healthcare global enterprises ltd Directors report

Dear Members,

Your Directors are pleased to present the Twenty Fifth Annual Report of your Company together with the audited standalone and consolidated financial statements and the auditors report thereon for the financial year ended March 31, 2023.

1. Financial Highlights:

The highlights of standalone and consolidated financial results of your Company and its subsidiaries are as follows:

(INR in million)

Consolidated	2022-23	2021-22
Income from operations including income from Govt. Grants	16,944.47	13,977.83
Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items	13,957.58	11,598.14
Profit including income from Govt. Grant and before other income, depreciation, interest cost, tax and exceptional items	2,986.89	2,379.69
Other income	131.84	126.67
Depreciation, Finance Charges and Exceptional items	2,669.75	1614.39
Share of (loss) of equity accounted investees	-0.18	-14.25
Profit before tax	448.80	877.72
Profit after tax attributable to the owners of the Company	293.49	537.33
Standalone
Income from operations including income from Govt. Grants	10,075.94	8,519.61
Total Expenditure excluding Depreciation, interest cost, tax and exceptional items	8,253.11	7,029.61
Profit including income from Govt. Grants and before other income, depreciation, interest cost, tax and exceptional items	1,822.83	1,490.00
Other income	87.98	102.85
Depreciation, Finance Charges and exceptional items	1,334.60	782.44
Profit before tax	576.21	810.41
Profit after tax	401.91	382.53

2. Performance Overview:

The standalone and consolidated financial statements for the financial year ended March 31, 2023, forming part of this Annual Report, have been prepared in compliance with applicable provisions of the Companies Act, 2013 (‘the Act"), Indian Accounting Standards ("Ind-AS") and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

Consolidated Operations:

The consolidated income from operations including income from government grant for FY 2022-23 was INR 16,944.47 million as compared to INR 13,977.83 million in the previous fiscal year, reflecting an increase of 2,967.17 million with year-on-year increase of 21.23%. EBITDA in FY 2022-23 was INR 2,986.89 million as compared to INR 2,379.69 million in FY 2021-22, reflecting year-on-year increase of INR 607.2 million. EBITDA margin for the year was 17.63% as compared to 17.02% in FY 2021-22, reflecting an increase of 0.61% year-on-year. Profit after tax in the current fiscal year was INR 293.49 million as compared to INR 537.33 million in FY 2021-22. PAT for the year 2021-22 was mainly on account of exceptional gain amounting to INR 946.1 million.

Standalone Operations:

The standalone income from operations including government grants for FY 2022-23 was INR 10,075.94 million as compared to INR 8,519.61 million for the previous financial year, reflecting an increase of 18.27%. Our EBITDA before exceptional items for FY 2022-23 was INR 1,822.83 million with EBITDA margin of 18.09% as against INR 1,490.0 million for FY 2021-22 with EBITDA margin of 17.5%.

For more information, please refer to the Financial and Operating Highlights in Management Discussion and Analysis Report.

3. Business and Strategy:

3.1 Business:

The Company is a provider of speciality healthcare focused on cancer and fertility. Under the "HCG" brand, we operate the largest cancer care network in India in terms of the total number of private cancer treatment centres licensed by the AERB (Government of India, Atomic Energy Regulatory Board).

In our HCG network, our specialist physicians adopt a technology-focused approach to diagnosis and treatment. For instance, we use advanced technologies, including molecular pathology and molecular imaging for accurate diagnosis and staging of cancer, which enable us to decide upon the appropriate course of treatment for each patient. We also utilise targeted nuclear medicine therapies as well as advanced radiation treatments to minimise side effects and improve the outcome of treatments. By ensuring that we adopt these diagnostic and treatment technologies throughout our HCG network, we are able to provide consistent quality of care to all patients.

Given the large number of patient cases treated across our HCG network, we believe that we are able to efficiently utilise our equipment, technologies and human resources, thereby deriving economies of scale. We believe that our business model is scalable and when combined with efficient utilisation of resources, it enables us to operate within a competitive cost structure.

As a group, we continue to deliver the highest standards of clinical outcomes across all our centres. Our standardised clinical protocols for diagnosis and treatment of cancer patients have allowed us to manage the large volume of patient cases across our HCG network with successful clinical outcomes. Mapping our own clinical outcomes and constantly evolving HCG treatment guidelines has paved way for standardization of clinical pathways and improvement in the functioning of the clinical departments. We believe that we are able to attract and retain highly skilled specialist physicians due to our reputation for clinical excellence, our technology-focused approach, the exposure and experience we provide in relation to clinical best practices and the training programmes we offer for their ongoing development. We believe that the abilities and expertise of our team of specialist physicians differentiate us relative to our competitors.

We also provide fertility treatment under our "Milann" brand. Our Milann fertility centres provide comprehensive reproductive medicine services, including assisted reproduction, gynaecological endoscopy and fertility preservation; and follow a multidisciplinary and technology-focused approach to diagnosis and treatment. Our Milann network also operates on a model similar to our HCG network, wherein the various Milann fertility centres aim to provide medical services following established protocols with a focus on quality medical care across diagnosis and treatment.

As of March 31, 2023, our HCG network consisted of 22 comprehensive cancer centres (including Kenya), and 4 multispecialty hospitals across India. HCGs comprehensive cancer centres provide expertise and advanced technologies for the effective diagnosis and treatment of cancer under one roof. Under the "Milann" brand, HCG operates 7 fertility centres. The details of our existing comprehensive cancer centres as on the date of this report and their facilities and service offerings, including those under development forms part of the Management Discussion and Analysis Report.

3.2 Strategy: Our strategy, includes, inter alia:

a) Expand the reach of our cancer care network in India:

We plan to expand our network in India by establishing cancer centres across India and by expanding the capacity and service offering of the existing HCG cancer centres. We carry out a competitive assessment of the markets in which HCG plans to expand the network, based on a number of factors, including the estimated incidence of cancer in the primary and secondary catchment population, the number of comprehensive cancer centres, if any, in the catchment; the average distance patients have to travel to avail of such comprehensive cancer care; affordability of healthcare generally and cancer care in particular; and the available third party payer options, whether corporate, government or private insurance. HCG will continue to expand its network through partnership arrangements and acquisitions; and that the past experiences will aid the management in identifying potential opportunities in the future and assist HCG in integrating new cancer centres into the existing HCG network. We believe that our planned network will cater to the increasing unmet demand for cancer care in India.

b) Strengthen our HCG brand to reach more cancer patients:

We believe that our HCG brand distinguishes us from our competitors; and one of the areas of focus is building our brand, enhancing our market presence, brand image and visibility. We intend to strengthen our patient support groups comprising cancer survivors to further spread awareness of cancer screening and to educate patients regarding cancer treatment options and their relative outcomes and benefits. Through these initiatives, we seek to further strengthen our brand and our commitment to the community, cancer patients and their families.

c) Technology adoption and strengthening our information technology infrastructure:

HCG has been at the forefront of the fight against cancer. An area of such intensity requires innovative treatments and methods, and the introduction of industry-changing technologies, for the overall benefit of both the medical expert and the patient. Cancer research is an area that requires more serious work and HCG aims to rise up to that challenge. In all its years of working in this field, HCG has led the march against cancer and set benchmarks in the industry, by introducing many new technologies, highly useful in increasing the accuracy and saving time. Cancer care is an important area in health care, and we aim to lead with our strong framework and technology infrastructure.

With regard to our information technology infrastructure, in order to enhance the quality of care delivered to patients and to further enhance our clinical best practices and research capabilities, we continuously focus on upgrading and strengthening the information technology infrastructure. Our information technology infrastructure is based on a private cloud-computing system and encompasses a centralised EMR system seamlessly integrated with various other centralised systems including HIS and ERP system. We believe that this would maximise efficiencies through the greater integration of our network, help us fine tune protocols through knowledge sharing and collaboration, enhance our ability to conduct longitudinal research studies (which are long-term observational research studies), associate clinical outcomes with mutation and other genomic findings in cancer patient tissues maintained at our biorepository. We further believe that this will position us as a partner of choice for cancer researchers and academia.

4. Management Discussion and Analysis Report:

In terms of Regulation 34 of Listing Regulations, the Management Discussion and Analysis Report (MD&A) on the Companys financial and operational performance, industry trends, business outlook and Initiatives and other material changes with respect to the Company and its subsidiaries, wherever applicable, are presented in separate section which forms part of the Annual Report. The MD&A Report provides a consolidated perspective of economic, social and environmental aspects material to its strategy and its ability to create and sustain value to your Companys key stakeholders.

5. Transfer to Reserves and Surplus/Retained Earnings:

The movements in reserves and surplus/retained earnings are available in the Statement of Changes in Equity, which forms part of the financial statements.

6. Dividend:

The Company continues to look at growth prospects through new investment opportunities. Considering that consolidation is taking place in the healthcare industry in India, it presents us with more challenges in terms of growth and it is imperative that the Company looks at available options for organic as well as in-organic growth. Achieving a consistent sustainable growth over the next few years and consolidating Companys position competitively would be a key objective.

Keeping in view the growth strategy of the Company, the Board of Directors of your Company ("Board") have decided to plough back the profits and thus do not recommend any dividend for the financial year under review.

In terms of Regulation 43A of the Listing Regulations, the Company has adopted Dividend Distribution Policy setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of Dividend to the Shareholders and/or retaining profits earned by the Company. The said policy is hosted on the website of the Company at https://www.hcgoncology.com/policies-and-guidelines/.

7. Transfer of unpaid and unclaimed amount to IEPF:

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, dividend and refund of share application money due for refund which remains unpaid or unclaimed for a period of seven years from the date of its transfer to unpaid dividend/ unclaimed account is required to be transferred by the Company to Investor Education and Protection Fund (IEPF), established by the Central Government under the provisions of Section 125 of the Companies Act, 2013. During the year, no amount was due for transfer to IEPF.

8. Consolidated financial statements:

In accordance with the Companies Act, 2013 and the Companies (Indian Accounting Standards) Rules, 2015, the Company has been following the Indian Accounting Standards (Ind AS) for preparation of its financial statements from April 1, 2016.

9. Subsidiaries and Associates:

As on March 31, 2023, the Subsidiaries, Associates and Joint Venture Companies of the Company are as under:

Sl. No.	Name of the entity	Country of Incorporation	Primary business activity for which it was formed	% of ownership held by the Company as at March 31, 2023
1	HCG Medi-Surge Hospitals Private Limited	India	Cancer Care	74.00%
2	Malnad Hospital & Institute of Oncology Private Limited	India	Cancer Care	70.25%
3	HealthCare Global Senthil Multi Specialty Hospitals Private Limited	India	Cancer Care	100.00%
4	Niruja Product Development and Healthcare Research Private Limited	India	Research and Development	100.00%
5	BACC Health Care Private Limited	India	Fertility	100.00%
6	Suchirayu Health Care Solutions Limited	India	Multi Speciality	78.60%
7	HealthCare Diwan Chand Imaging LLP	India	Radiology/ Imaging	75.00%
8	HCG Oncology Hospitals LLP (formerly known as APEX HCG Oncology Hospitals LLP)	India	Cancer Care	100.00 %
9	HCG NCHRI Oncology LLP	India	Cancer Care	87.14%
10	HCG Oncology LLP	India	Cancer Care	74.00%
11	HCG EKO Oncology LLP	India	Cancer Care	50.50%
12	HCG Manavata Oncology LLP	India	Cancer Care	51.00%
13	HCG SUN Hospitals LLP	India	Health Care Services (Multi- Specialty)	100.00%
14	HCG (Mauritius) Pvt. Ltd. (along with the shareholding of Niruja Product Development and Healthcare Research Private Limited)	Mauritius	Health Care Services	100.00%
15	Healthcare Global (Africa) Pvt. Ltd.	Mauritius	Health Care Services	100.00%
16	HealthCare Global (Uganda) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Uganda	Cancer care	100.00%
17	HealthCare Global (Kenya) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Kenya	Cancer care	100.00%
18	HealthCare Global (Tanzania) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Tanzania	Cancer care	100.00%
19	Cancer Care Kenya Limited (Subsidiary of HealthCare Global (Kenya) Private Limited)	Kenya	Cancer care	81.63%
20	Advanced Molecular Imaging Limited (HealthCare Global (Kenya) Private Limited holds 50% of the share capital)	Kenya	Production of Fluro Deoxi Glucose (FDG)	50.00%

As on March 31, 2023, none of the companies other than HCG Medi-Surge Hospitals Private Limited is a Material Subsidiary, within the meaning of Material Subsidiary as defined under the Listing Regulations, as amended from time to time. The Company has also formulated a policy for determining material subsidiaries. The said policy is also available on the website of the Company at: https://www. hcgoncology.com/policies-and-guidelines/.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of the Companys subsidiaries and associates in Form AOC-1, that forms part of this Report is attached as Annexure 4. Pursuant to Section 129 of the Companies Act, 2013, the consolidated financial statements of the Company, prepared in accordance with the relevant accounting standards specified under Section 133 of the Companies Act, 2013 read with the Rules made thereunder, forms part of this Annual Report.

Further, pursuant to the provisions of Section 136 (1) of the Companies Act, 2013:

a) The Annual Report of the Company, containing therein its standalone and consolidated financial statements, is placed on the website of the Company, i.e., https:// hcgoncology.com/annual-reports/.

b) The audited financial statements of subsidiary companies together with related information and other reports of each of the subsidiary companies would be placed on the website of the Company https://www. hcgoncology.com/annual-reports/.

10. Acquisitions, Divestments, Investments

The Company, in October 2022, has acquired 11.14% from Nagpur Cancer Hospital and Research Institute Private Limited (NCHRI) and Dr. Ajay Mehta, minority partners of HCG NCHRI Oncology LLP ("LLP") increasing the Companys stake in the LLP to 87.14% In this regard, the Company has executed an Amendment Agreement with NCHRI and Dr. Ajay Mehta.

There were no other entities that became subsidiaries, associates during the Financial Year.

11. Public deposits:

Your Company has not accepted any deposits from public in terms of Section 73 and 74 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014; and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

12. Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013:

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of Listing Regulations, disclosure on particulars relating to Loans/advances given, guarantees provided and investments made are provided as part of standalone financial statements of the Company.

13. Related party transactions:

In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a policy on related party transactions. This policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties.

All related party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for related party transactions on yearly basis for transactions which are of repetitive nature and entered in the ordinary course of business. All related party transactions entered during the year were in the ordinary course of business and at arms length basis. No material related party transactions were entered into by your Company during the year.

A statement giving details of all related party transactions, entered pursuant to the omnibus approval so granted, is placed before the Audit Committee for their review, on a quarterly basis. The policy on related party transactions has been hosted on the Companys website https://www. hcgoncology.com/policiesandguidelines/ in terms of the Listing Regulations relating to Corporate Governance.

Disclosures as required under Section 134(3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in Form AOC 2 which is annexed herewith as Annexure 5 and forms part of the report.

Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed the reports on related party transactions with the Stock Exchanges.

14. Disclosure under Foreign Exchange Management (Non- Debt Instrument) Rules, 2019 ("NDI Rules"):

The Company has made preferential allotment of 2,95,16,260 equity shares and 1,85,60,663 warrants (convertible to equal number of equity shares) of the Company at INR 130 per equity share, aggregating to INR 625 Crore, to Aceso Company Pte. Ltd., Singapore ("Aceso"). Pursuant to the preferential allotment of shares to Aceso, and further acquisition of shares of the Company by Aceso through open offer, the Company has become a foreign owned and controlled company under Foreign Exchange Management (Non- Debt Instrument) Rules, 2019 ("NDI Rules") and other applicable laws, on September 08, 2020. The Company has complied with the provisions relating to the same during the financial year, except to the extent provided under Sl. No. 37 (observations made by the Secretarial Auditor) of the Report.

15. Share Capital as on March 31, 2023:

15.1 Authorized Share Capital: As on the date of this report, the authorized share capital of the Company is INR 200,00,00,000 consisting of 20,00,00,000 equity shares of INR 10 each.

15.2 Issued, Subscribed and Paid-up Share Capital

The Issued, Subscribed and Paid-up Share Capital of the Company has increased form INR 139,01,19,920 consisting of 13,90,11,992 equity shares of INR 10 each on March 31, 2022 to INR 139,11,60,620 consisting of 13,91,16,062 equity shares of INR 10 each on account of the following allotments of securities made by the Board of Directors of the Company during the year.

The Board of Directors of the Company has allotted 4,000 equity shares on May 26, 2022, 64,770 equity shares on August 10, 2022, 12,175 equity shares on November 10, 2022 and 23,125 equity shares on February 09, 2023, upon exercise of ESOPs by the employees as per HCG ESOS 2014 and HCG ESOS 2021.

Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

16. Declaration by Independent Directors:

The Company has received necessary declaration from each Independent Director, in accordance with Section 149(7) of the Companies Act, 2013, that he/she met the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and the Regulation 16(1) (B) of the Listing Regulations. The Company has received and taken on record, the necessary declaration from each of the independent directors under Section 149 of the Companies Act, 2013 that they meet with the criteria of their independence. In the opinion of the Board, Independent Directors fulfil the conditions specified in Companies Act, 2013 read with the Schedules and Rules made thereunder as well as in Listing Regulations and are independent from the management.

ForthepurposeofRule8(5)(iiia)oftheCompanies(Accounts) Rules, 2014, the Board of Directors are of the opinion that the independent directors possess requisite qualifications, experience, expertise and hold high standards of integrity. List of key skills, expertise and core competencies of the Board, including the Independent Directors is provided in the Corporate Governance Report, forming part of the Annual Report.

17. Annual Return:

The Annual Return of your Company as on March 31, 2023, in Form MGT- 7 as provided under sub-section (3) of Section

92 of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company at https://hcgoncology.com/ corporate/investor-relations/.

18. Board of Directors:

Composition of Board of Directors

Our Board comprises of directors with a broad range of skills, experience, backgrounds and perspectives. This mix of skills, knowledge and experience enriches the Board discussion and contributes towards a high performing and effective Board.

As on March 31, 2023, the composition of your Companys Board has an ideal combination of Executive, Non-Executive and Independent Directors and thereby ensuring separation of management and governance while maintaining its independence. In compliance with the terms of the Listing Regulations, Independent Directors constitute 50% of the Board strength including an independent women director.

Type of Directorship	No. of Directors	% of Board strength
Executive Directors	3	30%
Non-Executive Non-Independent Directors	2	20%
Independent Directors	5	50%
Total	10	100%

All 5 (five) Independent Directors are free from any business, pecuniary or other relationship that could materially influence their judgment and satisfy the criteria of independence as defined under the Companies Act, 2013 and Listing Regulations. The Company has 2 (two) woman Directors on the Board, one of whom is an Independent Non-Executive Director and one is a Whole-time Director. The profiles of these Directors forms part of the Annual Report.

18.1 Directors appointed during the financial year:

During the financial year, there were no new appointments to the Board. The appointments to the Board after March 31, 2023, till the date of the report are as under:

(a) Mrs. Anjali Ajaikumar Rossi, Whole-time Director, has been reappointed as Executive Director, effective from April 01, 2023, for a period up to: (a) June 30, 2026, or (b) termination of the employment of the ‘Executive Chairman in accordance with Article 14.6 of Part B of the Articles of Association of the Company, whichever is earlier.

(b) Dr. B. S. Ajaikumar, Executive Chairman, has been reappointed, effective from July 01, 2023, for a period up to June 30, 2025, or until the occurrence of the events set out under Article 14.6 of Part B of the Articles of Association of the Company, whichever is earlier.

(c) Mr. Rajiv Maliwal has been appointed as an Independent Non-Executive Director on May 25, 2023, for a period of 3 years.

The Company has received necessary approvals from the shareholders for the appointment of all the directors.

18.2 Directors resigned or ceased to be a director due to the completion of the tenure, during the financial year till date:

Mr. Abhay Havaldar, Independent Non-Executive Director, has resigned from the Board of the Company, with effect from April 02, 2023. Mr. Abhay Havaldar has informed the Company that, considering his primary activity as an investor, he is required to join several other boards which unfortunately limits his ability to do justice to what is required to be an effective Board member of HCG, and that there are no other material reasons for his resignation from the Board. He has served as a director on the Board from August 20, 2020.

Members of the Board placed on record their appreciation for the remarkable support and guidance provided by Mr. Abhay Havaldar during his tenure as Director, and for his active participation in all the decision making processes of the Board.

18.3 Retirement by rotation:

Mr. Amit Soni (DIN: 05111144), Non-Independent Non-Executive Director of the Company and Mr. Meghraj Arvindrao Gore, Whole-time Director & CEO (DIN: 07505123), are liable to retire by rotation at the ensuing Annual General Meeting ("AGM") pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and being eligible offers herself for reappointment.

Appropriate resolutions for their re-appointment are being placed for the approval of the shareholders of the Company at the ensuing AGM. A brief profile of Mr. Amit Soni and Mr. Meghraj Arvindrao Gore and other related information is detailed in the Notice convening the 25th AGM of your Company.

The Board considers the said re-appointments to be in the interest of the Company and hence recommends the same to the shareholders for approval.

19. Number of meetings of the Board:

The meetings of the Board are scheduled at regular intervals to decide and discuss on the business performance, policies, strategies and other matters of significance. The schedule of the meetings is circulated in advance to ensure proper planning and effective participation in meetings. In certain exigencies, decisions of the Board are also accorded through circulation.

The Board met 5 (five) times during the financial year 2022-23 viz., on May 26, 2022, August 10, 2022, November 10, 2022, February 09, 2023 and March 27, 2023. The maximum interval between any two meetings did not exceed 120 days.

Detailed information regarding the meetings of the Board and meetings of the Committees of the Board is included in the report on Corporate Governance which forms a part of the Boards Report.

20. Key Managerial personnel:

In accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following were the Key Managerial Personnel of the Company as on March 31, 2023.

a) Dr. B. S. Ajaikumar – Executive Chairman, b) Mr. Meghraj Arvindrao Gore – Whole-time Director and Chief Executive Officer, c) Mr. Srinivasa V Raghavan – Chief Financial Officer and d) Ms. Sunu Manuel – Company Secretary

21. Committees of the Board and their constitution:

During the financial year, the Board had the following six Committees. The Composition of the Committees of the Board along with relevant information pertaining to

Directors are detailed in the Corporate Governance Report which forms a part of this Report.

A. Audit Committee;

B. Nomination and Remuneration Committee; C. Stakeholders Relationship Committee; D. Corporate Social Responsibility Committee; E. Strategy Committee; and F. Risk Management Committee.

Keeping in view the requirements of the Companies Act, 2013 and Listing Regulations, as amended from time to time, the Board reviews the terms of reference of these Committees and the nomination of Board members to various Committees. The recommendations, if any, of these Committees are submitted to the Board for approval.

(A). Audit Committee

The Audit Committee of the Board reviews, acts on and reports to the Board with respect to various auditing and accounting matters. The scope and function of the Audit Committee is in accordance with Section 177 of the Companies Act, 2013, Regulation 18 of Listing Regulations, and have been detailed in the Corporate Governance Report, forming part of this Annual Report.

Audit Committee met 5 (five) times during the financial year 2022 -23. The meetings were held on May 25, 2022, July 11, 2022, August 09, 2022, November 09, 2022 and February 08, 2023. All recommendations made by the Audit Committee have been accepted by the Board of Directors.

The composition of the Audit Committee during FY 2022 – 23 and the attendance at the committee meetings are given in the below table.

Name	Position	Number of meetings attended
Ms. Geeta Mathur	Chairperson	5
Mr. Rajagopalan Raghavan	Member	4
Mr. Amit Soni	Member	5
Mr. Pradeep Kanakia	Member with effect from May 26, 2022	4

Notes:

Mr. Pradip Kanakia, Independent Director, was appointed as a member of the Audit Committee effective from May 26, 2022.

(B) Nomination and Remuneration Committee

The scope and function of the Nomination and Remuneration Committee is in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations.

Nomination and Remuneration Committee of the Board has met 5 (five) times during the financial year 2022-23. The meetings were held on May 26, 2022, August 10, 2022, November 10, 2022, February 09, 2023, and March 27, 2023.

The composition of the Nomination and Remuneration Committee and the attendance at the committee meetings during FY 2022-23 are given in the below table.

Name	Position	Number of meetings attended
Mr. Rajagopalan Raghavan	Chairperson	5
Mr. Siddharth Patel	Member	5
Dr. B. S. Ajaikumar	Member	5
Mr. Abhay Prabhakar Havaldar	Member	4
Ms. Geeta Mathur	Member	5
Mr. Jeyandran Venugopal	Member	4

Note:

(i) Mr. Abhay Havaldar, Independent Non-Executive Director has resigned from the Board of the Company with effect from April 02, 2023.

(ii) Mr. Pradip Kanakia, Independent Non-Executive Director has been appointed as a Member of the Nomination and Remuneration Committee with effect from May 16, 2023.

(C) Stakeholders Relationship Committee

This Committee is constituted in compliance with Section 178 of the Companies Act, 2013 and Listing Regulations as Stakeholders Relationship Committee.

Stakeholders Relationship Committee of the Board has met once during the financial year 2022-23. The meeting was held on March 29, 2023. The Chairman of the Committee, Mr. Amit Soni is a non-executive director.

The composition of the Stakeholders Relationship Committee and their attendance at the Committee meetings during FY 2022-23 are given in the below table.

Name	Position	Number of meetings attended
Mr. Amit Soni	Chairman	1
Dr. B. S. Ajaikumar	Member	1
Mr. Abhay Havaldar	Member	1

Note:

(i) Mr. Abhay Havaldar, Independent Non-Executive Director has resigned from the Board of the Company with effect from April 02, 2023.

(ii) Mr. Rajagopalan Raghavan, Independent Non-Executive Director has been appointed as Member of the Stakeholders Relationship Committee with effect from June 28, 2023.

(D). Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee was constituted by our Board of Directors at their meeting held on May 29, 2015. The terms of reference of the Corporate Social Responsibility Committee of our Company are as per Section 135 of the Companies Act, 2013 and the applicable rules thereunder.

The Committee did not meet during the financial year 2022-23, as there was no CSR spend for the financial year.

The composition of the Corporate Social Responsibility Committee is given in the below table:

Name	Position
Dr. B. S. Ajaikumar	Chairman
Mr. Siddharth Patel	Member
Mr. Jeyandran Venugopal	Member

(E) Strategy Committee

The Committee was constituted by our Board of Directors at their Meeting held on May 26, 2016 with the scope of reviewing strategic initiatives; and for having an oversight of the strategic direction of the Company.

The members of the Committee shall be nominated by the Board of Directors with a right to appoint, replace the members from time to time. The Company Secretary shall act as the Secretary of the Committee. CFO shall be an invitee to the Committee Meetings and would provide support to the Committee in terms of financial analysis and planning.

The Committee has met four times during the financial year 2022-23. The meetings were held on May 23, 2022, August 09, 2022, October 31, 2022 and February 01, 2023.

The members of the Committee and their attendance at the Committee meetings during FY 2022-23 are given in the below table:

Name	Position	Number of meetings attended
Dr. B. S. Ajaikumar	Chairman	4
Mr. Siddharth Patel	Member	4
Mr. Amit Soni	Member	4
Ms. Anjali Ajaikumar Rossi	Member	3

(F) Risk Management Committee

The Board of Directors of the Company has constituted Risk Management Committee on June 17, 2021, to assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of strategic, operational, and external environment risks. The Committee has overall responsibility for monitoring and approving the enterprise risk management framework and associated practices of the Company.

Prior to the formation of the Risk Management Committee, the Audit Committee of the Board was overseeing the Risk Management function of the enterprise as a whole, and was called as Audit and Risk Management Committee. With effect from June 17, 2021, the Audit and Risk Management Committee is known as Audit Committee.

The Committee has met two times during the financial year 2022-23. The meetings were held on August 24, 2022 and January 16, 2023.

The composition of the Risk Management Committee and the attendance at the committee meetings during FY 2022-23 are given in the below table:

Name	Position	Number of meetings attended
Dr. B. S. Ajaikumar	Chairman	2
Mrs. Geetha Mathur.	Member	2
Mr. Raj Gore	Member	2

Details of terms of reference of the Committees, attendance at meetings of the Committees are provided in the Corporate Governance report. The Company Secretary acts as the Secretary of all the Committees of the Board.

22. Board Evaluation:

In terms of the requirement of the Companies Act, 2013 and the Listing Regulations, an annual performance evaluation of the Board was undertaken. The Board evaluation framework has been designed in compliance with the requirements under the Companies Act, 2013, and the Listing Regulations, and in consonance with Guidance Note on Board Evaluation issued by SEBI in January 2019. The Board evaluation was conducted through questionnaire having qualitative parameters and feedback based on rating, where the Board has carried out annual evaluation of (i) its own performance; (ii) directors performance on an individual basis; (iii) Chairman of the Board; and (iv) performance of all committees of the board for the Financial Year 2022-23.

Evaluation of the Board was based on criteria such as composition and role of the Board, Board communication and relationships, functioning of Board committees, review of performance and compensation to Executive Directors, succession planning, strategic planning, Board culture, various aspects of the Boards functioning, execution and performance of specific duties, obligations and governance etc.

Evaluation of Directors was based on criteria such as participation and contribution in Board and committee meetings, representation of shareholder interest and enhancing shareholder value, experience and expertise to provide feedback and guidance to top management on business strategy, governance and risk, understanding of the organizations strategy, risk and environment, level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The process also covered separate evaluation of Chairperson of the Board, Executive Directors, Non- Executive Directors and Independent Directors.

Evaluation of committees were based on criteria such as adequate independence of each of the committees, frequency of meetings and time allocated for discussions at meetings, functioning of Board committees and effectiveness of its advice/recommendation to the Board, etc.

The Board had, during the year, opportunities to interact and make an assessment of its functioning as a collective body. In addition, there were opportunities for committees to interact, for Independent Directors to interact amongst themselves and for each Independent Director to interact with the Chairman. The Board found that, there was considerable value and richness in such discussions and deliberations.

The Board Evaluation discussion was focused around how to make the Board and its committees more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was appraised of the business issues and the related opportunities and risks. The Board discussed various aspects of the functioning of the Board and its committees such as structure, composition, meetings, functions and interaction with the management and what needs to be done to further improve the effectiveness of the Boards functioning.

Additionally, during the evaluation discussion, the Board also focused on the contribution being made by the Board as a whole, through its committees and discussions on a one on one basis with the Chairman.

The process of Board Evaluation was led by the Chairman of the Nomination and Remuneration Committee. The overall assessment of the Board was that it was functioning as a cohesive body including the committees of the Board that were functioning well with periodic reporting by the committees to the Board on the work done and progress made during the period. The Board acknowledged the efforts and contributions made by the Chairperson, Executive and Non- Executive Directors and Independent Directors towards the Companys performance.

The Board also noted that the actions identified in the past evaluation had been acted upon. Subsequent to the evaluation done in the financial year 2022-23, given the changing external environment, some areas have been identified for the Board to engage itself with and these will be acted upon.

The Directors expressed their satisfaction with the evaluation process. Further, the evaluation process confirms that the

Board and its committees continue to operate effectively and the performance of the Directors and the Chair is satisfactory.

23. Risk Management and Enterprise Risk Management Policy:

Pursuant to Regulation 21 of Listing Regulations, your Company has developed and rolled out a comprehensive Enterprise Risk Management Policy. The policy aims at elimination or reduction of risk exposures through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures. The Risk Management and Steering Committee (RMSC) reviews the Companys portfolio of risks and considers it against the Companys risk appetite and recommends changes to the Risk Management technique and / or associated frameworks, processes and practices of the Company. The enterprise risk management process of the Company is progressing satisfactorily, but the entire process is yet to reach a level of maturity. RMSC also advises and guides the Company for making the process more robust and to achieve prudent balance between risk and reward in both ongoing and new business activities. The Risk Management Committee periodically reviews the risk management process.

For further details on the enterprise wide risk management framework, refer to Management and Discussion Analysis Report forming part of the Annual Report.

24. Companys Policy on Appointment and Remuneration of Directors:

The Nomination and Remuneration Committee has framed a policy for Board Diversity, which lays down the criteria for appointment of Directors on the Board of your Company and guides organizations approach to Board Diversity.

Your Company believes that Board diversity, basis the gender, race, age will help build diversity of thought and will set the tone at the top. A mix of individuals representing different industry experience, qualification and skill set will bring in different perspectives and help the organization grow. The Board of Directors is responsible for review of the policy from time to time. The policy on Board Diversity has been placed on the Companys website at https://www. hcgoncology.com/policiesandguidelines/.

25. Compliance Management Framework:

For monitoring compliances to applicable laws, your Company has instituted an online compliance management system within the organization to monitor compliances and provide update to the senior management and Board on a periodic basis. The Audit Committee and the Board periodically monitor status of compliances with applicable laws.

26. Corporate Social Responsibility:

Your Company has been taking initiatives under Corporate Social Responsibility (CSR) for society at large, well before it has been prescribed thorough the Companies Act, 2013; and over the years, had been pursuing as a part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself and create an environment of partnership for inclusive development.

As per the provisions of Section 135 of the Companies Act, 2013, the Company has well defined policy on CSR which covers the activities as prescribed under Schedule VII of the Companies Act 2013. The CSR Policy is available on the website of the Company at https://www.hcgoncology.com/ policies-and-guidelines/.

The composition of CSR committee and disclosure as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is attached herewith as Annexure 6 and forms an integral part of this Annual Report.

27. Internal Audit:

Your Company has continued its engagement with M/s. Ernst & Young LLP, to conduct internal audit across the organization during the year under review. We have also strengthened the in-house internal audit team to supplement and support the efforts of M/s. Ernst & Young LLP.

28. Internal Financial Control system and their adequacy:

The management has laid down internal financial controls to be followed by the Company. We have adopted policies and procedures for ensuring the orderly and efficient conduct of the business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control system commensurate with the nature of business, size and complexity of operations and has been designed to provide reasonable assurance on the achievement of objectives in effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. In furtherance to this, your Company has instituted an online compliance management system within the organization to monitor compliances and provide update to senior management and Board on a periodic basis. The Audit Committee and the Board periodically monitor status of compliances with applicable laws.

As part of the Corporate Governance Report, CEO/ CFO certification is provided, for assurance on the existence of effective internal control systems and procedures in the Company.

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 supports a continuous improvement program. The internal audit program is managed by an Internal Audit function; and the Audit Committee of the Board oversees the Internal Audit function.

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

29. Whistle Blower/Vigil Mechanism for Directors and employees:

Section 177(9) and (10) of the Companies Act, 2013, mandates every listed company to establish a vigil mechanism for its directors and employees which shall function as a channel for receiving and redressing their complaints. The vigil mechanism provides for (a) adequate safeguards against victimization of persons who use the vigil mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.

Under this policy, we have adopted a vigil mechanism which would encourage our directors, employees and all other stakeholders to report any incidence of fraudulent financial or other information to the stakeholders, reporting of instance(s) of leak or suspected leak of unpublished price sensitive information, and any conduct that results in violation of the Companys code of business conduct, to the management (on an anonymous basis, if employees so desire). Further, your Company has prohibited discrimination, retaliation or harassment of any kind against any employee who reports under the vigil mechanism or participates in the investigation.

Awareness of policies is created by, inter alia, training and sending group mailers highlighting actions taken by the Company against the errant employees. All complaints received through the whistle blower mechanism are reviewed and investigated by the Ombudsperson. Dedicated email address has been created to facilitate receipt of complaints directly by the Ombudsperson.

The Audit Committee periodically reviews the functioning of this mechanism. No individual in the Company has been denied access to the Audit Committee or its Chairperson.

This meets the requirement under Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of Listing Regulations.

Mechanism followed under the process is appropriately communicated within the Company across all levels and has been displayed on the Companys intranet and website at https://www.hcgoncology.com/policies-and-guidelines/..

30. Code for Prevention of Insider Trading:

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by Designated Persons and their Immediate Relatives under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code of practices and procedures for fair disclosure of unpublished price sensitive information which has been made available on the Companys website at https://www.hcgoncology.com/ policies-and-guidelines/.

31. Companys Policy on Appointment and Remuneration of Directors:

The Nomination and Remuneration Committee has framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel (KMP), senior management personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

The Policy of the Company on the Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of section 178 of the Companies Act, 2013, is available on our website https://www.hcgoncology.com/policies-and-guidelines/. We affirm that the remuneration paid to Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

32. Particulars of employees:

The statement containing particulars in terms of Section 197 (12) of the Companies Act, 2013, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 for the year ended March 31, 2023 forms part of this Annual Report and is appended herewith as Annexure 3 to this Report.

A statement containing, inter alia, names of top ten employees and employees if employed throughout the financial year and in receipt of remuneration of INR 102 Lakhs or more, employees employed for part of the year and in receipt of INR 8.50 Lakhs per month or more, pursuant to Rule 5(2) the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is also provided in Annexure 3 to this report.

33. Significant or Material orders:

During the period under report, there were no material or significant orders passed by the Regulators/Courts/ Tribunals which would have an impact on the going concern status and operations of the Company in future.

34. Statutory Auditors:

The shareholders at the 19th (nineteenth) Annual General Meeting of the Company held on August 10, 2017, had approved the appointment of M/s. B S R & Co. LLP (Firm Registration No. 101248W/W-100022) as Statutory Auditors for a term of 5 (five) years commencing from the conclusion of the said Annual General Meeting of the Company, till the conclusion of the Annual General Meeting to be held in the year 2022.

Since the first term of M/s. B S R & Co. LLP, Chartered Accountants, as Statutory Auditor, was coming to an end at the Annual General Meeting held on September 29, 2022, the Board of Directors of the Company at their meeting held on May 26, 2022, on the recommendation of the Audit Committee, had approved the reappointment of M/s. B S R & Co., LLP, Chartered Accountants as Statutory Auditors, for a second term of 5 (five) consecutive years commencing from financial year 2022-23 and ending with financial year 2026-27, subject to the approval of shareholders.

The shareholders at the 24 (Twenty Fourth) Annual General Meeting of the Company held on September 29, 2022, had approved the appointment of M/s. B S R & Co. LLP (Firm Registration No. 101248W/W-100022) as Statutory Auditors for a term of 5 (five) years commencing from the conclusion of the said Annual General Meeting of the Company, till the conclusion of the 29__ (Twenty Nineth) Annual General Meeting to be held in the year 2027.

35. Statutory Auditors Report:

There are no qualifications, reservations or adverse remarks made by M/s B S R & Co. LLP., Statutory Auditors, in their report for the financial year ended March 31, 2023. The Auditors Report being self-explanatory does not call for any further comments from the Board of Directors, except for the following:

(a) Title deeds of immovable properties disclosed in the standalone financial statements are held in the name of the Company, except for title deeds of the properties of the Company in Ahmedabad, Bengaluru and Vijayawada. Please refer to Clause (i) (c) of Annexure A to the Independent Auditors Report on the Standalone Financial Statements of the Company, and Clause (xxi) of Annexure A to the Independent Auditors Report on the Consolidated Financial Statements of the Company for the year ended 31 March 2023, for the observations in detail.

(b) Proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears on their examination of those books and the reports of the other auditors, except that the back-up of Tally with respect to a subsidiary incorporated in India, whose financial statements reflects total assets (before consolidation adjustments) of INR 552.75 million as at 31 March 2023 and total revenues (before consolidation adjustments) of INR 663.29 million for the year ended on that date, as considered in the consolidated financial statements, which form part of the ‘books of account and other relevant books and papers in electronic mode have not been maintained on the servers physically located in India on a daily basis. The back-up of Tally has been maintained on the servers physically located in India as at the year end. Please refer to Sl. No.2 A(b) under the Report on Other Legal and Regulatory Requirements to the Independent Auditors Report on the Consolidated Financial Statements of the Company, for the observation in detail.

In this regard, the Board of Directors places its response as under:

(i) With respect to the observation under (a) above on the tittle deeds not in the name of the Company, all the three properties were owned by the subsidiaries of the Company viz., HCG Medi-surge Hospitals Private Limited (Ahmedabad), Banashankari Medical and Oncology Research Centre Private Limited (Bengaluru) and Healthcare Global Vijay Oncology Private Limited (Vijayawada).

Banashankari Medical and Oncology Research Centre Private Limited (Bengaluru) and Healthcare Global Vijay Oncology Private Limited (Vijayawada) have been amalgamated with the Company, and on account of the amalgamation, all the properties of these two companies have been transferred to the Company as per the order of the respective High Courts sanctioning the amalgamation. With respect to the property in Ahmedabad, it was owned by HCG Medi-surge Hospitals Private Limited, a subsidiary of the Company, where the legal ownership of the property has been transferred to the Company on account of the demerger of the multi-specialty business of HCG Medi-surge Hospitals Private Limited.

As per the Scheme of Amalgamation/Demerger as approved by the High Court, in respect of such of the assets belonging to the Transferor Company, the same shall, without any further act, instrument or deed, be transferred to and stand vested in and / or be deemed to be transferred to and stand vested in the Transferee Company. However, the Company is in the process of updating the name of the Company in the title deeds of these properties as required under local jurisdictional authorities.

(ii) Regarding the observation on the maintenance of back up of Tally, this is with respect to BACC Health Care Private Limited, a wholly owned subsidiary of the Company (BACC), which is into the business of IVF, advanced diagnosis and treatment in the field of Assisted Reproduction Technology. IVF is one of the businesses which HCG entered into a decade ago and the business faced severe challenges last year given a rampant regulatory change which had taken the entire industry by storm. The Business stood up to the challenge and ensured all the regulatory compliances are duly met and has started to do quite well in the past few months, again.

BACC has a fully integrated Hospital Information System (HIS) which captures operational as well as certain financial information from the root level. This is the backbone of BACCs operations, and this application has been ring-fenced with all the adequate support infrastructure including maintenance, upgrades, backup etc. BACC uses Tally as its accounting software where entries are passed based on the information in the HIS and other data points. Tally is being backed up on a daily basis, while the HIS has been backed up on a daily basis. There were no instances of any information loss, or such matters due to Tally not being backed up daily, earlier. HCG places utmost emphasis on adoption of Information Technology tools to foster growth of the business as appropriate.

Further, the Statutory Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or reenactment (s) for the time being in force).

36. Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report:

No material changes and commitments, other than disclosed as part of this report, affecting the financial position of the Company have occurred between March 31, 2023 and the date of the report. There has been no change in the nature of business of the Company during the last financial year.

37. Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. V. Sreedharan, Partner, M/s V. Sreedharan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended March, 31, 2023. The said Report of the Secretarial Auditor in Form MR 3 as required under Section 204 of the Companies Act, 2013 read with Regulation 24A(1) of the Listing Regulations is annexed herewith as Annexure 1 and forms part of the report.

The Secretarial Auditors, in their report for the financial year ended March 31, 2023, have observed that:

As per Regulation 11(b) of Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 read with Rule 23(6) of Foreign Exchange Management (Non-Debt Instruments) Rules,2019, the first level Indian Company making downstream investment shall file Form DI with the Reserve Bank of India(‘RBI) within 30 days from the date of allotment of equity instruments.

The Company has made downstream investments in 3 of its subsidiaries during the year. Though (2) two of the subsidiaries of the Company had filed Form DI earlier (other than the LLP), those filings were rejected by the Authorized Dealer Bank, requiring these subsidiaries to file Form DI in relation to the investments made by the Company prior to becoming a Foreign Owned Controlled Company (‘FOCC). These 2 subsidiaries have again filed the form DI on August 04, 2023, including those for investments made prior to the Company becoming a FOCC, and is waiting for any further updates from Authorized Dealer/ RBI.

With respect to the other subsidiary - HCG Sun Hospitals LLP (LLP), the LLP had not filed Form DI for the investment made by the Company on February 06,2023, as on March 31, 2023. However, the LLP has filed the form DI on August 04, 2023, including those for investments made prior to the Company becoming a FOCC, and is waiting for any further updates from Authorized Dealer/ RBI

In this regard, the Board of Directors would like to inform that the Company was unable to complete the filings within the due date, on account a new requirement of the Authorized Dealer Bank (AD Bank) requiring the subsidiaries of the Company to file Form DI for all the investments made by the Company prior to the Company becoming a FOCC. The subsidiaries of the Company had been filing Form D1 from December 2020 till December 2022, and the AD Bank had never come up with such a requirement, earlier.

As per The Master Direction – Reporting under Foreign Exchange Management Act, 1999, states that "An Indian entity or an investment vehicle making downstream investment in another Indian entity which is considered as indirect foreign investment shall file Form DI with the Reserve Bank within 30 days from the date of allotment of equity instruments."

Regulation 4(11) of Foreign Exchange Management (Mode of payment and reporting of non-debt instruments) Regulations, 2019 provides that: "The reporting requirement for any Investment in India by a person resident outside India shall be as follows: Form DI: An Indian entity or an investment Vehicle making downstream investment in another Indian entity which is considered as indirect foreign investment for the investee Indian entity in terms of Rule 22 of the Rules shall file Form DI with the Reserve Bank within 30 days from the date of allotment of equity instruments."

The user manual for the FIRMS Portal for reporting in Form DI refers to the date on which the investment became indirect foreign investment having to be reported, along with the date of allotment. It is not clear if this is intended to cover past allotments as well.

The Company has separately checked with some authorised dealers and have been informed that the position in this regard is not clear, and different authorised dealers have taken different positions on this at different points of time.

In our view, the requirements of the RBI Master Directions indicate that the filing is to be made at the time of the downstream investment being undertaken, and not in respect of prior investments. However, as mentioned above, the feedback from authorised dealers in this regard is that the position does not appear to be certain.

In view of this uncertainty and lack of clarity, the Company has filed Form DI as per the advice of the Authorized Dealer, and as a measure of abundant caution.

Pursuant to Regulation 24A(2) of the Listing Regulations, the Secretarial Compliance Report, issued by M/s. V. Sreedharan & Associates, Practicing Company Secretaries, Bengaluru is annexed herewith as part of Annexure 1.

Other than the above, there are no other qualification, reservations or adverse remarks made by M/s. V. Sreedharan and Associates, Practicing Company Secretaries, Secretarial Auditor of the Company in their Secretarial Compliance Report, and all the other information that have been included in the certificate are self-explanatory.

The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from 1st October 2017. The Company has devised proper systems to ensure compliance with its provisions and is in compliance with the same. Your Company has complied with the applicable Secretarial Standards relating to ‘Meetings of the Board of Directors and ‘General Meetings during the year.

In compliance with the requirements of Listing Regulations, Secretarial Audit Report of Material Subsidiary Company viz., HCG Medi-Surge Hospitals Private Limited is also attached herewith as Annexure 8 and forms an integral part of this Annual Report. The Secretarial Audit Report of HCG Medi-Surge Hospitals Private Limited is self- explanatory and does not contain any qualification, reservation or adverse remark.

38. Cost Records and Cost Auditor:

In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. Accordingly, such accounts and records were made and maintained for the financial year 2022-23.

The remuneration of M/s. Rao, Murthy & Associates, Cost Auditors of the Company for FY 2022-23, amounting to INR 1,75,000 (Rupees One Lakh Seventy-Five Thousand Only) (exclusive of taxes and re-imbursement of actual out-of-pocket expenses) in connection with the cost audit for FY 2022-23 has been ratified by the shareholders, at the AGM held on September 29, 2022.

Cost Audit Report for the financial year ended March 31, 2022 has been filed with the Registrar of Companies.

The board of Directors on the basis of the recommendations from Audit Committee has appointed M/s. Rao, Murthy

& Associates (Firm Registration No. 00065), Costs Accountants as the Cost Auditors of the Company for FY 2023-24 at a remuneration of INR 1,75,000 (Rupees One Lakh Seventy-Five Thousand Only) (exclusive of taxes and re-imbursement of actual out-of-pocket expenses, if any, subject to the ratification of the said fees by the shareholders at the ensuing AGM.

39. Particulars regarding Conservation of energy, Technology absorption and Foreign exchange earnings and outgo as per Section 134(3)(m) of the Companies Act, 2013:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is detailed in Annexure 7.

40. Prevention of Sexual Harassment Policy:

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. 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 Company conducts sessions for employees to build awareness amongst employees about the Policy and the provisions of Prevention of Sexual Harassment of Women at Workplace Act. The Companys process ensures complete anonymity and confidentiality of information.

The below table provides details of complaints received/ disposed during the financial year 2022-23.

Number of complaints pending at the beginning of the financial year	0
No. of complaints filed during the financial year	5
No. of complaints disposed during the financial year	5
No. of complaints pending at the end of the financial year	0

41. Green initiative:

All agenda papers for the Board and committee meetings are disseminated electronically on a real-time basis.

The information regarding the performance of the Company is shared with the shareholders vide the Annual Report. The Annual Reports for FY 2022-23 are being sent in electronic mode, to all members who have registered their email ids for the purpose of receiving documents / communication in electronic mode with the Company and/or Depository Participants. The Annual Reports are also available in the "Investor Relations" section on the Companys website https://www.hcgoncology.com/annual-reports/.

The General Circular No. 14/ 2020 dated April 8, 2020, the General Circular No. 17/2020 dated April 13, 2020, the General Circular No. 22/2020 dated June 15, 2020, the General Circular No. 33/2020 dated September 28, 2020, the General Circular No. 39/2020 dated December 13, 2020, the General Circular No. 10/2021 dated June 23, 2021, the General Circular No. 20/2021 dated December 08, 2021, the General Circular No. 3/2022 dated May 05, 2022 and the General Circular No. 11/2022 dated December 28, 2022 in relation to "Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and the rules made thereunder on account of the threat posed by COVID - 19" issued by the Ministry of Corporate Affairs, Government of India have permitted Companies to dispatch the Notice calling General Meeting and Annual Report by e-mail only.

The Company had during FY 2022-23 sent various communications including Annual Reports, by email to those shareholders whose email addresses were registered with the Company/Depositories. In support of the ‘Green Initiative the Company encourages Members to register their email address with their Depository Participant or the Company, to receive soft copies of the Annual Report, Notices and other information disseminated by the Company, on a real-time basis without any delay.

We are also in the process of starting a sustainability initiative with the aim of being carbon neutral and minimize our impact on the environment. Sustainability practices will be implemented and tracked diligently to ensure that we comply with the goals we set for ourselves.

42. Employee Stock Option Schemes:

As required under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the applicable disclosures as on March 31, 2023 are annexed to this Report as Annexure 2.

42.1 HCG ESOS 2014: Pursuant to regulation 12(1) of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014, the Company has obtained the approval of the members at the Annual General Meeting held on September 29, 2016, for ratifying Employee Stock Option Scheme of the Company (HCG ESOS 2014), the pre-IPO plan. HCG ESOS 2014 is in compliance with Securities and Exchange Board of India (Share Based

Employee Benefits) Regulation 2014 and there have been no material changes to the plan during the financial year.

42.2: HCG ESOS 2021: The Board of Directors of the company, on February 11, 2021, approved the new Employee Stock Options Scheme titled "HCG Employee Stock Option Scheme - 2021" (HCG ESOS 2021). The HCG ESOS 2021 allows the issuance of options to employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The shareholders have approved HCG ESOS 2021 vide Postal Ballot on May 23, 2021.

As per the Scheme, the Nomination and Remuneration Committee can grant the options to the employees deemed eligible. The Exercise Price shall be a price that is not less than the face value per share per option. Under the HCG ESOS 2021, a maximum of 62,67,000 (Sixty-Two Lakh Sixty-Seven Thousand Only) Options can be Granted exercisable into 62,67,000 (Sixty-Two Lakh Sixty-Seven Thousand Only) Equity Shares of face value of INR 10 (Rupees Ten only) each. Vesting of Options would be a function of continued employment with the Company (passage of time) and achievement of performance criteria as specified by the Nomination and Remuneration Committee as communicated at the time of grant of options. The option holders may exercise those options vested within a period of 7 years from the date of grant, while in employment.

The Nomination and Remuneration Committee of the board evaluates the performance and other criteria of employees and approves the grant of options based on the recommendation of the Strategy Committee. These options vest with employees over a specified period subject to fulfilment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Companys shares at a price determined on the date of grant of options. Upon HCG ESOS 2021 coming into force, it has been decided that no future grants shall be made under HCG ESOS 2014. The cost is determined by the fair value at the date when the grant is made using an appropriate valuation model and managements estimate of equity instruments that will vest. That cost is recognised over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. Total stock compensation cost for the year ended March 31, 2023 is INR 59.69 million (FY 2021-22: INR 28.33 million). No employee was issued stock options during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The stock option plans are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended and there have been no material changes to these plans during the financial year.

Disclosures on various plans, details of options granted, shares allotted upon exercise, etc. as required under the Employee Benefits Regulations read with Securities and Exchange Board of India circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 are available on the Companys website at httpsf://www.hcgel.com/investors/.

43. Directors Responsibility Statement:

Pursuant to Section 134 (3) (C) and 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year under review;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant Board committees, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2022-23.

44. Corporate Governance:

Your Company places utmost importance on its fiduciary role as a guardian of stakeholders interest and strives to achieve a mutually aligned objective of value and wealth creation for all interested parties. The Board and the Management humbly acknowledges this role and continues to propagate this belief through all layers of the organization to create an environment of accountability and trust.

These responsibilities continue to be the focus of its attention through the tumultuous ride along the path of expansion, ensuring the highest standards of ethics and integrity in all its business dealings while avoiding potential conflicts of interest. The result of this is a corporate structure which serves its ever-expanding business needs while maintaining transparency and adherence to the above stated beliefs.

A Report on Corporate Governance has been appended to this report and forms an integral part of this Report. As required by Regulation 17(8) read with Schedule II Part B of the Listing Regulations, the Executive Chairman, Wholetime Director & Chief Executive Officer and Chief Financial Officer have given appropriate certifications to the Board of Directors.

Further, pursuant to Regulation 34(3) of Listing Regulations read with Part E of Schedule V of the Listing Regulations, a certificate from M/s. V. Sreedharan, Partner, V Sreedharan & Associates, (CP Number 833), Bengaluru, Practicing Company Secretaries certifying the compliance with various provisions of the Corporate Governance is annexed to this Report.

The Company has received a certificate from M/s. V. Sreedharan, Partner, V Sreedharan & Associates, (CP Number 833) Bengaluru, Practicing Company Secretaries, pursuant to clause 10(i) of Part C under Schedule V of Listing Regulations that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India or the Ministry of Corporate Affairs or any such statutory authority and same forms part of the Corporate Governance Report.

45. Business Responsibility and Sustainability Report

In November 2018, the Ministry of Corporate Affairs (MCA) constituted a Committee on Business Responsibility Reporting ("the Committee") to finalize business responsibility reporting formats for listed and unlisted companies, based on the framework of the National Guidelines on Responsible Business Conduct (NGRBC). Through its report, the Committee recommended that BRR be rechristened BRSR, where disclosures are based on Environmental, Social and Governance (ESG) parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting. SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from the financial year 2022-23.

Your Company has, on a voluntary basis, opted for the BRSR report for Financial Year 2021-22 and has provided as a separate section for the same. BRSR report for Financial Year 2022-23 forms an integral part of this Annual Report.

46. Disclosure related to Insolvency and Bankruptcy.

During the financial year under review, there are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.

47. Declaration on Code of Conduct:

The Company has adopted the Code of Conduct for all its Senior Management Personnel and Directors and the same is affirmed by all the Board members and senior management personnel as required under Regulation 34 read with Part D of Schedule V of the Listing Regulations. A declaration signed by Dr. B. S. Ajaikumar, Executive Chairman and Mr. Raj Gore, Whole-time Director and CEO of the Company affirming the compliance with the Code of Conduct of the Company for the financial year 2022-23 has been annexed as part of this Report.

48. OTHER DISCLOSURES

a). Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

b). Your Company has complied with the applicable Secretarial Standards relating to ‘Meetings of the Board of Directors and ‘General Meetings during the year.

c). There were no instances where your Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

49. Acknowledgements and Appreciations:

We stay committed to partnering for value creation and take this opportunity to thank one and all who have participated in our journey this far. Your Directors desire to place on record, its sincere appreciation to all employees at all levels, who with sustained dedicated effort and hard work, enabled the Company to deliver a good all-round performance. Your Directors also wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by the vendors, business associates, consultants, bankers, regulatory and government authorities, shareholders and investors at large and look forward to their continued support. We also take this opportunity to express sincere thanks to the medical fraternity and patients for their continued co-operation, patronage and trust reposed in the Company and its healthcare services.

For and on behalf of the Board of Directors
Date: August 10, 2023	Dr. B. S. Ajaikumar
Place: Bengaluru	Executive Chairman

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