at PAN India level including review and updating of QMS documents, Training programs on the new standard and finally the gradual transition of NABL accreditation as per new ISO 15189:2022 standard.

C. Financial and Operational Performance of the Company – Consolidated Performance, Hospitals and Diagnostics business

Fortis financial performance continue to witness growth momentum during Fiscal 2022-23. With the abatement of Covid-19 during the fiscal, the business witnessed strong traction in the hospital business driven by higher occupancy and better surgical mix, however, the diagnostic business witnessed significant decline in covid volumes thereby impacting the overall performance of diagnostic business for the financial year 2022-23 as against financial year 2021-22.

For the financial year 2022-2023, 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, 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. The significant decline in diagnostic business revenue was due to decline in Covid volumes and associated revenues. 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.

Revenue

FY 22 FY 23 % Change

(Rs. Crores)

Total Consolidated Income* 5,745 6,360 10.7%
Revenues from operations 5,718 6,298 10.1%
Hospital Business** 4,264 5,107 19.8%
Diagnostic Business (Gross) 1,605 1,347 (16.0%)
Diagnostic Business (Net) 1,453 1,190 (18.1%)

(*Total consolidated income is net of inter-co elimination and includes other income of Rs. 61.9 Crores in FY 23 and Rs. 27.3 Crores in FY 22); (**Hospital Business includes P&L of international entities also) 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% in FY 23 versus 19.2% reported in FY 22. Hospital business EBITDA for FY 23 was at Rs. 900 Crores (excluding the dividend income of Rs. 21.9 Crores) compared to Rs. 672 Crores reported for FY 22. EBITDA margin of the hospital business stood at 17.6% in FY 23 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% (basis gross revenue) compared to 26.5% for the year FY 22.

EBITDA

FY 22 FY 23 % Change

(Rs. Crores)

Group EBITDA 1,096 1,163 6.1%
EBITDA Margin 19.2% 18.5%
Hospital Business** 672 900 33.9%
EBITDA Margin 15.8% 17.6%
Diagnostic Business 425 263 (38.3%)
EBITDA Margin (basis gross revenue) 26.5% 19.5%

(**Hospital Business includes P&L of international entities also)

Consolidated Profit after tax for FY 23 stood at Rs. 633 Crores compared to Rs. 790 Crores reported in the previous financial year. PAT includes an exceptional gain of Rs. 73.6 Crores in FY 23 and Rs. 315 Crores in FY 22. Exceptional gain in FY 23 pertains to reversal of impairment in an associate Company while exceptional gain in FY 22 was majorly 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 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.)

With respect to the balance sheet, the Company maintained a comfortable liquidity position with net debt of Rs. 330 Crores as on March 31, 2023 versus Rs. 549 Crores as of 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. Net Debt to EBITDA stood at 0.29x for the FY 23 compared to 0.60x for FY 22 (basis Q4 annualised EBITDA of FY 23 and FY 22, respectively).

Key Performance Indicators (Hospitals)

FY 22 FY 23 Key Performance Indicators (Diagnostics) FY 22 FY 23
Occupancy 63.4% 67.1% Lab med revenue contribution 95.4% 95.6%

Average revenue per occupied bed (Rs. Crores)

1.80 2.01 No of Accessions (in Million) 21.4 16.6
Average length of stay (days) 3.73 3.73 Average real. per accession (Rs.) 746 808
OPD Footfalls (in Million) 2.71 2.83 Tests performed (in Million) 44.2 39.1
IPD Discharges (in Million) 0.27 0.29 Average real. per test (Rs.) 361 344

D. Human Resources

Year 22-23 saw accelerated and far-reaching effects on the working-class segment in terms of - an increased affinity towards holistic health and wellbeing, a massive shift in the adoption of digital technology and a heightened consciousness towards sustainable & socially equitable demands.

Having identified Oracle Fusion as ERP for support functions of Finance, SCM and HR, we have joined the implementation agenda with ‘Reimagine HR as our core theme this year. Our process design principles revolve around building a HR value chain that allows us to navigate challenges with enhanced speed and agility.

Debate that technology can edge out personal interface especially in HR, continues to find traction. To ensure that we effectively safeguard ourselves from this probability, we have built a Fortis Promise to enhance empathy quotient of our teams not only for dealing with patients and care givers, but for dealing & conducting ourselves in all situations. "Servicing with Heart" program is our signature intervention initiated across various patient facing roles / teams and scenarios which delves into key behavioural anchors needed to deliver The Fortis Service Promise of ‘Care for Good.

Continuing to move towards a more employee centric approach to performance management that focuses on feedback & development as key drivers of employee performance, we had moved away from bell curve based forced ranking methodology in FY 22. This year, we established a competency framework for executive category employees, which in turn has been integrated with performance management system in to balance our focus between ‘what and ‘how aspect of achievement quotient.

Shortfall in skilled front line talent has been a challenge for our industry. With National Apprentices Promotion Scheme (NAPS) coming into action, we have taken the opportunity to collaborate with the ecosystem around NAPS stakeholders and have initiated apprentice engagement in 7 hospitals under some leading jobs. This allows us to skill-train frontline talent and standardise role expectations as well.

Health & wellness agenda for employees was designed as a long-term strategy with Mental health being the first pillar considered for frontline leaders with launch of exclusive help line in collaboration with Mental Health team under Dr. Samir Parikh across Fortis markets. The initiative also entailed conduct of 94 skill building workshops covering 1700 employees. Enhancement in mental wellbeing quotient was reported across our Frontline Leaders.

New Business Support Initiatives

Our growth agenda saw us support commissioning/ expansion of:

Oncology day care centre as an extension of FMRI,

Gurgaon in Defence colony Delhi

O&M hospital in Greater Noida

In-house OP Pharmacy network

Lean Six Sigma capability building to drive

Operational Efficiencies

Testimony of acceptance and effectiveness for above initiatives is well established through the facts that – a. We improved our engagement scores to 90% from 88% last year and participation rate to 94% from 91%. Employee net promoter score took a big leap from 8 to 21, with all units and employee groups showing good improvement with no negative indictor for eNPS. We use ESOMAR standards compliant (Data protection & privacy), internationally acclaimed third-party platform for this survey. b. Overall Annualised Attrition improved by 1.5% in absolute terms, majorly owing to 5% improvement for Nursing category.

E. Internal Control Systems and their Adequacy

At Fortis Healthcare Limited, the internal control system has been designed to correspond to the size and complexity of the operations and the incremental changes made. All aspects are continuously monitored by the management to provide reasonable assurance that the objectives and prescribed benchmarks are met. We have a robust system for checking the effectiveness and efficiency of the operations, as well as the reliability of financial reporting and compliance with applicable laws and regulations. It is overseen at several layers including where required by the Committees of the Board.. The internal control framework is supplemented with an internal audit program that provides an independent view of the efficacy and effectiveness of the process and control environment and through its observations provides an input to the management to support continuous improvement program. The internal audit program is managed by an Internal Audit function directly reporting to the Audit Committee of the Board.

FORWARD LOOKING STATEMENT

Except for the historical information contained herein, statements in this discussion which contain words or phrases such as ‘will, ‘would, ‘indicating, ‘expected to etc., and similar expressions or variations of such expressions may constitute ‘forward-looking statements. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, our ability to successfully implement our strategy, future business plans, our growth and expansion in business, the impact of any acquisitions, our financial capabilities, technological implementation and changes, the actual growth in demand for our products and services, cash flow projections, our exposure to market risks as well as other general risks applicable to the business or industry. The Company undertakes no obligation to update forward looking statements to reflect events or circumstances after the date thereof. These discussions and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.

References

Investment Opportunities in Indias Healthcare Sector, NITI Aayog

IBEF report on Healthcare Sector, February 2023

Prabhudas Lilladher Equity Research report

IRDA Annual Reports

Market Research, Equity and Other Reports, Web Articles, Press & Media Reports and Others

World Bank Data