Indraprastha Medical Corporation Ltd Directors Report.

Dear Members,

Your Directors are pleased to present their report and financial statements for the financial year ended 31st March 2019.

FINANCIAL RESULTS

(Rs. in million)
Particulars FY 2018-19 FY 2017-18
I. Revenue from Operations 7,881.72 7,526.60
II. Other Income 4.67 7.91
III. Total Income (I+II) 7,886.39 7,534.51
IV. EXPENSES
Stores & Spares consumed 1,449.62 1,398.40
Employee benefits expense 2,002.05 1,940.14
Finance costs 68.71 88.99
Depreciation and amortization expense 297.54 306.82
Other expenses 3,622.26 3,460.11
Total expenses (IV) 7,440.18 7,194.46
V. Profit before exceptional items and tax (III-IV) 446.21 340.05
VI. Exceptional Items - -
VII. Profit/(loss) before tax (V-VI) 446.21 340.05
VIII. Tax expense:
(1) Current tax 185.28 139.31
(2) Deferred tax (23.20) (10.29)
IX. Profit/(loss) for the year (VII-VIII) 284.13 211.03
X. Other Comprehensive Income
(i) Items that will not be reclassified subsequently to profit or loss
Re-measurement gains (losses) on defined benefit plans (1.72) 3.73
Income Tax effect (Deferred Tax) 0.60 (1.30)
(1.12) 2.43
XI. Total Comprehensive Income for the year (Comprising Profit (Loss) and Other Comprehensive Income for the year) 283.01 213.46

TRANSFER TO RESERVES

The Company does not propose to transfer any amount to the General Reserve out of the amount available for appropriation in the current year.

DIVIDEND

The Directors are pleased to recommend payment of dividend on equity shares @ Rs. 1.60 per share (16 percent) for the financial year ended 31st March, 2019 (previous year Rs. 1.50 per share).

RESULTS OF OPERATIONS AND THE STATE OF COMPANY AFFAIRS

Operations

The Hospital remained committed to providing world class quality healthcare and services. Focus continued on improving operational efficiencies across functions, improving patient services and enhancing safety for patients and staff.

During the year under review, the financial performance of the Company has improved. The total income increased from Rs. 7534.51 million in the previous year to Rs. 7886.39 million. The Profit Before Tax (PBT) increased by 29.29%, from Rs. 343.78 million to Rs. 444.49 million and the Profit After Tax (PAT) increased by 32.58%, from Rs. 213.46 million to Rs. 283.01 million.

In the Main Hospital, total outpatient volumes including repeat visits, increased by 2.10% from 431011 to 440056, Average bed occupancy of the Hospital per day increased by 3.30% from 484 to 501, kidney transplants increased by 37.4% from 377 to 518, Apollo Annual Health Checks increased by 14.43% from 33304 to 38111, angiographies increased by 18.62% from 145 to 172, MRI increased by 16.5% from 10308 to 12005 and Ultrasound increased by 4.47% from 57880 to 60466, over the previous year.

The hospital successfully conducted its 1st Heart Transplant. A rare and difficult surgery "Exit utero IntraPartum treatment" also known as "Exit procedure" was performed on a 22 year old female, at 31-week pregnancy. This surgery is performed on a baby during LSCS. While baby is still connected with Placenta, it had a Teratoma mass that was compressing the babys trachea.

A 23 weeks pregnant lady with set of monochorionic (identical) twins, whose pregnancy was complicated by Twin to Twin transfusion syndrome (TTTS) —Quintero Stage 3, was managed successfully in the hospital.

A successful cadaveric renal transplant was done for a patient, post-allocation of a cadaveric kidney from NOTTO. The medical team perfectly co-ordinated the retrieval and transport of the organ from other Hospital to Indraprastha Apollo Hospitals.

First Robotic Parathryroidectomy—a rare Orthopaedics surgery—Osteosarcoma excision and mega-prosthesis implants with knee joints was performed in the Hospital on a 8 year old female child from Yemen.

Apollo Hospitals, Noida continued to perform well across all operational parameters and remained one of the leading destinations for Mother and Child Care, Dialysis and Apollo Health Checks.

The Govt. of NCT of Delhi announced a revision in minimum wages of around 37% w.e.f. 03.03.201 7 vide gazette notification dated 04.03.2017. A number of employer associations /individual corporate entities including this hospital, challenged the said notification and the Honble High Court of Delhi had quashed the notification on 04.08.2018. The Govt. of NCT of Delhi has challenged the order of the High Court of Delhi and has filed Special Leave Petition (SLP) before the Honble Supreme Court. The Honble Supreme Court has observed that although the judgement dated 04.08.2018 passed by the High Court of Delhi was under challenge, the wage fixed by the Govt. of NCT of Delhi is otherwise a fair wage and suggested that as an interim arrangement, the revised wages should come into effect. In compliance with Honble Supreme Court directions, the Company has been making regular payments to workforce effective 01.11.2018. The impact of revised minimum wages has been around Rs. 80 million per annum. This figure doesnt take into account the impact arising out of arrears, if any w.e.f 03.03.2017. The Hospital shall be putting in place mitigation measures to contain the impact to the extent possible. Further, the Court had also directed the State Govt to carry out a de-novo process of revision of rate of minimum wages. The State Labour department carried out the said exercise under 5 (1) (b) of the Minimum Wages Act and concluded the same on 15.02.2019. The matter is now pending with SC for final disposal.

Pursuant to the recommendations of the Expert Committee of Ministry of Health and Family Welfare, Govt. of India, which was constituted in compliance of the Honble Supreme Court judgment dated 29-012016 in WP (C) 527/2011 in the matter of Trained Nurses Association of India Vs. Union of India &Ors. and further on the recommendations of the Expert Committee appointed by DGHS, Govt. of NCT of Delhi vide order dated 04-072017, subsequent to WP (C) No. 5103/2017 filed before the Honble High Court of Delhi by Indian Professional Nurses Association (IPNA) seeking directions regarding compliance of Honble Supreme Court Judgement, the DGHS, Govt. of NCT of Delhi has issued an order which inter-alia provides that in case of more than 200 bedded hospitals, salary given to private nurses should be onpar with the salary of the State Govt. nurses given in the concerned State / UT for the similar grade and to comply with the order within 3 months from the date of issue of the order. Failure to complywith the order shall be viewed seriously and strict action including cancellation of registration of defaulter private hospitals would be taken.

The Association of Healthcare Providers of India (AHPI) of which the Company is also a member had filed a writ petition in the High Court of Delhi challenging the order issued by DGHS. The Notice on the petition had been issued with the Court having ordered the Govt. not to take any coercive steps in furtherance of the impugned order. If the order issued by DGHS, Govt. of NCT of Delhi is to be implemented, the consequent rise in costs shall have major adverse impact on the financials of the Company. After a series of hearings, the matter was reserved for judgement.

In the PIL titled IPNA vs Govt. of NCT of Delhi and Anr., WP (C5103/2017) the Division Bench of Delhi High Court vide its order dated 22/07/2019 has directed Govt. of NCT of Delhi to implement the recommendations of the expert committee in accordance with law, rules & regulations as early as possible.

Final Judgement in the writ petition titled AHPI vs Govt. of NCT of Delhi, WP (C7291/2018) has been pronounced on 24/07/2019 by the Delhi High Court upholding the Order dated 25/06/18 issued by the DGHS Govt. of NCT of Delhi.

However, in so far as the said order provided for cancellation of licenses of non-complying private hospitals/ nursing homes within 3 months, the Court has directed that such cancellation can take place only after the relevant private hospital/ nursing home is given an opportunity of being heard. During such hearing, it would be open for the private hospital/ nursing home to raise all objections, including on the question of whether the DGHS has the power to cancel licenses under the Delhi Nursing Homes Registration Act. The DGHS has also been directed to pass speaking orders upon conducting such hearing(s).

It has been clarified that the period of 3 months for cancellation of licenses for non-compliance shall re-start from today, i.e. 24 July 2019.

In the above backdrop, the hospital has been saddled with an enormous financial burden arising out of equivalence of Nursing salaries and working conditions with that of Delhi Govt. Hospitals. Keeping in view the gravity of the matter, cascading effect on other segments and the overall impact on business, the Company under the auspices of AHPI shall be taking recourse to appropriate legal remedies available.

The South Delhi Municipal Corporation (SDMC) has laid out a Policy for the Free Parking by hospitals / shopping malls etc. Whereas the stand of the Company is that it had been paying property tax to SDMC for paid surface parking area in the hospital and the surface parking area is not included in the Hospitals floor area ration (FAR) hence do not come under the free parking policy by hospitals / shopping malls etc. as laid out by SDMC.The Company has filed a Civil Writ Petition before the Honble High Court of Delhi challenging the action of the SDMC. In the meanwhile, the Company has stopped charging fee for parking of vehicles by the visitors to the Hospital. It has resulted into a loss of around Rs. 20 million per annum.

In a Public Interest Litigation (PIL), the Honble High Court of Delhi had held that free treatment provided by the Hospitalas per the terms of the lease deed shall be inclusive of medicines and consumables. The Company had filed a SLP before the Honble Supreme Court of India against the impugned judgment and order of the Honble High Court of Delhi. The Honble Supreme Court of India had admitted the SLP and passed an interim order on 30.11.2009. In pursuance of the interim order, the Hospital is providing free treatment to the patients referred by the Govt. of NCT of Delhi exclusive of medicines andmedical consumables.The SLP is pending before the Supreme Court of India. In order to address and resolve the long drawn litigation between the parties, without prejudice to its rights and contentions in the SLP, the Hospital is willing to provide free treatment including medicines & medical consumables up to 10% IPD and 25% OPD as applicable to other hospitals. The Company has filed an IA for the same and it is pending before the Supreme Court of India.

A Nodal Medical Officer deputed by the Directorate of Health Services, Govt. of NCT of Delhi, is present in the hospital to support, guide and monitor the treatment of patients referred by the Government.

During the year, a total of 30817 patients (27051 Out Patients and 3766 In Patients) were treated under the free category.

In order to improve the overall business, financial and operational performance of the Company, the following initiatives have been taken:-

1. Appointment of Consultant in key Specialities

Intense efforts are being made to recruit new Consultants who could contribute to increase the patient flow to the Hospital. An eminent gastroenterologist Dr. Yogesh Batra joined the hospital as Senior Consultant in the year. His addition to the faculty will further the hospitals service offerings in the field of Gastroenterology, Endoscopy, EUS, ERCP and Fibroscan services.

2. Chemotherapy Ward

The hospital commissioned a new state-of-the-art Chemotherapy Unit with 30 beds. The unit aims to provide comprehensive and class leading services to cancer patients with a focus on ensuring their comfort, dignity and ease of access to clinical services of the hospital. The commissioning of the unit is in line with the hospitals focus on expanding its existing Oncology services. The hospital is in the process of adding Tomotherapy Radiation unit, which will be the third radiation unit for the hospital.

3. Emergency Expansion

The Emergency Department of the hospital has been expanded to enhance its triage services which are critical for getting the appropriate care planned for any patient arriving at the Emergency Ward. This initiative has enabled further streamlining of the Emergency Services offerings of the hospital.

4. New Visitor Management System

The hospital introduced a new visitor management system to streamline the movement of visitors within the hospital. The new system ensures controlled access of visitors to appropriate wards and units of the hospital while also easing access of attendants and family members accompanying patients.

5. Staff Safety

In order to ensure a safe and conducive work environment for our staff, the hospital has reinforced safety measures through systemic, structural and procedural changes at key locations including the Emergency Department, the main entrance, staff entrance and the billing sections. These measures along with enhanced presence of security staff and strengthened liaison with law enforcement officials are to ensure that any potential incidents of violence or vandalism are brought to a minimum.

6. Additional Service Offerings

To expand the service offerings for staff and visitors, a new F&B outlet at the Atrium has been allowed to be operated by Nestle, the world leader in FMCG products and offers a range of beverages and food options round the clock.

Awards and Accolades

The Hospital received a number of accolades during the year under review. The Hospital Management Asia (HMA) recognizes and honours hospitals in Asia that carry out best practices in hospital management. This year, your hospital won the Gold Award for "Compassion Courage HopeRebuilding Livelihood" in the Community Involvement Category and "Uberization of Patient Transportation" in the Mobile and Online Services. The hospital also won Excellence Award in P2P (From Panic to Peace) Clinical Alarm safety Campaign in the Facility Management & Financial Improvement category and Apollo Ring of Care under Hospital CEO of the year category.

The hospital has also won AHPI Healthcare Excellence Award 2019 in Nursing Excellence and Quality beyond Accreditation. The Hospital has also won Best Hospital in Facility Management & Hospitality in 9th MT India Healthcare Awards 2019.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

(A) Conservation of Energy

Conservation of Energy and natural resources has continued to be one of the major objectives of the Hospital.

Our initiatives were aimed at reducing Water and Energy Consumption, Improving Efficiency of Chillers and thus further strengthening our commitment towards Environment Conservation. Some of the initiatives taken this year are:

Utilization of CSSD reject water for Boilers.

In order to strengthen our water conservation, a new frontier was discovered and the project was taken up to recirculate CSSD reject water to Boiler section, it is estimated we will recycle approximately 7500 KL of soft water on annual basis.

Maximization of Asset utilization to improve System Efficiency and Energy Savings in HVAC.

After Energy Analysis it was observed that 35-40% of Hospitals total energy is consumed by HVAC systems. So in order to save Energy we optimized HVAC Consumptions

The following implementations were carried out : -

1. Adjustment of Set-point of Chiller as per ambient/ building load conditions. Utilization of best Chillers at higher loads.

2. Improvement in Effectiveness of Cooling Tower by automation of Cooling towers, for monitoring and controlling of sump temperature.

3. Reduction in frequency of OT AHUs (35 Hz from 50 Hz) during non-operational hours. Reduction in frequency from 50 Hz to 35 HZ saves 50% in Energy Consumptions.

4. Replacement of Old AHUs (crossed end of life) with Energy efficient AHUs (Plug Fan Technology)

(B) Technology Absorption:

The Hospital continued its efforts to maintain standards at par with best hospitals globally. Investment was made in the latest technology in medical care, including new- age technology upgrades.

During the year, the following new equipment have been installed in the hospital:-

Digital Pathology Solution (DPS)

Digital Pathology Solution (DPS) also referred as Whole Slide Imaging wherein scanning of conventional glass slides is done in order to produce digital slides. The solution completely digitizes the histopathology workflow. It is also layered with Artificial Intelligence enabled computational pathology leading to significant reduction in inter and intra observer result variability, enabling objective and accurate diagnosis.

DNA Sequencer System (Genetic Analyzer)

Genetic Analysis is the process of studying and researching in field of science that involve genetic and molecular biology. Basic studies include identification of genes and inherited disorders. The main advantage of this application is DNA typing in paternity testing and testing for relatedness on the maternal or paternal lineage using autosomal, mitochondrial or Y-chromosomal DNA markers.

FOREIGN EXCHANGE EARNINGS & OUTGO

(a) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services; and export plans

The Company is engaged in the healthcare business and is not carrying on any export activities. The Hospital has been empanelled with eminent international insurance companies and has appointed healthcare facilitators in various countries to cater to international patients.

(b) Total Foreign Exchange Earnings and Outgo

During the year under review, foreign exchange earnings and outgo were as under:-

Earnings: Rs. 1483.32 million
Outgo : Rs. 149.22 million

BOARD MEETINGS

Four (4) Board meetings were held during the financial year ended 31st March, 2019. The dates of the meetings are as follows: 9th May, 2018, 28th July, 2018, 10th November, 2018, and 30th January, 2019. The intervening gap between the meetings was with in the period prescribed under the Companies Act, 2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

• Mr. S. N. Sahai resigned as a Director of the Company, effective from 29th June, 2018.

• Ms. Renu S. Karnad resigned as a Director of the Company, effective from 8th March, 2019.

• Mr. Ashok Bajpai resigned as Managing Director of the Company, effective from 15th June, 2019.

• Mr. S. Regunathan, Mr. Satnam Arora, Mr. Deepak Vaidya and Mr. T. S. Narayanasami have been reappointed as Independent Directors of the Company, for a period of 5 consecutive years effective from 1st April, 2019 to 31st March, 2024.

• Ms. Madhumita Ganguli has been appointed as an Additional Director w.e.f. 26th July, 2019. Ms. Madhumita Ganguli holds office of Director only up to the Annual General Meeting. A notice has been received from a member pursuant to Section 160 of the Companies Act, 2013, signifying his intention to propose the appointment of Ms. Madhumita Ganguli as a Director of the Company.

• In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Vineeta Rai, Director of the Company shall retire by rotation at the ensuing Annual General Meeting. Ms. Vineeta Rai, being eligible, has offered herself for re-election.

• In pursuance to the provisions of Section 203 of the Companies Act, 2013, Mr. Ajay Kumar Singhal - Vice President cum Company Secretary and Mr. Chander Prakash Tyagi - Chief Financial Officer, are the Key Managerial Personnel of the Company.

DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013.

COMPOSITION OF AUDIT COMMITTEE

The composition of the Audit Committee is given in the Corporate Governance Report.

All recommendations of the Audit Committee have been accepted by the Board of Directors of the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected, fraud or violation of the companys code of conduct or ethics policy, or any other grievance, the details of which are given in the Corporate Governance Report. The Whistle Blower Policy may be accessed on the Companys website on the link http://www.apollohospdelhi.com/downloads/Whistle%20Blower%20Policy.pdf. During the year under review, no matter has been received under Whistle Blower Policy of the Company.

SEXUAL HARASSMENT

The Company has zero tolerance towards sexual harassment at the workplace. In order to comply with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a policy on prevention, prohibition and redressal of complaints related to sexual harassment of women at the workplace. All women employees either permanent, temporary or contractual are covered under the above policy. An Internal Complaint Committee (ICC) has been set up in compliance with the said Act. During the year under review, five complaints pertaining to sexual harassment of women employees were reported to the Company and the same were investigated in accordance with the procedures prescribed and were redressed.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that:

• in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

• the appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the year ended 31st March, 2019.

• the proper and sufficient care has been taken 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;

• the annual accounts have been prepared on an ongoing concern basis.

• the internal financial controls to be followed by the Company had been laid down and such internal financial controls are adequate and were operating effectively; and

• the proper systems had been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has no subsidiaries or associate companies. The Company also does not have any joint venture.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return for the year ended 31st March, 2019, in Form MGT- 9, as required under Section 92 of the Act, is annexed as Annexure 1 which forms an integral part of this Report and is also available on the Companys website viz. www. delhi.apollohospitals.com

AUDITORS AND AUDITORS REPORT

M/s S.N. Dhawan & Co. LLP, Chartered Accountants were appointed as Statutory Auditors at the Twenty-ninth Annual General Meeting (AGM) of the Company held on 26th September, 2017, for a term of five consecutive years from the conclusion of the twenty-ninth Annual General Meeting till the conclusion of the thirty-fourth Annual General Meeting, subject to ratification of their appointment by the Members at every AGM.

The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting is done away with vide notification dated May 7, 2018, issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors.

The Report given by M/s. S. N. Dhawan & Co. LLP, Statutory Auditors on the financial statement of the Company for the year 2018-19 is part of the Annual Report. The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comment. The Auditors Report does not contain any qualification, reservation or adverse remark.

No instances or matters of fraud have been reported by the Auditors to the Audit Committee or the Board.

SECRETARIAL AUDITOR

The Board has appointed M/s RSM & Co., Company Secretaries, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended 31st March, 2019, is annexed herewith marked as Annexure-2, to this Report.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. covered under the Secretarial Audit. However, the Govt. of NCT of Delhi-one of the promoters of the Company, has not dematerialised their shareholding in the Company, as required under Regulation 31(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, the Govt. of NCT of Delhi has not filed disclosure of shareholding for the financial year ended 31st March, 2019, to the Stock Exchanges, under Regulation 30 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Requests have been made by the Company to the Govt. of NCT of Delhi to get their shareholding in the Company dematerialized and also to ensure compliance

of Regulation 30 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

COST AUDITOR

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to maintain cost records and accordingly, such accounts are made and records have been maintained every year.

The Board has appointed, M/s Devarajan Swaminathan and Co., Cost Accountants, as the Cost Auditors to conduct the audit of the cost records of the Company for the financial year ended 31st March, 2019. The Cost Auditor has given the Cost Audit Report for the financial year ended 31st March 2019, and the Cost Audit Report does not contain any qualification, reservation or adverse remark.

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors on the recommendation of the Audit Committee, re-appointed M/s Devarajan Swaminathan and Co., Cost Accountants (ICWA Registration No.100669) to audit the cost accounts of the Company for the financial year ending 31st March 2020 on a remuneration of Rs. 5.50 lakhs (previous year Rs. 5.50 lakhs).

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 their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s Devarajan Swaminathan and Co., Cost Accountants (ICWA Registration No.100669) for the financial year ending 31st March 2020, is proposed in the Notice convening the Annual General Meeting.

DEPOSITS

During the year under review, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in the future.

INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has an internal financial control system, commensurate with the size, scale and complexity of operations to ensure that the Companys financial statements are accurate, sufficient and credible, all assets are safeguarded and protected against losses that may arise from unauthorized use or disposition, incorrect use, any incident of fraud and inappropriate storage. Such internal control procedures are augmented by an extensive programme of internal and external audits, and periodic reviews by the management. Reasonable assurance is obtained based on evidence regarding processes followed and their appropriate testing of controls that such systems are adequate, comprehensive and are working effectively.

The Audit Committee evaluates the internal financial control system periodically.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

During the year under review, the Company has not given any loan nor made investment nor given guarantees under Section 186 of the Companies Act, 2013.

RISK MANAGEMENT

The Company has established an Enterprise wide Risk Management (ERM) Framework and has constituted a Risk Management Committee comprising senior executives.

The Company also has a Risk Management Policy for identification, evaluation and mitigation of business risks and opportunities. This framework helps establish ownership throughout the organization and embed risk management as an integral part of the business, and its goals and objectives. It helps the decision makers of the organization effectively recognize and to take account of uncertainty, the nature of that uncertainty, and to work towards a solution to address the same.

The Risk Management Committee identify elements of risks in different area of operations and to develop a policy for actions associated to mitigate the risks. The Risk Management Committee reviews and approves the risk management report on a quarterly basis before placing the same before the Board of Directors.

CORPORATE SOCIAL RESPONSIBILITY

The Company is committed to conducting its business in a socially responsible, ethical and environmental friendly manner, and to continuously work towards improving the quality of life of the communities where it operates.

The Company has a duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of the Company. As on 31 March, 2019, the Committee comprised four Directors viz. Ms. Vineeta Rai, Mr. S. Regunathan, Ms. Suneeta Reddy and Mr. Vinayak Chatterjee. Ms. Vineeta Rai is the Chairperson of the CSR Committee.

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Sanitation, Promoting Education and Health. These projects are in accordance with Schedule VII of the Companies Act, 2013.

CSR POLICY

The Company has in place a CSR policy which lays down its philosophy and approach towards CSR commitment. The CSR Policy may be accessed on the Companys website on the link http://www.apollohospdelhi.com/ downloads/corporate-social-responsibilitv-policv.pdf

Under the CSR Policy, the Company focuses primarily on the following programmes:

A. Community Development

B. Healthcare

C. Education and Skills Development

D. Research in Healthcare

The report on CSR activities for the financial year 201819, containing particulars specified in Companies (CSR Policy) Rules, 2014 including an update on the CSR initiatives taken by the Company during the year is given in Annexure - 3 and forms an integral part of this Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company. The policy on materiality of related party transactions as approved by the Board may be accessed on the Companys website at http:// www.apollohospdelhi.com/downloads/materiality-of- related-party-transactions.pdf

FORMAL ANNUAL EVALUATION

The Evaluation Criteria for Appointment/Re-appointment of Independent Directors along with Evaluation Criteria for Performance Evaluation of Independent Directors/ Directors/Chairperson and Performance Evaluation of the Board of Directors by each director, is annexed herewith marked as Annexure 4 to this Report.

During the year, the Evaluation cycle was completed by the Company internally which included the Evaluation of the Independent Directors by the Board of Directors and Evaluation of Non-Independent Directors and the Board as a whole, by Independent Directors of the Company.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, approved a policy for selection and appointment of Directors, Senior Management and for determining their remuneration. The Policy of the Company on directors appointment and remuneration, including the 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 the website of the Company, at https://delhi.apollohospitals.com/downloads/ Remuneration-Policv.pdf.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also provided in the Annual Report, which forms part of this Report.

Having regard to the provisions of Section 136(1) read with the relevant provisions of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Vice President cum Company Secretary and the same will be furnished free of cost.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Management Discussion and Analysis

Report and a Report on Corporate Governance are attached with this Report.

A Certificate from Practising Company Secretary regarding the Compliance by the Company of the conditions stipulated in Regulations Part C of Schedule V of the Listing Regulations is also attached with this report.

A declaration by the Managing Director pursuant to Regulations Part C of Schedule V of the Listing Regulations stating that all the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct, during the financial year ended 31st March, 2019, is also attached with this report.

INDUSTRIAL RELATIONS

The Industrial Relations scenario continued to be cordial during the year under review.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material change and commitment affecting the financial position of the Company, have occurred between the financial year ended on 31st March, 2019, and the date of the report.

ACKNOWLEDGEMENT

The Directors wish to thank and deeply acknowledge the cooperation, assistance and support extended by the financial institutions, banks, the Government of Delhi and the Union Government.

The Directors also wish to place on record their appreciation for the overall support and cooperation received from the consultant doctors and employees at all levels.

For and on behalf of the Board
Dr. Prathap C. Reddy
(DIN :00003654)
Vice Chairman
Suneeta Reddy
Place: New Delhi (DIN :00001873)
Date : 26th July, 2019 Director