Fortis Malar Director Discussions


Dear Members,

Your Directors have pleasure in presenting their 32nd Annual Report of Fortis Malar Hospitals Limited ("the Company") along with Audited Standalone and Consolidated Financial Statements and Auditors Report thereon for the Year ended March 31, 2023.

FINANCIAL RESULTS

The highlights of Consolidated Financial Performance of your Company are as follows:

( in Lakhs)

Particulars Consolidated
Year ended March 31, 2023 Year ended March 31, 2022
Revenue from Operations 8,595.08 8,617.82
Other Income 663.81 739.05
Total Income 9,258.89 9,356.87
Total Expenses 8,137.96 8,274.03
Profit before Finance Charges, Taxes, Depreciation & Amortisation (EBITDA) 1,120.93 1,082.84
Less: Finance Charges, Depreciation & Amortisation 1,821.72 1,908.97
Profit / (Loss) before tax (700.79) (826.13)
Less: Tax Expenses 847.32 1.22
Profit / (Loss) for the year (1,548.11) (827.35)
Other Comprehensive Income(Net of Taxes) (47.80) (33.96)
Total Comprehensive Loss for the year (1,595.91) (861.31)

The highlights of Standalone Financial Performance of your Company are as follows:

( in Lakhs)

Particulars Standalone
Year ended March 31, 2023 Year ended March 31, 2022
Revenue from Operations 8,595.08 8,617.82
Other Income 655.78 733.32
Total Income 9,250.86 9,351.14
Total Expenses 8,136.89 8,272.72
Profit before Finance Charges, Taxes, Depreciation & Amortisation (EBITDA) 1,113.97 1,078.42
Less: Finance Charges, Depreciation & Amortisation 1,821.72 1,908.97
Profit / (Loss) before tax (707.75) (830.55)
Less: Tax Expenses 845.57 -
Profit / (Loss) for the year (1,553.32) (830.55)
Other Comprehensive Income (Net of Taxes) (47.94) (34.03)
Total Comprehensive Loss for the year (1,601.26) (864.58)

STATE OF COMPANYS AFFAIR, OPERATING RESULTS AND PROFITS

Fortis Malar Hospitals Limited was acquired by Fortis Group in early 2008. The hospital founded in 1989, has established itself as one of the largest corporate hospitals in Chennai, providing quality super specialty and multi-speciality healthcare services. With a total bed-strength of 160, including 40 ICU/CCU/RTU beds, the hospital focuses on providing comprehensive medical care in the areas of Cardiology and Cardiac Surgery, Neuro Surgery, Gynaecology, Orthopedics, Gastroenterology, Neurology, Pediatrics, Diabetics, Nephrology and Internal Medicine.

Fortis Malar Hospitals Limited has a state of the art Cath Lab and multiple dedicated cardiac operation theatres and intensive coronary care units. Several rare and complex Adult and Pediatric, Cardiac surgeries, Orthopedic and Joint replacements, Neurosurgeries and Plastic reconstruction surgeries have been performed at this hospital. The hospitals Obstetrics and Gynaecology services are among the busiest in the city, successfully performing many complicated deliveries and surgeries. They are supported by a dedicated Neonatology unit. Your Company achieved a consolidated total income of 92.59 Crores during the current year as against 93.57 Crores in the corresponding financial year ended March 31, 2022. EBITDA for the year stood at 11.21 Crores compared to 10.83 Crores for the previous corresponding year. The Profit / (Loss) before tax for the period stood at (7.01) Crores as against (8.26) Crores during the corresponding year. Profit/ (Loss) for the year stood at (15.48) Crores in the current financial year compared to (8.27) Crores in the previous year. Regarding the key performance indicators, the Companys average revenue per occupied bed (ARPOB) for the current year stood at 165 Lakhs as against 163 Lakhs in the previous year. The average length of stay (ALOS) was at 3.85 days in FY 2022-23 compared to 4.29 days in FY 2021-22. Occupancy of the hospital during the year was at 38% as compared to 39% in the previous year.

SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW OPEN OFFER

Pursuant to execution of Share Subscription Agreement dated July 13, 2018 ("SSA"), Northern TK Venture Pte Limited ("NTK" or the "Acquirer"), a wholly owned subsidiary of IHH Berhard, subscribed to 235,294,117 new equity shares of Fortis Healthcare Limited ("FHL") with a face value of 10 each ("Subscription Shares"), constituting approximately 31.1% of the total voting equity share capital of FHL on a fully diluted basis ("Expanded Voting Share Capital") for a total consideration of 4,000 Crores and FHL issued and allotted Subscription Shares by way of preferential allotment in accordance with the terms of SSA ("Subscription"). As a consequence of Subscription, the Acquirer together with IHH Healthcare Berhad ("IHH") and Parkway Pantai Limited ("PPL"), collectively made a mandatory open offer, by filing a public announcement dated July 13, 2018 to carry out the following: (i) A mandatory open offer for acquisition of up to 197,025,660 equity shares of face value of 10 each in FHL, representing additional 26% the Expanded Voting Share Capital of FHL, at a price of not less than 170 per share ("Fortis Open Offer") or such higher price as required under the Securities and Exchange Board of India ("SEBI") (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SEBI (SAST) Regulations"); and (ii) In light of the acquisition of the controlling stake of FHL, a mandatory open offer for acquisition of up to 4,894,308 fully paid up equity shares of face value of 10 each in Fortis Malar Hospitals Limited ("Malar"), representing 26% of the paid-up equity shares of Malar at a price of 60.10 per share ("Malar Open Offer"). Malar Open Offer is subject to the completion of the Fortis 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, FHL and directed its Registry to register a contempt petition regarding alleged violation of the Status Quo Order ("Contempt Petition"). Petitions before the Honble Supreme Court including Contempt Petition have been disposed of vide judgement dated September 22, 2022 ("Judgement"). No finding of contempt has been made against FHL or its independent directors. Based on legal advice, FHL is of the clear view that the Status Quo Order dated 14th December 2018 no longer exists. IHH/ NTK is simultaneously seeking legal counsel for pursuing and securing the Open Offer. _ In the Judgement, Honble Supreme Court has passed certain directions, inter-alia, that the Honble 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. The stated position of FHL is that these transactions were done in compliance with applicable laws, post requisite corporate and regulatory approvals and necessary disclosures/ announcements. Currently, it is vehemently opposing the application filed by Daiichi before the High court for appointment of forensic auditor.

DIVIDEND AND TRANSFER TO RESERVES

Considering the losses occurred during the financial year, the Board of Directors of your Company has not recommended any dividend for the FY 2022-23. Accordingly, there has been no transfer to General Reserves.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of FY 2022-23 and date of this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Management has the overall responsibility to design, implement and monitor an effective control environment that is aligned to the operating environment and inherent business risks. The internal control system has been designed to commensurate with the nature of business, size and complexity of operations and is monitored by the management to provide reasonable assurance on the achievement of objectives, effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations.

An entity level control framework sets the control philosophy and principles which guide the organisation policy and operating processes. Your Company has institutionalised a robust process and internal control system to commensurate with its size and operations. The organisational hierarchy, role, responsibility, authority and accountability structures have been defined to provide an enabling environment for business functions and units to operate as per the designed control environment. Review and oversight procedures are designed to monitor effective adherence to design.

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 & Risk Management Committee of the Board.

The scope and authority of the Internal Audit Function is derived from the Audit Charter approved by the Board. The Internal

Audit function develops an internal audit plan to assess control design and operating effectiveness, as per the risk assessment methodology.

The Internal Audit function provides assurance to the Board and management that a system of internal control is designed and deployed to manage key business risks and is operating effectively. For the identified observations, management provides an action plan to address the process and control deficiencies noted in the internal audit reviews and action plans are monitored for compliance by the Internal Audit Function under the supervision and guidance of the Audit and Risk Management Committee.

DETAILS OF SUBSIDIARY

During the year under review, your Company has only one subsidiary Company i.e. Malar Stars Medicare Limited. Main object of the said wholly-owned subsidiary company includes setting up, managing / administering hospital(s) and to provide Medicare and Healthcare services.

The Board of Directors has adopted a policy for determining "material subsidiary" pursuant to Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said policy is available at https://www. fortismalar.com/investor-relations/investorcatdetails/policies-other-documents1 Basis the Consolidated Audited Financial Statements of the Company for FY 2022-23, your Company has no "material subsidiary" in terms of the said policy and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY

The Consolidated financial statements of your Company and its subsidiary, prepared in accordance with applicable Indian Accounting Standards as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013, forms part of the Annual Report. In terms of Section 136 of the Companies Act, 2013, financial statements of the subsidiary company will be provided to any shareholder of the Company who asks for it and said financial statements will also be kept open for inspection and are also available on the website of the Company. The performance of the Company and financial position along with contribution of the subsidiary to the overall performance of your Company which also included in the Consolidated Financial Statements of the Company is enclosed herewith as

" Annexure 1" in the Prescribed format (form AOC - 1)

LOANS / ADVANCES / INVESTMENTS / GUARANTEES

Particulars of loans / advances / investments / guarantees given and outstanding during FY 2022-23 are mentioned in notes to financial statements.

PUBLIC DEPOSITS

During the 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.

AUDITORS

1. STATUTORY AUDITORS

M/s B S R & Co. LLP, Chartered Accountants (Registration No. 101248W/W-100022), were appointed as Statutory Auditors of your Company for a period of five years to conduct statutory audit of the Company for the Financial Years commencing from April 01, 2019 to March 31, 2024. The said appointment was approved by the shareholders at their 28th Annual General Meeting, accordingly they hold the office of statutory auditor from 28th Annual General Meeting until the conclusion of 33rd Annual General Meeting to be held in year 2024.

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark. However, Emphasis of matter is drawn to Note 45 to the standalone financial statements which describes the litigation and issues pertaining to regularisation of the hospital building in which the Company operates today, and the related matters. A letter was received from Chennai Metropolitan Development Authority (CMDA) on August 25, 2020, wherein certain clearances and certificates were sought within 30 days in connection with the regularisation. The Company is taking steps to complete the process of submission of the sought clearances and certificates, which involves taking a number of actions and significant expenses and capital expenditure. While the Company is co-operating to get all the clearances, it has been legally advised that, as per the agreement between the Company and Fortis Health Management Limited ("FHML"), it is not required to bear any expenses, revenue or capital nature, incurred towards regularisation of building and obtaining the requisite clearances and certificates (or for the expenses that may need to be incurred in the unlikely event that the regularisation is not approved) as all such expenses will be borne by FHML. The Company also continues to believe that all Orders / Notices issued by CMDA prima facie would not result in any significant adverse impact on its operations/ financial statements or on the going concern status.

2. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the relevant rules made thereunder or any amendments thereof, the Company is required to maintain cost records and accordingly such accounts and records are made and maintained by the Company in respect of its hospital activity and the same is also required to be audited. Your Board had, upon the recommendation of the Audit and Risk Management Committee, appointed M/s Jitender, Navneet & Co., Cost Accountants to audit the cost accounts of the Company for FY 2022-23 at a remuneration up to 75,000 (Rupees Seventy Five Thousand) plus taxes and out-of-pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the cost auditor 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 Notice convening ensuing Annual General Meeting.

3. SECRETARIAL AUDITORS

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 has appointed M/s Mukesh Agarwal & Co., Practicing Company Secretary to undertake the Secretarial Audit of the Company. It is hereby confirmed that the Company has complied with the provisions of SS-1 i.e. Secretarial Standard on meetings of Board of Directors and SS-2 i.e. Secretarial Standard on General Meetings. The Report of the Secretarial Auditor for the FY 2022-23 does not contain any qualification, reservation or adverse remark and it is annexed herewith as "Annexure II".

4. INTERNAL AUDITORS

Upon the recommendation of the Audit and Risk Management Committee, the Board of Directors had appointed Mr. Rajiv Puri, Head Risk and Internal Audit of the Holding Company, as the Chief Internal Auditor of the Company and authorised him to engage independent firms for conducting the internal audit.

For FY 2022-23, Internal Audit(s) were performed in accordance with the Internal Audit plan approved by the Audit and Risk Management 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 2022-23, there was no significant material order passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

CHANGE IN THE NATURE OF BUSINESS

During FY 2022-23, there was no change in the nature of the business of the Company.

STOCK OPTIONS AND CAPITAL STRUCTURE

The Company has issued ESOP Scheme pursuant to the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter-alia, administers and monitors the ESOP Scheme of the Company in accordance with the applicable SEBI Guidelines. As per the Scheme, each option when exercised would have been converted into one fully paid up equity share of 10 each of the Company. During the year under review, no option was granted by the Company.

Further during the year under review, all the options which remained un-exercised were lapsed. Hence, as on March 31, 2023 Company does not have any outstanding stock options. 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.fortismalar.com/ investorrelations/investorcatdetails/annual-reports1 The certificate from the Secretarial Auditors of the Company stating that the Schemes have been implemented in accordance with the SEBI Guidelines would be placed at the Annual General Meeting for inspection by members. The details pertaining to shares in suspense account are specified in the report of Corporate Governance forming part of the Board ‘Report. The Company has not made any provision of money for purchase of, or subscription for, its own shares or of its holding Company.

During the FY 2022-23, there was no change in capital structure of the Company.

ANNUAL RETURN

The Annual Return of the Company in Form MGT- 7 in accordance with Section 92(3) of the Companies Act, 2013 is available on the website of the Company at Investor Relations

- Fortis Malar. https://www.fortismalar.com/investor-relations/ investorcatdetails/annual-return1

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

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, Technology Absorption and Foreign Exchange is given in "Annexure III", forming part of this Boards Report.

CORPORATE SOCIAL RESPONSIBILITY –JOURNEY THROUGH THE YEAR

During the Financial Year under review, your Company did not have any obligation to make CSR contribution, hence, no initiatives have been taken during the year.

The policy as approved by the Board is available on the Companys web site at https://www.fortismalar.com/investor-relations/investorcatdetails/policies-other-documents1.

The details of particulars pursuant to Section 134(3)(o) of the Companies, Act, 2013 read with rule 9 of the Companies (CSR) Rules, 2014 is given in ‘Annexure - IV, forming part of this report.

DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of your Company as on date of this report comprises Six (6) directors, of which one (1) is a Whole- time Director (Executive Director), three (3) are Independent Directors and rest of the two (2) directors are Non-Executive & Non-Independent Directors. Pursuant to Sections 152 of the Companies Act, 2013 and the Articles of Association of the Company, Dr. Nithya Ramamurthy, Director, is liable to retire by rotation at the 32nd Annual General Meeting and has offered herself for re-appointment. On the recommendation from Nomination and Remuneration Committee, the Board has recommended her re-appointment as a director liable to retire by rotation. As required under Regulation 36 of SEBI LODR and Secretarial Standard -2 information or details of Dr. Nithya Ramamurthy are provided in the Notice convening the 32nd Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI (Listing Agreement and Disclosure Requirements) Regulations, 2015. Further, no director of the Company was disqualified to become/continue as Director of the Company, in terms of the provisions of the Companies Act, 2013 and the rules made thereunder.

There is no inter-se relationship between the Board Members.

As on the date of the report, Mr. Chandrasekar Ramasamy, Whole-time Director, Mr. Yogendra Kumar Kabra, Chief Financial Officer and Mr. Sandeep Singh, Company Secretary & Compliance Officer are the Key Managerial Personnel of the Company.

During FY 2022-23, Six meetings were held by the Board of Directors. Details of board / committee meetings and the attendance of Directors are provided in the Corporate Governance Report forming part of the Annual Report.

Disclosures regarding the following are also mentioned in report on Corporate Governance:

1. Composition of committee(s) of the Board of Directors 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 Whole-time 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 and Remuneration Committee and the Board have laid down the manner in which the annual evaluation of the performance of the Board, its Committee and Individual Directors, is required to be made.

The following process of evaluation was approved by the Nomination and Remuneration Committee ("NRC") 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, working of Board Committees etc.
4. Final recording and reporting Based on the findings of the assessment, CHRO circulates a report to the Board members for further discussion and action planning. Based on the above, a final report on Board Evaluation FY 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 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 FY 2022-23

(Amount in )

Name of the Director Remuneration of Director Median Remuneration of employees Ratio
Mr. Chandrasekar Ramasamy 4,095,116 398,558 10.3:1

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

Name of Director / KMP Designation % increase in Remuneration
Mr. Chandrasekar Ramasamy Whole Time Director 0%
Mr. Yogendra Kumar Kabra Chief Financial Officer NA
Mr. Sandeep Singh Company Secretary & Compliance Officer NA

c) The percentage increase in the median remuneration of employees in FY 2022-23 is 15.2% (9% in the last year). d) The number of permanent employees on the rolls of Company is 417 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 FY 2022-23
(A) Average percentile increases already made in the salaries of employees other than the managerial personnel 26.1%
(B) Percentile increases in the managerial remuneration 0%
Comparison of (A) and (B) 26.1%
Justification The average percentile increase is on a higher side mainly due to (i) union employee settlement effected from April 1, 2022 (once in 3 years); and (ii) market correction effected for nurses
Any exceptional circumstances for increase in the managerial remuneration NA

f) Salary details along with the variable component and other benefits of the remuneration being paid to directors are detailed below:

(Amount in )

Name of the Director* Salary, Allowances & Perquisites Performance Incentives Retiral Benefits

Service Contract (As Whole Time Director)

Tenure Notice Period
Mr. Chandrasekar Ramasamy 3,851,828 243,288 21,600 3 years w.e.f. January 11, 2022 3 Months

* None of the other Directors was paid any remuneration, except sitting fees and the fees paid for services rendered in the professional capacity.

g) Remuneration has been paid to Directors and KMPs as per Board Governance Document / the Remuneration Policy of the Company: REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination

& Remuneration Committee framed a remuneration policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director etc. and the same is also available on the website of the Company at the link https:// www.fortismalar.com/investorrelations/investorcatdetails/ nomination-and-remuneration-committee1

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 the Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Board 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 were placed before the Audit and Risk Management Committee for approval as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Prior omnibus approval of the Audit and Risk Management Committee was obtained for the transactions which were of foreseeable and repetitive nature. The transactions entered into pursuant to such omnibus approval so granted are audited and a statement giving details of all related party transactions was placed before the Audit and Risk Management Committee on a quarterly basis.

The Company has developed a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website and the same is available at the link: https://www.fortismalar. com/investorrelations/investorcatdetails/policies-other-documents1

None of the Directors has any pecuniary relationship or transaction vis-?-vis the Company, except to the extent of sitting fees and the fees paid for services rendered in the professional capacity and remuneration approved by the Board of Directors and as disclosed in this Annual Report.

RISK MANAGEMENT FRAMEWORK

The Company has designed a risk management framework for risk identification, assessment, mitigation plan development and monitoring of action to mitigate the risks. 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 framework promotes risk ownership, accountability, self-assessment and continuous improvement to minimise adverse impact on achievement of business objectives and enhance the Companys competitive advantage. 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. We have not received any complaint during the year under review relating to sexual harassment hence there was no complaint pending as on March 31, 2023. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The same may also be read in terms of Companies (Accounts) Rules, 2014.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

CODE OF CONDUCT

Declaration by Mr. Chandrasekar Ramasamy, Whole-time Director, confirming compliance with the ‘Code of Conduct is enclosed with Corporate Governance Report.

REPORT ON CORPORATE GOVERNANCE

"Report on Corporate Governance" forming part of this Annual Report.

Certificate of M/s. Mukesh Agarwal & Co., Company Secretary in Whole-time Practice, regarding compliance with the Corporate Governance requirements as stipulated in Clause E, Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed with the Corporate Governance Report.

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 for the year ended March 31, 2023, the applicable accounting standards has been followed along with proper explanation relating to material departures, therefrom, if any; b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for financial year ended March 31, 2023 and of the loss of the Company for the said period; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were 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 co- operation, patronage and trust reposed in the Company. Your Directors also greatly appreciate the commitment and dedication of all the employees at all levels, that has contributed to the growth and success of the Company. Your Directors also thank all the strategic partners, business associates, Banks, and our shareholders for their assistance, co-operation and encouragement to the Company during the year.

By the Order of the Board For

Fortis Malar Hospitals Limited

Date: May 19, 2023 Daljit Singh
Place: Gurugram Chairman
DIN : 00135414

ANNEXURE I

FORM NO. AOC – 1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of the Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries or associate companies or joint ventures

PART A: SUBSIDIARIES

( in Lakhs)

S. No. Particulars Year ended March 31, 2023
1 Name of the subsidiary MALAR STARS MEDICARE LIMITED
2 The date since when subsidiary was acquired N.A.
3 Reporting period for the subsidiary concerned, if different from the holding companys reporting period Reporting period same as Holding Company
4 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. N.A.
5 Share Capital 5.00
6 Reserves & Surplus 221.50
7 Total Assets 235.87
8 Total Liabilities 9.37
9 Investments Nil
10 Turnover 8.28
11 Profit before Taxation 6.96
12 Provision for Taxation 1.75
13 Profit after Taxation 5.21
14 Proposed Dividend None
15 Extent of Shareholding (in percentage) 100%

Notes:

1. Name of subsidiaries which are yet to commence operation – None

2. Name of subsidiaries which have been liquidated or sold during the year – None

PART B: ASSOCIATES AND JOINT VENTURES

As on March 31, 2023, the Company does not have any associate Company and / or Joint Venture.

For and on behalf of the Board of Directors of Fortis Malar Hospitals Limited

Dr. Nithya Ramamurthy Chandrasekar R.
Director Whole Time Director
DIN 00255343 DIN 09414564
Yogendra Kumar Kabra Sandeep Singh
Chief Financial Officer Company Secretary & Compliance Officer
Membership No. F9877