Rainbow Child. Director Discussions


Dear Members,

Your Directors have pleasure in presenting the 25th Annual Report on the business and operations of your Company along with the audited financial statements (Consolidated as well as standalone) for the financial year ended March 31, 2023.

FINANCIAL RESULTS

The Financial performance of your Company for the financial year ended March 31, 2023 is summarized below:

(in H million)

Particulars Year ended March 31, 2023 Year ended March 31, 2022 Year ended March 31, 2023 Year ended March 31, 2022
(Consolidated) (Consolidated) (Standalone) (Standalone)
Total Income 12,044.39 9,926.95 11,452.19 9,454.14
Total Expenses 9,226.60 8,053.49 8,677.55 7,556.70
Profit/ (Loss) before Tax (PBT) 2,817.79 1,873.46 2,728.34 1,897.44
Profit/ (Loss) after Tax (PAT) 2,123.77 1,386.73 2,058.93 1,422.91

1. STATEMENT OF COMPANYS AFFAIRS

The Company delivered robust operational and financial performance during the current financial year, led by high patient footfalls and profitability across hospitals in every geography. Strong momentum was witnessed for all key operating metrics like occupancy, outpatient, inpatient and delivery volumes across hospitals.

2. FINANCIAL PERFORMANCE

I. Consolidated Performance

During the year under review, the consolidated income of the Company increased to H 12,044.39 million compared to H 9,926.95 million in the previous year, registering a growth of 21.33%. The consolidated net profit after tax increased to H 2,123.77 million compared to H 1,386.73 million in the previous year, representing a growth of 53.15%.

II. Standalone Performance

During the year under review, the standalone income of the Company increased to H 11,452.19 million compared to H 9,454.14 million in the previous year, registering a growth of 21.13%. The standalone net profit after tax increased to H

2,058.93 million compared to H 1,422.91 million in the previous year, representing a growth of 44.70%.

3. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of your Company for the Financial Year 2022-23, are prepared in compliance with applicable provisions of the Companies Act, 2013 (‘‘the Act"), Indian Accounting

Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The consolidated financial statements have been prepared on the basis of audited financial statements of the Company and its Subsidiaries, as approved by their respective Board of Directors.

4. DIVIDEND

During the Financial Year, your Company declared and paid dividend as under:

Date of Declaration Dividend Type Dividend Per Share
September Final Dividend H 2/-
15, 2022

Your Directors are pleased to recommend dividend of H 3/- per Equity Share of face value of H10/- each as

Final Dividend for the Financial Year 2022-23, for approval by the shareholders at the ensuing Annual General Meeting ("AGM") of the Company.

The Dividend Distribution Policy of the Company is also available at the website of the Company at: https:// www.rainbowhospitals.in/investor-relations/reports/ Dividend_Distribution_Policy.pdf.

5. TRANSFER TO RESERVES

During the year under review, no amount has been transferred to the General Reserve of the Company.

6. INITIAL PUBLIC OFFER

During the year under review, the Company successfully completed its Initial Public Offering ("IPO") in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, wherein 51,67,679 Equity Shares were issued through a fresh issue and 2,40,00,900 Equity Shares were allotted through offer for sale. The IPO comprised of a fresh issue of H2,800 million and an offer for the sale of H13,008.49 million by the selling shareholders.

The public issue was opened on April 27, 2022 and closed on April 29, 2022 at an offer price of H542*/- per Equity Share

(including a share premium of H532/- per Equity Share). The Companys IPO received an overwhelming response and was oversubscribed by 12.43 times, reflecting a huge investor appetite for the issue. The Equity Shares were allotted on May 6, 2022 at an offer price of H542*/- per Equity Share to the respective applicants under various categories. The Equity Shares of the Company were listed on the National Stock Exchange of India Limited ("NSE") and BSE Limited

(" BSE") (collectively referred to as "Stock Exchanges") on May 10, 2022.

*A discount ofH 20 per Equity Share was offered to the Eligible Employees bidding in the Employee Reservation Portion.

During the Financial Year 2022-23, the Company has utilised the IPO proceeds in accordance with objects of the offer as mentioned below:

(in H million)

S. No. Particulars Amount Allocated Funds Utilized Reasons for delay in utilisation of IPO Proceeds
1 Early redemption of Non- Convertible Debentures (NCDs) issued by our Company to CDC Emerging Markets Limited ("CDCEML"), one of our Group Companies, in full. 400.00 400.00 NA
2 Capital expenditure towards setting up of new hospitals and purchase of medical equipment for such new hospitals. 1,700.00 327.29 Delay in execution of one of the project has resulted in less spend of IPO money raised against the target provided in the prospectus of H 1,065 million.
3 General corporate purposes 561.40 Nil As the Company is utilising the funds generated from operations, the said proceeds were not utilised.
Total 2,661.40 727.29

There was no deviation or variation in the utilization of proceeds of IPO from the objects of Offer stated in the Prospectus dated May 2, 2022. Further, the detailed Monitoring Agency Report for such utilization of IPO proceeds received by the Company from its Monitoring Agency i.e., HDFC Bank, on quarterly basis affirming no deviation or variation in utilisation of the issue proceeds from the objects stated in prospectus dated May 2, 2022 was submitted to Stock Exchanges in compliance with the aforesaid regulations.

7. LAND ACQUISITION

Subsequent to the year under review, the Board of Directors have approved the purchase of two parcels of land admeasuring 9,391 Sq Mtr (~ 2.32 acres) and 4,987.10 Sq Mtr (~ 1.23 acres), situated in Sector 44 and Sector 56 respectively, Gurugram, Haryana ("Land Parcels"), being offered to the Company for allotment on freehold basis for setting up two hospitals, by Haryana Shehri Vikas Pradhikaran ("HSVP"). As on the date of this Boards Report, the Company awaits for the allotment letter to be received from HSVP.

The proposed expansion will strengthen the companys existing footprint in the National Capital Region by setting up two hospitals with capacity of ~400 beds in Gurugram enabling it to cater to the growing healthcare needs of the residents of Gurugram and neighborhood. The addition of these two hospitals will provide increased access to specialized pediatric and perinatal care services in the geography.

8. CHANGES IN SHARE CAPITAL

I. Changes in Authorized Share Capital

Pursuant to the Shareholders Resolution dated September 15, 2022 the Authorized Share Capital of your Company was changed from H 1,50,00,00,000/- divided into (a) 13,90,55,616

Equity Shares of H 10/- each (b) 11,46,771 - Series A 0.0001% Compulsorily Convertible Preference Shares of H 48/- each, and (c) 11,33,309 Series B 0.0001% Compulsorily Convertible Preference Shares of H 48/- each to H 1,50,00,00,000/- divided into 15,00,00,000 Equity Shares of H 10/- each by way of cancellation of unissued authorized preference share capital.

II. Changes in Paid-up Share Capital

During the year under review, the paid-up share capital was changed in the following manner:

a) Allotment of 22,80,080 Equity Shares on April 4, 2022 on account of conversion of (i) 11,46,771 0.0001% Series A Compulsorily Convertible Preference Shares of face value of H 48/- each into 11,46,771 Equity Shares of

H 10/- each and (ii) 11,33,309 0.0001% Series B Compulsorily Convertible Preference Shares of face value of H 48/- each into 11,33,309 Equity Shares of H 10/- each, at a conversion ratio of 1:1 as per the terms of the Restated Shareholders Agreement dated March 29, 2016 as amended thereafter, ranking pari passu with the existing Equity Shares.

b) Allotment of 51,67,679 Equity Shares of H 10/- under the IPO on May 6, 2022;

As a result of above, the paid-up share capital of the Company increased from H 1,04,99,83,120/- divided into (a) 94,053,928

Equity Shares of H 10/- each (b) 11,46,771 - Series A 0.0001% Compulsorily Convertible Preference Shares of H 48/- each, and (c) 11,33,309 Series B 0.0001% Compulsorily Convertible Preference Shares of H 48/- each to H 1,01,50,16,870 divided into 10,15,01,687 Equity Shares of H 10/- Each.

9. REDEMPTION OF NON-CONVERTIBLE DEBENTURES (NCDs)

During the year under review, on June 9, 2022, your Company has redeemed NCDs of H 400 million issued to CDC Emerging Markets Limited, in full from the proceeds of IPO.

10. EMPLOYEES STOCK OPTION PLAN /SCHEME

During the year under review, there has been no change in the Rainbow Employee Stock Option Scheme 2021

("ESOP Scheme 2021 or Scheme") as the scheme has not been implemented till yet.

Subsequent to the year under review, the Members of the Company had approved the "Rainbow Childrens Medicare Limited – Employees Stock Unit Plan 2023"

("Stock Unit Plan 2023"/ "Plan") by passing the special resolution through Postal Ballot on May 6, 2023 for issue of stock units to eligible employees, which may result in an issuance of a maximum number of 4,00,000 Equity Shares i.e., 4,00,000 Stock Units. The Stock Unit Plan 2023 is administered by the Nomination and Remuneration Committee.

Disclosure as stipulated under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 with regard to the ESOP Scheme 2021 and Stock Unit Plan 2023 is not applicable for the Financial year 2022-23.

11. SUBSIDIARIES

A report on the performance and financial position of each of the subsidiaries and their contribution to the overall performance of the company for the financial year ended March 31, 2023 in prescribed Form AOC -1 as per the Companies Act, 2013 is set out in Annexure- 1 and forms an integral part of this Annual Report.

The annual financial statements of the subsidiaries shall also be made available to the Members of the Company/ Subsidiary Companies seeking such information at any point of time. The annual Financial Statements of the subsidiaries are available under investors section on the website of the Company at https://www.rainbowhospitals.in/investors-relations/ subsidiary-financials

The Company has formulated a policy for determining material subsidiaries. The said policy is also available on the website of the Company at: https://www. rainbowhospitals.in/investorrelations/reports/policy/ Policy%20for%20determining%20Material%20 Subsidiary.pdf

During the year under review, no Company has become or ceased to a subsidiary, joint venture or associate of the Company.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION

No material changes and commitments, other than disclosed as part of this report, affecting the financial position of the Company have occurred between March 31, 2023 and as on the date of the report.

13. PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposit as prescribed under Chapter V of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

14. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the prescribed format and annexed herewith as Annexure- 2 to this Report.

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Annual Report. Further, the Report is being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, any shareholder interested in obtaining a copy thereof may write to the Company Secretary of the Company at companysecretary@ rainbowhospitals.in.

15. AUDIT COMMITTEE

The composition of Audit Committee has been detailed in the Corporate Governance Report, forming part of this Annual Report.

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

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL

I. Directors

Retirement by rotation and subsequent re-appointment

Dr. Dinesh Kumar Chirla (DIN: 01395841), Whole-time Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting

(" AGM") pursuant to the provisions of Section

152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and being eligible offers himself for reappointment. Appropriate resolution for his re-appointment is being placed for the approval of the Members of the Company at this AGM.

A brief profile of Dr. Dinesh Kumar Chirla and other related information is detailed in the Notice convening the 25th AGM of your Company.

Re-appointment of Independent Director

The Board of Directors in their meeting held on May 14, 2023, basis on the recommendation of the Nomination and Remuneration Committee and performance evaluation, approved the re-appointment of Dr. Anil Dhawan as an Independent Director for a second term of 5(five) consecutive years commencing from August 30, 2023 to August 29, 2028, subject to approval of the shareholders at the 25th Annual General Meeting. Appropriate resolution for his re-appointment is being placed for the approval of the Members of the Company at the 25th AGM.

A brief profile of Dr. Anil Dhawan and other related information is detailed in the Notice convening the 25th AGM of your Company.

During the year under review, there is no change in the composition of Board of Directors of your Company.

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as SEBI Listing Regulations. The Independent Directors have affirmed compliance to the Code of Conduct for Independent Directors as prescribed in Schedule IV to the Act.

In the opinion of the Board, Independent Directors fulfil the conditions specified in Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as SEBI Listing Regulations and are independent from Management. The Independent Directors are persons of high repute, integrity and possess the relevant expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) in their respective fields. The Independent Directors have also confirmed that they have registered their names in the Independent Directors databank with the Indian Institute of Corporate Affairs.

None of the Directors of the Company are disqualified as per the provisions of Section 164 of the Act. The Directors of the Company have made necessary disclosures under Section 184 and other relevant provisions of the Act.

II. Key Managerial Personnel

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

1. Dr. Ramesh Kancharla - Chairman and Managing Director;

2. Dr. Dinesh Kumar Chirla - Whole Time Director;

3. Mr. R Gowrisankar - Chief Financial Officer; and

4. Mr. Ashish Kapil - Company Secretary and Compliance Officer.

During the year under review, there is no change in the key managerial personnel of your Company.

Subsequent to the year under review, the Board of Directors, on the recommendation of Nomination and Remuneration Committee, at their meeting held on April 15, 2023 appointed Mr. Sanjeev Sukumaran as Group Chief Operating Officer (Key Managerial Personnel) of the Company in accordance with the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and SEBI Listing Regulations.

17. BOARDS EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees, and Individual Directors pursuant to the provisions of Companies Act, 2013.

A structured questionnaire was prepared after taking into consideration the inputs received from Nomination and Remuneration Committee, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated. The performance evaluation of Non-Independent Directors, Board as a whole and the Chairman of the Company was evaluated in a separate meeting of Independent Directors taking into account the views of executive Directors and non-executive Directors.

The feedback and results of the questionnaire were collated and consolidated report was shared with the Board for improvements of its effectiveness. The Directors expressed their satisfaction with the evaluation process.

Further, the evaluation process confirms that the Board and its Committees continue to operate effectively and the performance of the Directors and Chairman is satisfactory.

18. REMUNERATION POLICY

In compliance with the provisions of Section 178 of the Companies Act, 2013, the Board has, on the recommendation of the Nomination & Remuneration Committee of the Company, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration.

The salient features of the Policy are:

i. It lays down the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a director (executive/non-executive/independent) of the Company; ii. To recommend to the Board the policy relating to the remuneration of the Directors, KMP and Senior Management/Other Employees of the Company; and

iii. Reviewing and approving corporate goals and objectives relevant to the compensation of the executive Directors, evaluating their performance in light of those goals and objectives and either as a committee or together with the other independent Directors (as directed by the Board), determine and approve executive Directors compensation based on this evaluation; making recommendations to the Board with respect to KMP and Senior Management compensation and recommending incentive-compensation and equity-based plans that are subject to approval of the Board.

During the year under review, there has been no change to the Policy.

The Nomination and Remuneration Policy of the Company is available on the website of the Company and can be accessed at the following web link: https://www.rainbowhospitals.in/ investor-relations/reports/policy/Nomination_ and_Remuneration_Policy.pdf

19. NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES

The Board met Nine (9) times during the Financial Year 2022-23. The details of the meetings of the Board and Committees along with its composition and respective terms of reference thereof are given in the Corporate Governance Report, which forms an integral part of this Annual Report.

20. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

I. In the preparation of the annual accounts for the Financial Year ended March 31, 2023, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

II. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2023 and of the profit of the Company for the Financial Year ended March 31, 2023;

III. proper and sufficient care has been taken for the maintenance of adequate accounting records in

97 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;

IV. the annual accounts have been prepared on a

‘going concern basis;

V. proper internal financial controls laid down by the

Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

VI. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

21. AUDITORS AND AUDITORS REPORT

I. Statutory Auditors

The shareholders in the 20th AGM, approved the appointment of M/s. B S R & Associates LLP, Chartered Accountants (Firm Registration No. 116231W/W-100024), as the Statutory Auditors, for a period of five (5) years i.e. from the conclusion of the 20th AGM held on July 19, 2018 till the conclusion of 25th AGM of the Company.

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force).

The Auditors Report for the Financial Year ended March 31, 2023, does not contain any qualification, reservation or adverse remark. Further the Auditors Report being self-explanatory does not call for any further comments from the Board of Directors.

As the maximum "Statutory Tenure" of M/s. BSR & Associates LLP, Chartered Accountants, (Existing Statutory Auditors) to continue as auditors of the Company is about to end at the conclusion of forthcoming 25th Annual General Meeting (AGM), the Board of Director of the Company on the recommendation of Audit Committee, subject to approval of Shareholders of the Company, in their meeting held on May 14, 2023, appointed M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (ICAI Firm Registration No. 101049W/ E300004), as Statutory Auditors for a period of

5 (five) consecutive years commencing from the conclusion of the 25th Annual General Meeting till the conclusion of the 30th Annual General Meeting. The Board of Directors recommends the proposed appointment for the approval of Shareholders.

M/s. S.R. Batliboi & Associates LLP, have confirmed that they have not been disqualified to act as Statutory Auditors of the Company and that their appointment is within the maximum ceiling limit as prescribed under Section 141 of Companies Act, 2013/ relevant statute.

II. Maintenance of Cost Records and Cost Auditors

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

The Board of Directors on the basis of recommendations from Audit Committee has appointed M/s. Lavanya & Associates, Sole Proprietorship firm (Firm Reg. No: 101257), represented by K.V.N. Lavanya, Sole Proprietor (Membership No: 31069), as Cost Auditors of the Company for the Financial Year 2023-24 at a fee of H 2,00,000/- (Rupees Two Lakhs Only) plus applicable taxes and out of pocket expenses subject to the ratification of the said fees by the shareholders at the ensuing AGM.

The Cost Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force).

III. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. Ravi & Subramanyam Company Secretaries ("Secretarial Auditors") to conduct the Secretarial Audit of your Company for the Financial Year 2022-23.

The Secretarial Audit Report for the Financial Year ended March 31, 2023 is annexed herewith as Annexure- 3 and forms an integral part of this Annual Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Secretarial Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force).

22. ANNUAL RETURN

As required under Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the Companys website at https://www.rainbowhospitals.in/investor-relations/ reports/Draft-Annual-Return-FY-2022-23.pdf

23. RELATED PARTY TRANSACTIONS

In compliance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on Companys website at https://www.rainbowhospitals.in/investor-relations/ reports/policy/Policy%20on%20dealing%20with%20 Related%20Party%20Transactions.pdf

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its Related Parties. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions which are of repetitive nature and / or entered in the Ordinary Course of Business and are at Arms Length.

All related party transaction entered during the year were in Ordinary Course of the Business and on Arms Length basis. No Material Related Party Transaction, was entered during the year by your Company. 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.

24. LOANS AND INVESTMENTS

Details of Loans, Guarantees given and Investments made by the Company during Financial Year 2022-23 within the meaning of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Schedule V of the SEBI Listing Regulations, are set out in Note No. 2.2 and in Note No. 2.10 to the Standalone Financial Statements of the Company.

25. RISK MANAGEMENT

Your Company has a Risk Management Committee which monitors and reviews the risk management plan / process of your Company. The Company has adequate risk management procedures in place. The major risks are assessed through a systemic procedure of risk identification and classification. Risks are prioritised according to significance and likelihood.

The Risk Management Committee oversees the risk management processes with respect to all probable risks that the organization could face such as strategic, financial, liquidity, security including cyber security, regulatory, legal, reputational and other risks. The Committee ensures that there is a sound Risk Management Policy to address such risks. There are no elements of risk which in the opinion of the Board may threaten the existence of the Company.

The details of the Risk Management Committee are given in the Corporate Governance Report which forms integral part of this Annual Report.

26. WHISTLE BLOWER POLICY AND VIGIL MECHANISM

In Compliance with the provisions of section 177 of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations, the Company has in place the Whistle Blower Policy and Vigil Mechanism for Directors, employees and other stakeholders which provides a platform to them for raising their voice about any breach of code of conduct, financial irregularities, illegal or unethical practices, unethical behaviour, actual or suspected fraud. Adequate safeguards are provided against victimization to those who use such mechanism and direct access to the Chairman of the Audit Committee in appropriate cases is provided.

The policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination is made against any person. The Whistle Blower Policy and Vigil Mechanism may be accessed on the Companys website at https://www. rainbowhospitals.in/investor-relations/reports/policy/ Whistle_Blower_Policy.pdf

27. CORPORATE SOCIAL RESPONSIBILITY

The prime objective of our Corporate Social Responsibility policy is to hasten social, economic and environmental progress. We remain focused on generating systematic and sustainable improvement for local communities surrounding our Hospitals.

The Board of Directors of your Company has formulated and adopted a policy on Corporate Social Responsibility which can be accessed at: https://www. rainbowhospitals.in/investor-relations/reports/policy/ CSR_Policy.pdf

The annual report on corporate social responsibility activities containing composition of CSR committee and disclosure as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached and marked as Annexure – 4 and forms part of this report.

28. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report of financial performance and results of operations of the Company, as required under the SEBI Listing Regulations is provided in a separate section and forms an integral part of this report. It inter-alia gives details of the overall industry structure, economic developments, performance and state of affairs of your Companys business, risks and concerns and material developments during the financial year under review.

29. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report, as required under the SEBI Listing Regulations, describing the initiatives taken by the Company from environment, social and governance perspective is provided in a separate section and forms an integral part of this Report.

30. CORPORATE GOVERNANCE REPORT

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. Separate report on Corporate Governance, forms an integral part of this Annual Report.

A certificate from M/s. BS & Company Company Secretaries LLP, confirming compliance with the conditions of corporate governance is also attached to the Corporate Governance Report.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in compliance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee

(" ICC") as specified under the Sexual Harassment of

Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company conducts sessions for employees to build awareness amongst employees about the Policy and the provisions of Prevention of Sexual Harassment of Women at Workplace Act.

During the period under review, no complaint was received by the ICC.

32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is given below:

A. Energy Conservation:

The Company has continued its efforts to reduce its energy consumption year on year.

Some of the key measures taken by the Company are as below:

I. Energy conservation measures taken/ Utilizing alternate sources of energy:

• Building Management System (BMS) for efficient HVAC operations

• Usage of Energy efficient equipment at all levels.

• Upgrade/replacement of equipment like ACs, Lighting system etc

• Switching off ACs at unutilized areas and fixing AC temperatures at 23 degrees for nonclinical Areas;

• Insulations to AC units and supply line to avoid AC wastages

• Switching to LED light fixtures.

• Evaporative pre-cooling of air around the outdoor units.

• Solar Power pack installation initiative.

• Reduction in specific consumption for compressor by regular maintenance

• Reducing virtual energy consumption kVAh by repairing/installing capacitors.

• The outdoor units are serviced once in 15 days to keep them clean & maintain the heat exchange surfaces effective

• Efficient Chillers, DG sets, and Pumps have been installed for New Projects

• Variable Frequency Drives ("VFD") have been installed to conserve energy across Hospitals

• Installation of Motion sensors for auto switch off lighting system

• Installation of solar rooftops, solar water heaters and energy-saving heat pumps.

II. Impact of Measures:

The energy conservation measures taken from time to time by your Company have resulted in considerable reduction of energy and thereby reducing the cost.

III. Capital Investment on Energy conservation Equipment:

During the year under review, the Company has spent about H 19.78 Million as capital investment on various energy conservation initiatives like Solar Heating System, LED Lights Fixtures, Motion Sensors, Variable Frequency Drives, Heat Pumps and Solar roof tops.

B. Technology Absorption:

I. Technology Absorption, Adaptation & Innovation:

1) Efforts made towards technology absorption:

• Implementation of QR based facility management application to Digitalize the everyday functions of Engineering and Maintenance team with an overall objective to bring quantitative and qualitative benefits.

• Variable Frequency Drives (VFDs) have been used in Chillers and critical AHUs.

• Recirculation of treated water to reduce water wastage

• Solar rooftops and Eco-Friendly STPs

• Aerators to reduce water wastage

• Registration of all new projects for Green Building accreditations.

• Implementation of salesforce as the Customer Relationship Management (CRM) application

• Implementation of Palo Alto as the firewall system

2) Benefits derived as a result of the above efforts:

The Company achieved Operational cost reduction, resource optimization, Energy sources sustainability, Carbon emission reductions and improving the life span of Assets etc.

3) In case of imported technology (imported during the last three years reckoned from the beginning of the FY 2022-23): None

4) Expenditure incurred on Research and Development:

No expenditure was incurred on Research and Development by the Company during the period under review.

C. Foreign exchange earnings and outgo

S. No. Particulars Amount (In J Million)
1 Foreign Exchange Earnings 1.87
2 Foreign Exchange Outgo 55.28

33. INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

Your Company has in place an adequate internal financial control framework with reference to financial and operating controls thereby ensuring orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information and such controls are operating effectively.

During Financial Year 2022-23, such controls were tested and no reportable material weakness in the design or operation was observed.

The Directors have in the Directors Responsibility Statement confirmed the same to this effect.

34. DISCLOSURE RELATED TO INSOLVENCY AND BANKRUPTCY:

No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year is not applicable.

35. NO DIFFERENCE IN VALUATION:

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

36. SIGNIFICANT/ MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/ material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

37. COMPLIANCE OF SECRETARIAL STANDARDS

The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) and shareholders (SS-2).

38. ACKNOWLEDGEMENT & APPRECIATION

Your Directors express their sincere appreciation for the assistance and co-operation received from the

Government authorities, financial institutions, banks, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the employees.

For and on behalf of Board of Directors

Dr. Ramesh Kancharla

Chairman and Managing Director DIN: 00212270

Place: Hyderabad Date: May 14, 2023

ANNEXURE-2

Disclosures pertaining to remuneration under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ended March 31, 2023.

A. The ratio of the remuneration paid to each director during the year to the median remuneration of the employees of the Company for the Financial Year:

S. No. Name of the Director Category Ratio of Remuneration to the median remuneration of the employees
1. Dr. Ramesh Kancharla Chairman & Managing Director 230
2. Dr. Dinesh Kumar Chirla Whole-time Director 139*
3. Dr. Anil Dhawan Independent Director 7
4. Mr. Aluri Rao Srinivasa Independent Director 7
5. Ms. Sundari R. Pisupati Independent Director 6
6. Mr. Santanu Mukherjee Independent Director 7

* Includes Professional fee also

B. The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer and Company Secretary, in the Financial Year:

S. No. Name Designation % Increase in Remuneration in the Financial Year
1. Dr. Ramesh Kancharla Chairman & Managing Director Nil**
2. Dr. Dinesh Kumar Chirla Whole-time Director 15.96
3. Dr. Anil Dhawan Independent Director Nil
4. Mr. Aluri Srinivasa Rao Independent Director Nil
5. Ms. Sundari R. Pisupati Independent Director Nil
6. Mr. Santanu Mukherjee Independent Director Nil
7. Mr. R Gowrisankar Chief Financial Officer 25
8. Mr. Ashish Kapil Company Secretary & Compliance Officer 10

** Dr. Ramesh Kancharla received a total remuneration of INR 6,00,00,004/- in Financial Year 2022 and INR 6,75,73,984/- in Financial Year 2023. However, there is no increase in the remuneration of Dr. Ramesh Kancharla in the Financial Year 2023, the difference is on account of below reasons: a) In Financial Year 2022, Dr. Kancharla took a voluntary pay cut of INR 50,00,000/- ~ equivalent to one-month gross pay on account of Covid; and b) Dr. Kancharla received Leave Travel Allowance of INR 25,73,980/- in Financial Year 2023.

C. Percentage increase in the median remuneration of employees in the Financial Year:

The average percentage increase in the median remuneration of employees in the Financial Year is 7.3%.

D. Number of permanent employees on the rolls of the Company:

The number of permanent employees on the rolls of the Company as of March 31, 2023 is 3581.

E. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in the salaries of employees other than Managerial Personnel was 12.2%. The above table contain the details of remuneration paid to the managerial personnel. The remuneration paid to managerial personnel is basis prevailing market trends, Company Performance and overall responsibility matrix and the same is in line with the resolutions approved by the Board of Directors and/or Shareholders.

F. Affirmation that the remuneration is as per the Remuneration Policy of the Company:

It is hereby confirmed that the remuneration is as per the Nomination and Remuneration Policy of the Company.

For and on behalf of Board of Directors

Dr. Ramesh Kancharla

Chairman and Managing Director DIN: 00212270

Place: Hyderabad Date: May 14, 2023