Max Healthcare Institute Ltd Management Discussions.


India is one of the fastest growing economies in the world and the second most populous country. Despite rapid development achieved in other fields, the performance when judged on healthcare parameters remains poor. Healthcare delivery in India is largely underdeveloped.

INDIA LAGS PEERS IN HEALTHCARE EXPENDITURE Total healthcare expenditure as % of GDP

According to the Global Health Expenditure Database compiled by the World Health Organisation (WHO), Indias expenditure on healthcare was 3.5% of gross domestic product (GDP) in 2017. India trails behind not just developed countries, such as the United States (US) and the United Kingdom (UK), but also developing countries, such as Brazil, Nepal, Vietnam, Singapore, Sri Lanka, Malaysia, and Thailand in healthcare spending in terms of percentage of GDP.

PUBLIC HEALTHCARE EXPENDITURE IS LOW, WITH PRIVATE SECTOR ACCOUNTING FOR BULK Government expenditure on health as % of Current Health Expenditure


The adequacy of a countrys healthcare infrastructure and personnel is a barometer of its quality of healthcare.

For India, thats where the concern begins. The country comprises nearly a fifth of the worlds population, but has an overall bed density of merely 12, with the situation being far worse in rural than urban India. Indias bed density not only falls far behind the global median of 29 beds, but also lags behind developing nations, such as Brazil (21 beds), Malaysia (19 beds), and Vietnam (26 beds).

Bed Densities across Countries (Hospital Beds/10,000 People)

Though the above data represents inadequate healthcare infrastructure, it also means that there exists a substantial potential for those involved in provision of healthcare services. In view of the same, the industry growth is expected at a CAGR of 17-18% and reach a value of INR 7.3 trillion by 2024.

The healthcare delivery industry clocked a compounded annual growth rate (CAGR) of 12-14% over fiscals 2016-2020. During the period, government healthcare spending grew 7-8%, slower than that of the private healthcare services which stood at 15-17% CAGR. The hospital industry growth is expected to slow down to 1-2% in the current fiscal due to the pandemic. The governments healthcare spending is expected to grow 25-30% in the current fiscal mostly to battle the pandemic. As against this, the private sector is expected to de-grow 10-15%. But once the infections subside, private players are expected to regain their momentum and drive industry growth.

The healthcare delivery industry is estimated at INR 4.4 trillion in FY21. This includes both in-patient treatments, which form almost 70% in value share, and out-patient consultations accounting for the balance 30%. While the governments share is estimated at 34-36%, the private sector enjoys lions share of 64-66%. Within the private sector, large hospitals form only 10-15% of the industry with the balance dominated by small and medium hospitals, indicating the fragmented nature of the industry.

Over the last four years, major hospital chains increased the supply (~70% of their incremental supply came during the period) in tier-II and -III locations. This was aimed at creating a referral network into their main centre by tapping into the underserved creamy tier-II areas. Other contributors to the demand are more structural in nature, such as increase in lifestyle-related ailments, increasing medical tourism, rising incomes and changing demography.


A combination of economic and demographic factors are expected to drive healthcare demand in the country. PMJAY scheme launched by the government would also be an additive to these drivers.

1. Change in Demographic Profile

With improving life expectancy, the demographic of the country is also witnessing a change. As of 2011, nearly 8% of the Indian population was of 60 years or more, and this is expected to surge to 12.5% by 2026. However, the availability of a documented knowledge base concerning the healthcare needs of the elderly (aged 60 years or more) remains a challenge. Nevertheless, the higher vulnerability of this age group to health-related issues is an accepted fact.

According to the Report on Status of Elderly in Select States of India, 2011, published by the United Nations Population Fund (UNFPA) in November 2012, chronic ailments, such as arthritis, hypertension, diabetes, asthma, and heart diseases, were commonplace among the elderly, with ~66% of the respective population reporting at least one of these. In terms of gender-based tendencies, while men are more likely to suffer from heart, renal and skin diseases, women showed higher tendencies of contracting arthritis, hypertension, and osteoporosis.

With Indias population expected to grow to ~1.4 billion by 2026 and, considering the above mentioned factors, the need to ensure healthcare services to this vast populace is an imperative. But this also provides a huge opportunity to expand into a space that bears huge potential.

2. Rising Income Levels to Make Quality Healthcare Services more Affordable

Even though healthcare is considered a nondiscretionary expense, considering that an estimated 83% of households in India had an annual income of less than INR 0.2 million in fiscal 2012, affordability of quality healthcare facilities remains a major constraint.

Growth in household incomes and, consequently, disposable incomes are critical to the overall growth in demand for healthcare delivery services in India. The share of households falling in the income bracket above INR 0.2 million is expected to go up to 35% in fiscal 2022 from 23% in fiscal 2017, providing potential target segment (with more paying capacity) for hospitals.

3. Driving Health Awareness to Boost Hospitalisation Rate

Majority of the healthcare enterprises in India is more concentrated in urban areas. With increasing urbanisation (migration of population from rural to urban areas) and awareness among the general populace regarding presence and availability of healthcare, services for both preventive and curative care would increase.

The hospitalisation rate for in-patient treatment as well as walk-in out-patients will improve with increased urbanisation and increasing literacy.

4. Non-communicable Diseases: A Silent Killer

As opposed to the decreasing rate in communicable diseases, lifestyle-related illnesses or non-communicable diseases (NCDs) have been increasing rapidly in India over the past few years. The contribution of NCDs to the disease profile has risen from 30% in 1990 to 55% in 2016. Statistics show that these illnesses accounted for nearly 62% of all deaths in India in 2016. As per the World Economic Forum, the world will lose nearly $30 trillion by 2030 for NCD treatments and Indias burden from this will be $5.4 trillion.

NCDs exhibit a tendency to increase in tandem with rising income. WHO projects an increasing trend in NCDs by 2030, following which demand for healthcare services associated with lifestyle-related diseases such as cardiac ailments, cancer and diabetes will rise. Another emerging market in the country is orthopaedics, which currently comprises a very small proportion compared

with NCDs, but has a potential market in the country. The orthopaedics market can be classified into four different segments, viz., knee, hip, trauma, and spine, of which the knee-replacement market holds the biggest share, followed by trauma and spine. Hip replacement in India is still a very small segment compared to knee replacement, whereas it is opposite around the world.

5. Growing Health Insurance Penetration to Propel Demand

Low health-insurance penetration is one of the major impediments to the growth of the healthcare delivery industry in India, as affordability of quality healthcare facilities by the lower-income groups remain an issue. As per the Insurance Regulatory and Development Authority (IRDA), nearly 472 million people have health insurance coverage in India (as of FY19), as against 288 million (in fiscal 2015), but despite this robust growth, the penetration in fiscal 2019 stood at only 36%.

While low penetration is a key concern, it also presents a huge opportunity for the growth of healthcare delivery industry in India. With the PMJAY scheme, insurance coverage in the country is expected to directly increase to nearly 50%.

Additionally, with health insurance coverage in India set to increase, hospitalisation rates will likely go up. In addition, health check-ups, which form a mandatory part of health insurance coverage, are also expected to increase, boosting the demand for a robust healthcare delivery platform.

6. Medical tourism in India

Healthcare costs in developed countries is relatively higher in comparison to India. Some of the factors, which make India an attractive destination for medical tourism, are the presence of technologically advanced hospitals with specialised doctors and facilities, such as e-medical visa.

Treatments mostly sought after in India are for heart surgery, knee implant, cosmetic surgery and dental care, due to the low costs of these treatments in India. Medical tourism in India is driven by the private sector in India.

As per the Ministry of Tourism, countries such as Singapore, Malaysia and Thailand also offer medical- care facilities to foreigners, but what differentiates India, besides the state-of-the-art infrastructure with reputed healthcare professionals, is traditional healthcare therapies, such as Ayurveda and Yoga, combined with allopathic treatments providing holistic wellness.

According to latest data available with the Ministry of Tourism, of the total foreign tourist arrivals in India, the proportion of medical tourists grew from 2.2% (0.11 million tourists) in 2009 to 6.4% (0.6 million tourists) in 2019.

Nearly 88% of the medical tourist are from countries like Africa, West Asia and other South Asian nations. Also, medical tourist from countries like United Kingdom and Canada are also seeing an increase, with the long waiting periods for availing treatments prevalent in these regions.

7. Government policies to improve healthcare coverage

The government has raised its healthcare budget by ~10% for fiscal 2021 to INR 69,000 Crore, keeping in line with its goal to raise its healthcare spending to 2.5% of GDP by 2025 under the National Health Policy 2017.

According to the government, inpatient hospitalisation costs have risen by 300% over the past 10 years and nearly six million families had to sell assets or borrow money to undertake treatment, thereby driving them to poverty.

The PMJAY was launched on September 23, 2018 with the objective of providing affordable healthcare. The scheme primarily has three objectives-

a) Strengthening physical health infrastructure: Sub-centres

Upgradation of 1.5 Lakh health and wellness centres to provide comprehensive healthcare, including coverage of non-communicable diseases and maternal as well as child health services. These centres would also provide essential medicines and diagnostic services free of cost. Inclusion of new ailments under the ambit of the scheme would go a long way in ensuring focus on preventive care as opposed to only curative care. A strong referral network is vital in providing a continuum of care.

b) Strengthening of Physical Health Infrastructure: Government Hospitals

Setting up of 24 new government hospitals and medical colleges and upgradation of existing district hospitals. The intention is to have at least one medical college for three parliamentary constituencies. The government already has a scheme in place, Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) to correct the geographical imbalance in the availability of tertiary healthcare. Six AIIMS campuses, one each at Patna (Bihar), Raipur (Chhattisgarh), Bhopal (Madhya Pradesh), Bhubaneshwar (Odisha), Jodhpur (Rajasthan), and Rishikesh (Uttarakhand), have been set up. Another AIIMS campus is under construction at Rae Bareli (OPD services have started) and 13 new ones have been announced by the government. Tackling issues of inadequate physical and personnel infrastructure is targeted via this objective.

c) Expansion of health insurance coverage: Ayushman Bharat

This involves a provision of INR 5 Lakh assured healthcare coverage to each family who is eligible, selected on the basis of inclusion under the Socio Economic Caste Census (SECC) list. Nearly 10.74 Crore families will be covered under the scheme. All existing central and state health insurance schemes will be subsumed under Ayushman Bharat. The model of implementation of the scheme (via insurance company, trust or mixed model) is left to the prerogative of the states.

However, healthcare delivery at affordable prices would require a shift in focus towards capitalising

on volumes (with nearly 1,650 Lakh new people coming under a healthcare scheme) rather than on value (via margins).

Future trends

While the healthcare delivery sector in India faces several teething issues currently, it also presents immense opportunities for the players involved. Factors, such as inadequate bed density and insufficient personnel highlight Indias poor healthcare infrastructure versus global levels, it reflects the immense potential in store for healthcare delivery players in the country.

This potential is further augmented with information and communication technology-enabled services gaining widespread popularity. Not only do these technologies increase the reach of healthcare facilities to the hitherto remote locations, they also help players achieve better efficiencies.

Data from the healthcare space is growing at a steady pace and this has driven hospitals to adopt artificial intelligence (AI)-based patient intelligence systems. These are expected to improve the operating metrics of the hospitals and drive timely detection of diseases.

The section highlights how certain emerging business models and technologies will help extend the reach and increase the efficiency of healthcare industry.

a) Single Speciality Healthcare Units

Single-Speciality healthcare units are those that treat patients with specific medical conditions, with the need of specific medical/surgical procedures. A single-speciality healthcare unit can be a hospital, clinic, or care centre. The advantage of these units is that, by focusing on providing care in a single segment, they can increase efficiencies as well as create a niche in the target segments. Nowadays, birthing centres are among the fastest growing single speciality centre. The occurrence of specific regulatory headwinds, however, can affect the margins of the business unit.

b) Day-Care Centres

The objective of day-care centres is to reduce the need for overnight hospitalisation. In this type of setup, a patient is allowed to go home on the same day after being treated. These centres have given rise to the concept of out-patient surgeries.

While this model is very popular in the eye care segment, other segments, such as arthroscopic surgery, general surgery, cosmetic surgery, and dental surgery have also been using this as a popular care delivery model. The advantage of the day-care centre model is that patients can save on bed/room rentals associated with overnight hospitalisation. The healthcare units, on the other hand, can have a streamlined setup with optimum equipment, staff and infrastructure, which helps bring down operational costs.

c) Geriatric Care Centres

The objective of end-of-life care centres or hospices and palliative care centres is to provide care and support to patients, who are suffering from terminal illness with a life expectancy of six months or less. Hospice and palliative care focus more on pain management and symptom relief rather than continuing with curative treatment. These centres are designed to provide patients a comfortable life during their remaining days and cover physical, social, emotional, and spiritual aspects apart from the medical treatment. Such type of care can be delivered onsite, where special facilities are set up, in the hospital premises, or at the patients home.

Palliative care is delivered with the help of an interdisciplinary team which may consist of patients physician, hospice doctor, a case manager, registered nurses, counsellor, a dietician, therapist, pharmacologist, social workers, and various trained volunteers. Depending upon the patients ailment and medical condition, the team prepares a customised care programme which comprises services such as nursing care, social services, physician services and trained volunteer support.

d) Home Healthcare

The primary objective of home healthcare services is to provide quality health care at the patients premises. In India, these services are still in the nascent stages. With increasing geriatric population, nuclearisation of families and increasing disease burden causing a strain on conventional health delivery systems, home healthcare will be a preferred alternative. Multiple healthcare start-ups have started vying for growth in this space.

The revenue from ICU beds wanes as weeks pass by and, hence, reducing the strain (both on hospitals and patients) can be explored through home healthcare. Patients can avail of ICU care at home at nearly a fifth of the prices of hospital care. Hospitals can also benefit by this model not just through reduced overcrowding, but also relief from associated hospital acquired infections.

The services currently offered are post-intensive care, rehabilitation and services of skilled/unskilled nurses. Certain areas, such as home therapeutic care for infusion and respiratory therapy, dialysis and convenience centred teleconsultation, among others have huge potential for growth. Apollo HomeCare (by AHEL) & Max@Home (by MHIL) are home care services provided by two of the largest hospital chain operators in the country.

e) Leveraging Technology for Greater Healthcare Efficiency and Affordability

Historically, digital uptake healthcare has been extremely slow. However, with the proliferation of data and increased availability and use of technologies, health systems are rapidly moving to digitisation of transactions, tasks and processes (translational) and gradually to fully integrated and personalised solutions (transformative). The new generation of customers will drive the adoption of digital technologies as healthcare moves away from the confines of a hospital. Remote care and telemedicine is an ever-evolving approach of diagnosis and treatment done remotely using telecommunication technologies. A number of corporate hospitals, such as Apollo Hospitals, Max Healthcare, Fortis Hospitals, Narayana Hrudayalaya and Tata Memorial Hospital have introduced telemedicine initiatives. Recent spread of COVID-19 has necessitated remote consultations and could pave way for widespread adoption of telemedicine not only during this crisis but also in the future.

AI applications in healthcare are rapidly changing medical specialities, such as radiology, pathology, ophthalmology, oncology, among others. Primarily used for screening, monitoring, and diagnostic assistance, AI applications include algorithms that analyse chest X-rays and other radiology images, read ECGs and spot abnormal patterns, automatically scan pathology slides and even assess fundus images for signs of retinopathy. Data-based decisions help improve quality of care, clinician productivity and address the challenges in scaling healthcare delivery to rural areas and make a huge impact on the masses. NIRAMAIs automated clinical decision solution to address a key issue in womens health has the potential to drastically reduce deaths due to breast cancer. The acceptability and incorporation of AI in healthcare going forward will increase efficiency, improve predictive capabilities and enable greater personalisation.

I n the coming years, we are certainly going to see a robotics play a key role in the global as well as Indian healthcare market. While we are witnessing increase instances of robots being used for laparoscopic surgery, automated pharma, and so on, robot nurses as a concept still needs a familiarisation. But with growing aging population and medical staffing issues, it will be a necessity soon and the trend is sure to catch up.

3D printing is another technological aspect that has limited utilisation at present, but has the potential to revolutionise healthcare in the future years. Medical uses for 3D printing, both actual and potential, can be organised into several broad categories, including tissue and organ fabrication, creation of customised prosthetics, implants, and anatomical models, and pharmaceutical research regarding drug dosage forms, delivery, and discovery. 3D printing is a compelling new technology that has the potential to revolutionise cardiac interventions. For instance, size of heart valve varies from person to person and with the availability of this technique, it is easy to plan the exact sizing. Also. in a country like India where there is scarcity of organs donation, this technique is quite helpful and evolving.


Currently, MHIL, its subsidiaries and silos comprise 13 healthcare facilities, including five hospitals and three medical centres in Delhi and the NCR region, with the remaining located in Mumbai, Maharashtra; Mohali and Bathinda in Punjab; and Dehradun in Uttarakhand. The Super Speciality Hospitals in Mohali and Bathinda are under PPP arrangement with the

Government of Punjab. Across all our 13 healthcare facilities, we had an average of 2,248 operating beds.

In addition to the above, we have the following 4 partner healthcare facilities:

• Max Super Speciality Hospital, Saket (a unit of DDF)

• Max Institute of Cancer Care, Lajpat Nagar (a unit of DDF)

• Max Super Speciality Hospital, Patparganj (a unit of BMDRC)

• Max Smart Super Speciality Hospital, Saket (a unit of GMHRC).

Partner healthcare facilities mean the hospitals and medical centres wherein the company and its subsidiaries provide healthcare services in key specialities for a fee and/or for a share of revenue.

Composite Scheme of Amalgamation and Arrangement:

The Scheme between the erstwhile Max India, Radiant, Max India (formerly known as Advaita Allied Health Services Limited), the Company and respective shareholders and creditors was approved by NCLT. The scheme involved a merger of the healthcare business of Radiant with the Company and an amalgamation of Max India with the Company. The certified copy of NCLT order was received on May 27, 2020 and accordingly the scheme became effective from June 1, 2020 after complying with necessary requirements under the Companies Act, 2013 ("the act") and Rules made thereunder.

Subsequent to the effective date of the scheme, healthcare business of Radiant Life (which is supported by global funding firm Kohlberg Kravis Roberts (KKR) has been demerged into the Company and also, residual Max India (i.e. post demerger of allied health and associated services into Advaita Allied Health Services Limited) which comprises healthcare activities (including its underlying investment in the Company) amalgamated with the Company. Pursuant to the Scheme, on June 19, 2020, 63,50,42,075 fully paid up equity shares of the Company were allotted to the shareholders of Radiant Life Care Private Limited (Radiant Life) as on the Record date 2 i.e. June 1, 2020 in the share entitlement ratio of 9,074:10 and 26,62,41,995 fully paid up equity shares to the shareholders of Max India Limited as on record date 3 i.e. June 15, 2020 in the share exchange ratio of 99:100. Also, pursuant to the Scheme, 26,69,97,937 equity shares each held by Radiant Life and Max India, in MHIL, got cancelled simultaneous to the issuance of equity shares to the shareholders of Radiant and Max India Limited as aforesaid, on June 19, 2020.

Post demerger and amalgamation, the Company has become the second largest healthcare delivery chain in India by revenue (considering only income from healthcare services aggregated for Company, Radiant and Partner Healthcare Facilities), in FY20, according to the CRISIL Report. The enhanced scale will enable it to drive efficiencies and improve capabilities.

Listing of Shares of the Company on NSE and BSE:

The equity shares of the Company are listed and actively traded on NSE under the symbol MAXHEALTH and BSE under the number 543220 effective August 21, 2020,

Our Service Profile

We provide a broad range of services, including advanced cardiac care, orthopaedics, oncology, renal sciences, neuro- sciences, transplants, minimal access metabolic and

bariatric surgery and other services, including obstetrics and gynaecology, paediatrics, nephrology and general surgery. We also provide outpatient services, including consultations for a range of ailments, preventive health screening and laboratory services as well as radiology, imaging and emergency services.

In addition to our core hospital business, we have two strategic business units, Max@Home and Max Lab. Max Lab offers diagnostic services to patients outside our hospitals directly as well as through a network of partners, such as clinicians, hospitals and nursing homes and pathology collection centres. It also offers pathology services to patients outside of our hospitals through a variety of other channels, including third- party hospital laboratory management. Presently, Max Lab has operations in the NCR region, Chandigarh, Panchkula, Mohali and other key cities in Punjab, Haryana and Uttarakhand.

Max@Home is the digitally-enabled service division of your Company focusing on making quality healthcare accessible to patients mainly at their home or workplace. Max@Home was launched in FY17 and has grown to have 12 service lines and 24/7 in-house customer support. Our services are supplemented with a care plan and an integrated technology platform.

Accreditations and Awards

We are focused on providing quality healthcare service since our incorporation, and strive to adhere to prescribed standards of clinical protocol in patient handling, surgical work, intensive care and emergency care. We aim to establish clinical and safety outcomes through a mix of accreditations (national and international), audits for continuous improvements, evidence- based practices, clinical leaderships, systems and protocols, patient safety goals and clinical indicators. All our healthcare facilities are NABH-accredited except Max Noida which has been recommissioned as daycare medical centre in latter part of FY20 and in addition, Max Super Speciality Hospital, Saket (West wing) and BLK Hospital are JCI accreditation and received the gold seal in February 2017 and April 2018, respectively. Similarly, all our hospital pathology labs are NABL-accredited and blood banks are NABH accredited.

We have won several awards for our facilities at different platforms, such as (i) Max Super Speciality Hospitals in Vaishali and BLK won the award for Quality Beyond Accreditation at the AHPI Healthcare Excellence Awards 2020 (ii) Max Nanavati Super Speciality Hospital, Mumbai won an excellence award in Intelligent hospital category by AHPI in March 2020, BLK Hospital won the Best hospital - Neurology (National), Gastroenterology & Hepatology (North), Orthopaedic (North) and Multi-Speciality Hospital (North) at ET Healthworld Awards 2020.

Medical Technology

We invest in medical technology and equipment as well as the modernisation of our hospital facilities to offer quality healthcare services to our patients and expand our range of healthcare services. Our facilities are fitted with contemporary medical technology and equipment, including new generation surgical devices to conduct minimally invasive surgeries, and we focus on obtaining the advanced technologies for providing healthcare services. We believe that investment in technology and equipment is critical to our operations as it leads to better outcomes, lowers ALOS and attracts reputed clinical talent. We also engage with medical technology companies and startups to apprise our staff of the latest technological innovations.

During the year, we installed Tomotherapy Radixact X9 system at Max Hospital Vaishali. The Radixact™ Treatment Delivery system is the next generation Tomotherapy platform, designed to enable doctors to more efficiently and effectively deliver precise radiation treatments to more patients.

Max Institute of Medical Excellence ("MIME")

Max Institute of Medical Excellence (MIME) in Saket, New Delhi, is the educational division of your Company that provides medical education and training. It is one of the centres recognised by the Joint Royal Colleges of Physicians Training Board (JRCPTB) to deliver post-graduate internal medicine training outside of the UK and the programme has recently been awarded the Level 3 Accreditation by JRCPTB-UK, signifying equivalence to UK standards. We are the only accredited centre in North India to host the prestigious MRCP-UK PACES examination. MIME conducts masters programmes in emergency training, in collaboration with the George Washington University, U.S.A. Due to the pandemic, the methods of imparting training and education had to be recreated and use of online platforms, webinars, videos have now become the norm. Our students made us proud by being the frontline warriors in the face of the pandemic and providing exceptional services under the guidance of our stellar faculty.

Clinical Research

We built a strong foundation in managing several sponsored clinical trials, collaborative research and investigator- initiated trials/studies across all major therapeutic areas. This includes Endocrinology, Public Health, NCD Epidemiology, Cardiology, Oncology, Neurology, Internal medicine, Critical Care Medicine, Pulmonology, Psychiatry, Anesthesia, Minimal Access Metabolic and Bariatric Surgery, Radiology, Nephrology & Kidney Transplant, Obstetrics & Gynecology, IVF, Urology, Physiotherapy & Rehabilitation, Ophthalmology, Gastroenterology, Pediatrics, Neonatology, Urology, Liver and Biliary Sciences, Rheumatology and Emergency medicine covering the areas of drugs, devices, epidemiological, artificial intelligence and machine learning on clinical/medical data as well as post-marketing surveillance studies. Since 2005, through the clinical research programme established at our facilities, we have been able to successfully initiate more than 300 sponsored clinical trials for whole Max network. However, majority of our research is being conducted at our partner healthcare facilities. All our clinical trials related to drugs and devices are conducted under strict supervision of Clinical Trial Registry - India (CTRI) and are designed to be compliant with applicable laws and regulations governing such procedures. Medical and para medical staff, including academicians and researchers publish their research work in high index peer-reviewed journals. For MHIL and subsidiaries, over 400 publications were featured in FY21, including both non COVID-19 and COVID-19 research. Also, we have taken a leading role in COVID-19 related research during the pandemic, which includes sero-epidemiological studies, investigator driven work and sponsored drug and clinical trials.

Digital Transformation

COVID-19 necessitated the need for adoption of digital technologies in the healthcare system and in the post- COVID-19 world, digital healthcare will be the new normal. In view of the same, Max Healthcare has taken range of digital initiatives to realise efficiency and ease the delivery of healthcare services. Video consultation platforms were

launched to connect patients and doctors remotely. The patients can book appointments, make payments and upload their documents using the mobile app. The doctors can review uploaded documents, conduct video consults, write, and share prescription on mobile/web app. The app is also integrated with IOMT devices (Omron and Kardia) for real-time monitoring of vitals. Other COVID-19 related initiatives include digitisation of home isolation package workflows, data capturing, among others. Digitisation is also applied in other non-clinical areas, such as patient and nurse feedback management, in-house kitchen processes and biometrics for employee attendance management.

Artificial Intelligence is being deployed in clinical areas especially radiology to augment reporting and decisionmaking. Qur AI solution for chest X-rays is deployed in Max Saket and Max Smart. It marks any abnormality in the X-ray and hence, assists radiologists in making faster decisions. Similarly, Predible Lung IQ solution enables nodule detection and fibrosis quantification for COVID-19 patients and hence, helps radiologists assess severity and disease progression. There are other solutions as well in the field of orthopaedics and neurosciences that are currently helping our doctors make informed clinical decisions.

Going forward, we are working towards creating an integrated digital platform that would help us deliver personalised and efficient healthcare services.

Corporate Social Responsibility

Max Healthcare Group has always believed in extending a helping hand to those in need. Last year was no exception, wherein we reached out to Lakh of patients, including the COVID-19 afflicted who were treated free of cost. We served over 1.12 Lakh indigent patients for free last year and provided medical services worth over INR 64.0 Crore to patients who couldnt afford treatment.

COVID-19 crisis management

In FY21, COVID-19 was an unprecedented crisis that impacted all businesses globally. We were at the forefront of the war against the deadly virus, and volunteered a few of our facilities towards the cause. We were one of the first private labs to start COVID-19 testing. We were also the first to conduct convalescent plasma therapy trial for critically ill patients. In response to the crisis, we created isolation facilities, established operating procedures on screening of patients, admission, management and treatment of COVID-19 patients. We also strengthened our operating procedures on infection prevention and control, healthcare worker safety and recommended protocols and guidelines on providing treatment, including performing surgeries of other patients during COVID-19 to help ensure the safety of our employees and patients. We leveraged technology to provide ‘video consultation for our patients. Max@Home offers home management and monitoring services to COVID-19 infected patients with mild symptoms.


1) Medical tourism business:

India is quickly emerging as a major medical tourism destination. We believe that India is highly competitive in terms of healthcare costs compared to other developed countries, such as the United States, the United Kingdom and Singapore.

Ailments (USD) US Thailand Singapore Korea India
Hip replacement 50,000 7,879 12,000 14,120 7,000
Knee replacement 50,000 12,297 13,000 19,800 6,200
Heart bypass 1,44,000 15,121 18,500 28,900 5,200
Angioplasty 57,000 3,788 13,000 15,200 3,300
Heart valve replacement 1,70,000 21,212 12,500 43,500 5,500
Dental implants 2,800 3,636 1,500 4,200 1,000

Source: CRISIL Research

Currently, we are the leading players of international business in the Delhi-NCR and we intend to build on this further. We treated international patients from multiple countries, with key inflow from Iraq, Afghanistan, Kenya, Nigeria and Uzbekistan. We intend to focus on attracting more medical value travellers from select markets, including those in the Middle East, Africa, Southeast Asia and CIS countries by increasing our marketing efforts in these regions. We also believe that international medical value travellers can help contribute to higher revenues per bed day and increase our profitability, and we intend to further leverage our brand recognition, direct and indirect presence to attract medical tourists through our or partner sales offices, clinicians visiting for OPD consultations, health camps and existing patient base.

In furtherance of this strategy, we established a representative office in Nairobi, Kenya and a wholly owned subsidiary MGHL in Nigeria, through which we aim to provide consultation services to patients and assess whether the patient needs to be brought to

India for surgery or operations. Also, we have recently resolved to incorporate a wholly owned subsidiary in the UAE for the purpose of business support services and/or activities in connection with the solicitation of the overseas patients. The wholly owned subsidiary is still under incorporation.

2) Brownfield Expansion in Existing Facilities

We have a total bed build-out potential of ~900 beds through our brownfield expansion and extension capabilities excluding 1,100+ additional beds in Partner Healthcare Facilities. We aim to explore the setting up of more hospitals over the next four to five (4-5) years and at the same time add incremental beds as extensions or additional wings in some of our existing facilities. This will help increase capacity and ramp up operations quickly in already established facilities.

3) Asset-light Models with Real Estate Investment Trusts (REITs) for Future Expansion

We believe that our core competence lies in providing healthcare services ranging from primary care to quaternary care. The healthcare sector is capital intensive and requires constant working capital for operations and expansion. In addition to building out our brownfield expansion capacity, we seek to move towards an ‘asset light model for the delivery of healthcare services through operation and management contracts, which we believe will enable us to focus on our core healthcare operations and our key medical competencies. We aim to implement this strategy by partnering with real estate developers who could build the hospital facilities as per our specifications and we would then operate and manage the hospital facilities by leveraging our brand and expertise in the healthcare industry.

4) Inorganic Growth Opportunities

I n addition to our brownfield expansions, we plan to opportunistically look at acquisitions (similar to the acquisitions undertaken by us in the past), operations and management arrangements, and other medical services agreements, among others, in the Indian market in line with our existing expansion strategy. This will help us in expanding our customer base in existing markets and reducing our time to market in new cities. For this, our focus would be primarily the metros and tier 1 cities.

5) Invest and Grow Pathology and Home Care Business

In addition to core hospital business, we plan to further scale up our MaxLab and Max@Home businesses to provide healthcare services outside our healthcare facilities. Going forward, we plan to build on both these adjacencies. For MaxLab, our initial focus is to deepen and widen our presence in the cities wherein Max Healthcare already has a presence through network facilities. In the long term, we plan to expand into new cities and grow our business by opening new collection centres, partnering with local collection centres for sample collection and signing new hospital lab management contracts. We plan to leverage the increasing digitisation of the healthcare industry due to COVID-19 by adapting current backend service delivery platform to enable more remote and virtual enabled services, such as providing virtual assessment by medical caregiver. Using the power of digitisation, Max@Home also plans to technologically enable and automate existing customer acquisition channels within our network by allowing customers to directly place a home care request over multiple online mediums (e.g., through mobile-based applications) during their visit to the hospital, among others, in order to grow our Max@Home brand. We also intend to utilize MaxLab and Max@Homes plug and play approach to provide new services and scale our digital business for future growth.

We have already received an approval to establish a wholly owned subsidiary called Max Lab Limited or any other name as may be approved by the Central Registration Centre (CRC) as well as the Ministry of Corporate Affairs (MCA). This subsidiary will provide diagnostic services, including pathology lab services to retail and non-captive customers as well as third-party Hospital Lab Management, and is under incorporation.

6) Improve Case and Channel Mix

We are focusing on investing in medical technology, attracting skilled physicians and surgeons, and developing our expertise in tertiary care areas. This will help us add sophisticated procedures and hence, improve our case mix. Also, we intend to improve our channel mix by improving share of international, cash walk-in and private and public insured patients who have procured insurance coverage from third party insurance providers as these patients tend to provide higher average revenue per patient for similar procedures compared to central as well as state government and local body patients, due to tariff differences.

Also, we intend to build on our upcountry markets to improve share of high-end tertiary care procedures as patients travel from far-flung areas to metro cities, such as Delhi-NCR to get high-end treatments. MHIL gets drainage from all of North India, including Uttar Pradesh, Bihar, Jharkhand, Punjab, Haryana, Rajasthan and other key states. We intend to deepen our reach up country by penetrating new cities or regions and establishing more number of sales offices or OPD centres to cater to the local population and refer to our tertiary care facilities for high-end procedures.


1) Increasing Competition Intensity

Healthcare being a high growth sector is attracting lot of new entrants. Most of these players are focused on metros and Tier 1 cities. Thus, there is increased competition in these markets that adversely impacts the profitability and growth potential for existing players. New players might offer lower rates and compete with us for doctors and other medical professionals. In that situation, we will reduce the price of our services or run the risk of attracting patients and doctors and other healthcare professionals to our healthcare facilities, adversely impacting the business.

2) Technology Disruption

The market for healthcare equipment and products is characterised by rapid technological changes, frequent new healthcare equipment and product introductions and technology enhancements, changes in patients needs and evolving industry standards. New equipment and products based on new or improved technologies or new industry standards can render existing equipment and products obsolete. To provide services effectively at our facilities, we enhance and develop our equipment and facilities, as well as provide sufficient training to our professional staff on a timely basis to satisfy the increasingly sophisticated requirements of medical professionals providing healthcare services at our hospitals.

Significant investment is required on an ongoing basis to prevent obsolescence of equipment and there is no assurance that we will have sufficient funds to continually invest in such equipment and facilities or access the latest technology on a timely basis. In the event that we are unable to keep up to date with the current trends and needs of the healthcare industry, our facilities may lose their competitiveness and market share, which may adversely affect our business.

3) Regulatory Risks Faced by the Healthcare Industry

Our business is affected by various challenges that are being faced by the Indian healthcare industry, including the provision of quality patient care in a competitive environment and managing costs at the same time. Healthcare costs in India have increased significantly over the past decade, and there have been and may continue to be proposals by legislators and regulators to limit the rate of increase, cap margins, fix the price of procedures and diagnostics, or lower healthcare costs in India. In FY17, the government had capped prices of drug-eluting stent and knee implants, which have had an impact on our operating margins. During the COVID-19 pandemic, the government imposed a cap on the treatment costs in private hospitals in regions, such as Maharashtra and Delhi to ensure that healthcare remains affordable. Such proposals by the Government of India impose limitations on the prices that we can charge for our services and increase the cost for our services, rendering an impact on our operating margins.

4) Higher Fixed Cost Operations

Our fixed costs typically include employee benefits expenses, other expenses towards professional and consultancy fees (including those paid to the doctors), rent, insurance, rates and taxes, facility maintenance expenses, power and fuel, repairs and maintenance, expenses for medical treatment of weaker sections, interest, depreciation, among others. Our fixed costs (MHIL consolidated excluding trusts) comprised 59%, 59% and 60% of our total expenses for FY19, FY20 and FY21, respectively. These fixed costs do not significantly vary depending on our revenue generated. For example, our occupancy rate dropped in FY21 due to COVID-19 pandemic and MHIL achieved occupancy of 64.7% in FY21 as compared to 71.0%% in FY20. However, despite this decline, we did not experience a corresponding decline in our fixed costs. Thereby, going forward, if we experience an increase in fixed cost, or if we are not able to grow our revenue in line with our fixed cost, our profitability will be severely impacted.


Pursuant to the merger of the healthcare undertaking of Radiant with MHIL, Radiant shareholders have been issued equity shares of MHIL (merged entity) and its pre-acquisition stake of 49.7% were cancelled upon implementation of scheme. The merger resulted in Radiant promoters taking control of the merged MHIL.

Above transaction resulted in a business combination under Ind AS 103 ‘Business Combinations and further applying the criteria laid in the accounting standard, the merger is being accounted for as follows:

1. Radiant has been identified as the accounting acquirer and thus the merger qualifies as a ‘reverse acquisition

2. MHIL financials are considered to be the continuation of Radiants healthcare undertaking financials (accounting acquirer) and thus all assets and liabilities of MHIL have been fair valued as per principles laid down in Ind AS 103. Demerged undertaking of Radiant is being accounted for at its carrying amounts

3. Further, since the business combination and control of Radiant over MHIL is achieved in stages, Radiants previously held stake of 49.7%* (in pre-merger MHIL) is fair valued as on June 1, 2020 and the resulting loss, has been recognised in profit and loss Strictly applying the principles of Ind AS 103, the financial result of MHIL (merged) for year ended March 31,2021 includes 12 months of operations of Radiant and 10 months of operations of MHIL (merged) and comparative financial result of MHIL (merged) includes 12 months of operations of Radiant only for the year ended March 31, 2020. Hence, MHIL consolidated financials for FY21 are not comparable with MHIL consolidated financials for FY20 and investors might not be able to draw any meaningful comparative insight. However, we have enclosed below summary of Audited Financial Results for FY21 along with comparatives.

Audited Financial Results of MHIL (Consolidated)

(INR in Crore)
For the year ended 31-Mar-21 For the year ended 31-Mar-20
Revenue from operations 2,505 1,059
Other income 114 48
Total income 2,619 1,107
Purchase of pharmacy, drugs, consumables and implants 580 229
(Increase)/decrease in inventory of pharmacy, drugs, consumables and implants 14 -12
Employee benefits expense 589 230
Professional and consultancy fee 533 247
Other expenses 385 271
Finance costs 179 83
Depreciation and amortization expense 174 46
Total expenses 2,453 1,094
Net profit / (loss) before exceptional items, tax & share of profit/(loss) in associate 165 13
EBITDA 518 142
EBITDA Margin % 19.8% 12.8%

To assist investors in evaluating MHILs consolidated performance (inclusive of subsidiaries) subsequent to the effectiveness of the scheme, we have provided below:

• Combined results of Radiant and your Company for the 12 months ended March 31, 2021, and (FY21 pro-forma);

• Combined results of Radiant and your Company for the 12 months ended March 31, 2020, (Unaudited Combined pro forma statement of profit and loss for the year ended March 31, 2020 or FY20 pro-forma)

1. Numbers for MHIL and subsidiaries (including BLK and Nanavati) for FY20 and FY21, though, merger was effective from June 1, 2020; Numbers are post IND AS 116

2. Net revenue represents Total Income as per financial statement

3. EBITDA before exceptional items and share of profit/(loss) in associates

Pro-forma Unaudited Financial Results of MHIL (Consolidated)

(INR in Crore)
For the year ended 31-Mar-21 For the year ended 31-Mar-20
Revenue from operations 2,683 2,943
Other income 115 99
Total income 2,798 3,042
Expenses - -
Purchase of pharmacy, drugs, consumables and implants 626 638
(Increase)/decrease in inventory of pharmacy, drugs, consumables and implants 13 -29
Employee benefits expense 646 679
Professional and consultancy fee 579 673
Other expenses 420 599
Finance costs 199 213
Depreciation and amortization expense 194 165
Total expenses 2,677 2,939
Net profit / (loss) before exceptional items, tax & share of profit/(loss) in associate 120 103
EBITDA 514 482
EBITDA Margin % 18.4% 15.8%

FY21 Pro-forma VS FY 20 Pro-forma Total income: Total income decreased by INR 244.3 Crore or (8%) to INR 2,797.7 Crore for FY21 pro-forma, from INR 3,042.0 for FY20 pro-forma, primarily due to decline in revenue from operations by INR 260.6 Crore or (8.9%).

Revenue from operations: Revenue from operations decreased by INR 260.6 Crore or (8.9%) to INR 2,682.4 Crore for FY21 pro-forma from INR 2,943.0 for FY20 pro-forma. The decrease was primarily due to decline in the occupancy and ARPOB primarily in H-1 because of lower OPD footfalls, delays in elective surgeries and slowdown in medical tourism as a result of the pandemic. The up-country patient flow was also disrupted due to restrictions on free movement earlier and later due to farmers protest related blockade.

Purchase of pharmacy, drugs, consumables and implants:

Purchase of pharmacy, drugs, consumables and implants decreased by INR 12.3 Crore or (1.9%) to INR 626.2 Crore for FY21 pro-forma from INR 638.5 Crore for FY20 pro-forma. This was in line with the decrease in the revenue from operations and due to material cost optimisation (minimised material cost and leveraged on economies of scale), which was partly set off against additional expenditure on PPE kit and other protection related consumables, such as mask, gloves and more.

Employee benefits expense: Employee benefits expense declined by INR 33.3 Crore or (4.9%) to INR 646.1 Crore for FY21 pro-forma from INR 679.4 Crore for FY20 pro-forma. The decrease was primarily due to improved workforce optimisation by helping enhance productivity of people as well as voluntary

temporary reduction of remuneration of senior and middle management during the year, which were fully restored by the third quarter of FY21.

Other expenses: Other expenses decreased by INR 178.5 Crore (29.8%) to INR 420.1 Crore for FY21 pro-forma from INR 598.6 Crore for FY20 pro-forma. The decrease was primarily due to (i) decrease in advertisement and publicity due to the raging pandemic and drop in International patient volume; (ii) decrease in outside lab investigation (iii) decrease in provision for doubtful debts and advances/bad debts written off (iv) implementation of cost optimisation programme, including re-negotiations with vendors, eliminating waste, reducing corporate overheads, deferment of discretionary expenses and increasing productivity of spend (v) Synergy benefits including policy level harmonisation initiatives across the network.

Professional and consultancy fees: Professional and consultancy fees decreased by INR 94.6 Crore or (14.1%) to INR 578.7 Crore for FY21 pro-forma from INR 673.3 Crore for FY20 pro-forma. The decrease was primarily due to re-negotiations of minimum guarantees and variable pay payable to doctors as well as by virtue of improving workforce productivity.

Finance costs: Finance costs decreased by INR 13.7 Crore or (6.4%) to INR 199.2 Crore for FY21 pro-forma from INR 212.8 Crore for FY20 pro-forma. The decrease was primarily due to decline in the borrowings in the fourth quarter of FY21.

Depreciation and amortization expense: Depreciation and amortisation expense increased by INR 28.7 Crore or 17.3% to INR 194.1 Crore for FY21 pro-forma from INR 165.4 Crore for FY20 pro-forma.

Profit before exceptional items, tax, share of profit/(loss) in associate: Due to the reasons mentioned above, profit before exceptional items, tax, share of profit/(loss) in associate increased by INR 17 Crore or 16.4% to INR 120.4 Crore for FY21 pro-forma from profit after tax of INR 103.5 Crore for FY20 pro-forma.

During the year, we were able to achieve growth in operating profit due to timely and agile actions. We conducted a detailed cost management programme wherein we identified and undertook cost-saving initiatives for FY21, such as focusing on standardising the type of drug or consumable used across the network, optimising procurement costs, consolidating our suppliers, and optimising the use of consumables by establishing guidelines for medical procedures across our network. We identified 100+ Crore structured annualised initiatives that resulted in 70+ Crore. EBITDA impact in Fiscal Year 2021.

We also maintained stable cash position by focusing on managing our working capital requirements through higher collections, especially from the Central Government Health Scheme, the Ex-servicemen Contributory Health Scheme, and other third-party administrator operated schemes.

Successful Qualified Institutional Placement

During March 2021, we issued 61,412,482 equity shares on face value of INR 10 each and at a price of INR 195.40 per equity share, including a premium of INR 185.40 per equity share (the Issue price), aggregating to ~INR 12,000 million (the Issue) via a qualified institutional placement as defined under Chapter VI of the SEBI ICDR regulations and applicable provisions of the Companies Act read with the applicable provisions of the PAS rules.

List of allottees allotted equity shares equal to or over 5% of the Issue size

# Name of the Allottees No. of Equity shares Allotted % of Equity Shares Offered in the Issue
1 SBI-focused Equity fund 1,02,35,414 16.7%
2 HDFC Trustee Company Limited-HDFC Flexi Cap Fund 88,66,427 14.4%
3 HDFC Trustee Company Ltd - A/C HDFC Mid- Cap opportunities Fund 64,73,899 10.5%
4 BNP Paribas Arbitrage - ODI 46,67,349 7.6%
5 The Nomura Trust and Banking Co., Ltd as the Trustee of Nomura India Stock Mother Fund 43,75,639 7.1%
6 Polar Capital Funds PLC - Healthcare Opportunities Fund 41,50,284 6.8%
7 Veritas Funds PLC on behalf of Veritas Asian Fund 34,33,981 5.6%
Total 4,22,02,993

Sharp Improvement in Net Debt Position

During the year, our net debt position (excluding lease liability) improved sharply from INR 1,888 Crore as on March 31,2020 to INR 347 Crore as on March 31,2021. Improvement is primarily driven by INR 1,200 Crore of funds raised by qualified institutional placement, INR 118 Crore of cash generated from cash flow from operating activities, INR 58 Crore of income tax refunds and so on.

March 31,2020 March 31, 2021
Gross debt 1,705 920
Put option liability 586 82
Gross debt, including put option liability 2,291 1,002
Cash and bank balance 404 655
Net debt (excluding lease liability) 1,888 347

ALPS Merger with SCHL

The Board of Directors of ALPS and SCHL, at their meeting held on March 26, 2021, approved the Scheme of Amalgamation (merger by absorption and hereinafter referred to as Scheme) under the provisions of Section 234, read with Sections 230 to 232 of the Companies Act, 2013 and relevant rules made thereunder. The Scheme is subject to necessary statutory and regulatory approvals, including approval of the Honble National Company Law Tribunal.


In an endeavour to be among the most well-regarded healthcare organisations, while creating greater value for all our stakeholders, including patients, employees and investors, we maintained a balanced focus on business transformation as well as people agenda last year. Owing to complex dynamics of the industry and bigger challenges pertaining to the pandemic, we focused on the vital elements of constantly delivering top- tier patient care, while also enriching the organisational culture as well as ensuring safety and well-being of our employees. The HR function focused on the following interventions to help build an engaged workforce that is committed to high-quality patient care.

Learning & Development: Our organisational success is built on the engagement, commitment and capabilities of our employees. To put our strategies to action, learning and development programmes play a crucial role in enabling employees in achieving specialized skill sets. To improve domain knowledge and incorporate customer-centric attitude

to keep pace with the changing times, we reinstated the functional learning path with enhanced focus on programmes like medical induction for clinicians, comprehensive induction (Virohan) for nursing and likewise (Aarambh) for front office team. Multiple workshops and training sessions were organised under the key pillars of service excellence, supervisory capability, and managerial capability development. To build organisational awareness and shape employees into brand ambassadors of the organisation, Max Star Programme was launched in October 2020 with three-level certifications (Silver, Gold and Platinum).

Digital HR: As part of the integration and to ensure uniformity, Disha (Human Resource Management System), inclusive of a performance management framework, was launched across networks to enhance employee experience. With these interventions, we shifted gears towards higher efficiency, productivity and sustainability during the year through continuous process enhancements and technological adaptations. In order to streamline monitoring of labour compliances and create better visibility of compliance processes, we revamped the existing compliance tool to ‘Complinity and ensured seamless implementation across all our healthcare facilities.

Talent Acquisition and Management: Recruiting and retaining the best talent, keeps the organisation in a stronger position to deliver high quality care, translating into high levels of patient safety, satisfaction and overall organisational excellence. We, therefore, focused this year, on strengthening our clinical talent pool, and on-boarded several senior clinicians, nurses and paramedical staff across various units.

Employee Health and Wellness: The healthcare industry has been at the epicenter of the unprecedented challenge birthed by the COVID-19 pandemic. While our healthcare workers battled at the frontline in response to the pandemic, their health and well-being became the utmost priority for us. Some of the interventions undertaken in this regard included free treatment of employees at any of the Max Hospitals, free RTPCR tests, pick and drop facility, stay and accommodation arrangements for staff on COVID-19 duty, dynamic rostering, and redesigning of infrastructure to ensure safety.

Compensation and Benefits: In order to ensure pay parity within the network we instituted revision in the employee compensation structure, band structure and compensation philosophy. The new responsibility level bands were introduced with an underlying principle to ensure orderly movement of employees, vertically and horizontally, for positions encompassing a breadth of functions.

Governance: As a build up to our ongoing focus on strengthening governance, we rolled out a mandatory online training module on anti-bribery and anti-corruption policy for employees. Policies on background verifications were also revamped.

An engaged workforce is essential for long-term organisational growth. Thus, we made sincere efforts to understand how our employees feel at work and identify areas of improvement. Adoption of our four core values - Compassion, Consistency, Excellence and Efficiency, enable our people to inculcate behaviors and practices that truly empower us to deliver best- in-class patient care services.

Awards and Recognitions

List of awards won during the year (HR)

1. PeopleStrong New Code of Work Awards 2021 Winner - Mid-size enterprises

2. Consortium of Accredited Healthcare Organisations (CAHO) Encouragement Award 2021 for HR Best Practices


We are subject to a number of environmental regulations given that the activities carried out by our various establishments might have an impact on the environment. The aim is to prevent, abate and control pollution and conserve environment. With respect to the same, we undertake several initiatives, such as maximum recycling of treated wastewater, optimising water consumption in general and patient areas, re-use of dialysis RO reject water in cooling tower, organic waste convertors, installation of rainwater harvesting system and other environment-friendly initiatives. Regular trainings are being conducted to better manage COVID-19 medical waste.

Steps are taken towards energy conservation in our hospitals. We have designed our facilities keeping in view the objective of minimum energy losses. We also conduct regular review of energy consumption and devise ways for effective control on utilisation of energy. We undertook several initiatives, such as LED-based lighting systems, green power purchase, improvement in energy performance of HVAC system, observation of Earth Hour, among others.

Our facilities are subject to risk of fire as we handle and use certain chemicals, such as alcohol, sanitisers, gases, fuel and other inflammable materials at our facilities. Any short circuit of power supply for our equipment and machines, including air conditioning plants could result in accidents and fires. Thus, regular comprehensive safety audits are conducted at all Max units by a third-party firm to verify and review safety and environment standard with respect to Indian and international norms, which include fire and electrical safety, environment management, chemical safety, security and general safety. In FY21, we undertook several initiatives to ensure fire safety at our hospitals. Some key initiatives include installation of gas suppression system at areas where conventional sprinklers cannot be installed, fire door installation to provide compartmentation, augmentation of smoke exhaust and ventilation at various units and other safety measures. Mock drills and fire safety trainings are also conducted regularly at our facilities.


Given the wide scale of operations, our Company is exposed to a wide range of strategic and operational risks. The management is overall responsible for identifying, evaluating and managing all significant risks faced by the Company. The Board monitors and reviews the implementation of various aspects of our risk management framework through the Audit Committee.

We follow detailed risk assessment and mitigation procedures, which are reviewed by the Audit Committee from time to time. Our risk management framework is approved by our Audit Committee for identifying risks and opportunities that may have a bearing on the organisations objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy.

The Audit and Risk Management Committee (A&RM Committee) assists the Board in evaluating our risk management system, including risk framework; risk management processes, which includes risk identification, assessment, classification/ evaluation, mitigation, monitoring/review and reporting, as down by the Management. The Audit Committee provides oversight on our management of key risks, including clinical, strategic, legal & compliance, human resource and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework. Our management with the help of risk owners re-assessed the risk register, and residual risk rating for two risks has been moderated, considering the current mitigation plans in place. It also identified the three newly emerging in course of current business scenario. Detailed update on risk mitigation plan is provided to the Audit Committee separately.

In the opinion of the Board, none of the risks faced by our Company threatens its existence. However, keeping in view the areas in which our Company operates, risks with respect to litigation by/against our Company or regulatory directions may impact on various cost lines and become material in nature.


Our Company has put in place an adequate system of internal financial control commensurate with its size and nature of business, which helps in ensuring the orderly and efficient conduct of business. The internal control framework is enabled by the electronic workflows, deployment of robotic process automations and IT-enabled controls.

These systems provide a reasonable assurance with respect to providing financial and operational information, complying with applicable statutes, safeguarding assets of our Company, prevention and detection of frauds, accuracy and completeness of accounting records and ensuring compliance with corporate policies. It also ensures that all transactions are properly authorised, recorded, and reported.

During the year, we performed our business process assessment and designed additional internal controls that should be taken care for periodic verification. Management performed testing for all key controls and no reportable material weakness in the design or operation was observed.

Our management has strengthened the internal control framework through a third-party tool called Complinity, and define workflow for each internal control testing. This tool requires periodic confirmation from control/process owners to confirm about discrepancy/effectiveness of control requirement from time to time, and require approval on their submission status by their reporting managers and HODs, to ensure any discrepancies will be identified on proactive basis so that remediate actions can be taken appropriately and timely. The tool is going live in in phases and is expected to fully implemented by the end of June 2021.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Further, in the design and evaluation of our disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our Company has a dedicated Internal Audit team and the Internal Audit Head reports functionally to the Audit Committee of the Board that reviews and approves annual internal audit plan. Our Companys Audit Committee, which is a subcommittee of the Board, reviews internal control systems, internal audit reports and performance of the internal audit function on a periodic basis.


FY21 was an unprecedented year with the world grappling with the pandemic and ensuing stringent restrictions on public gatherings and travel. The pandemic in India triggered a nationwide lockdown in March 2020. The average inpatient occupancy rate of beds at our facilities dropped sharply in the first three months of 2020, with a gradual recovery seen across the network. Towards the later part of the year normalcy restored as the threat of the virus reduced, and our business started showing signs of improvement. However, in late March 2021, the second wave of COVID-19 emerged and hit even harder than the first wave. The second wave is expected to continue till the first quarter of FY22 with record high occupancy levels and majority of our beds filled with COVID-19 patients. In these tough times, we are making maximum efforts to service our patients with full dedication and sincerity. Though its hard to be certain, but it seems that the situation will achieve normalcy post first quarter owing to increased vaccination as per new government regulations. However, we are being adequately prepared in case third wave hits the country in later part of the year. Further, in FY22, we, as an organisation will look for growth avenues through capacity expasnsion, acquisitions and improving operational metrics in the current facilities or businesses. We will also focus on strengthening our digital capabilities to ensure maximum reach and efficacy. Patient centricity, medical excellence and service excellence will continue to be an integral part of our vision of building an admirable institution.