You are here » Home » Companies » Company Overview » Fortis Malar Hospitals Ltd

Fortis Malar Hospitals Ltd.

BSE: 523696 Sector: Health care
NSE: N.A. ISIN Code: INE842B01015
BSE 10:51 | 08 Dec 58.40 1.05
(1.83%)
OPEN

57.25

HIGH

58.40

LOW

57.25

NSE 05:30 | 01 Jan Fortis Malar Hospitals Ltd
OPEN 57.25
PREVIOUS CLOSE 57.35
VOLUME 12
52-Week high 78.70
52-Week low 48.05
P/E
Mkt Cap.(Rs cr) 109
Buy Price 57.30
Buy Qty 6.00
Sell Price 58.40
Sell Qty 19.00
OPEN 57.25
CLOSE 57.35
VOLUME 12
52-Week high 78.70
52-Week low 48.05
P/E
Mkt Cap.(Rs cr) 109
Buy Price 57.30
Buy Qty 6.00
Sell Price 58.40
Sell Qty 19.00

Fortis Malar Hospitals Ltd. (FORTISMALAR) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 31st Annual Report of Fortis MalarHospitals Limited ("the Company") along with Audited Standalone and ConsolidatedFinancial Statements and Auditors' Report thereon for the year ended March 31 2022.

FINANCIAL RESULTS

The highlights of Consolidated and Standalone Financial performance of your Company areas follows:

(Rs in Lacs)

Consolidated
Particulars Year ended March 31 2022 Year ended March 31 2021
Revenue from Operations 8617.82 6924.41
Other Income 739.05 825.09
Total Income 9356.87 7749.50
Total Expenses 8274.03 7558.09
Profit before Finance Charges Taxes Depreciation & Amortisation (EBITDA) 1082.84 191.41
Less: Finance Charges Depreciation & Amortisation 1908.97 2007.42
Profit / (Loss) before exceptional item and tax (826.13) (1816.01)
Exceptional items - 684.85
Profit / (Loss) before tax (826.13) (1131.16)
Less: Tax Expenses 1.22 (344.29)
Profit / (Loss) for the year (827.35) (786.87)
Other Comprehensive Income (Net of Taxes) (33.96) 20.39
Total Comprehensive Loss for the year (861.31) (766.48)

(Rs in Lacs)

Standalone
Particulars Year ended March 31 2022 Year ended March 31 2021
Revenue from Operations 8617.82 6924.41
Other Income 733.32 808.12
Total Income 9351.14 7732.53
Total Expenses 8272.72 7556.62
Profit before Finance Charges Taxes Depreciation & Amortisation (EBITDA) 1078.42 175.91
Less: Finance Charges Depreciation & Amortisation 1908.97 2007.42
Profit / (Loss) before exceptional item and tax (830.55) (1831.51)
Exceptional items - 684.85
Profit / (Loss) before tax (830.55) (1146.66)
Less: Tax Expenses - (345.33)
Profit / (Loss) for the year (830.55) (801.33)
Other Comprehensive Income (Net of Taxes) (34.03) 20.33
Total Comprehensive Loss for the year (864.58) (781.00)

STATE OF COMPANY'S AFFAIR OPERATING RESULTS AND PROFITS

Fortis Malar Hospital (formerly known as Malar Hospital) was acquired by Fortis Groupin early 2008. The hospital founded in 1989 has established itself as one of the largestcorporate hospitals in Chennai providing quality super specialty and multi-specialityhealthcare services. With a total bed-strength of 160 including 40 ICU/CCU/RTU beds thehospital focuses on providing comprehensive medical care in the areas of Cardiology andCardiac Surgery Neuro Surgery Gynaecology Orthopedics Gastroenterology NeurologyPediatrics Diabetics Nephrology and Internal Medicine.

Fortis Malar Hospital has a state of the art Cath Lab and multiple dedicated cardiacoperation theatres and intensive coronary care units. Several rare and complex Adult andPediatric Cardiac surgeries Orthopedic and Joint replacements Neurosurgeries andPlastic reconstruction surgeries have been performed at this hospital. The hospital'sObstetrics and Gynaecology services are among the busiest in the city successfullyperforming many complicated deliveries and surgeries. They are supported by a dedicatedNeonatology unit.

The financial year under review continued to pose a challenge due to Covid lockdown.The COVID-19 pandemic played a role in reducing footfalls and occupancy remained low inthe first quarter. By the second quarter the occupancy had improved to 31.9%. Overall wehad treated 5622 COVID patients in the out-patient department and 1453 COVID admissionswere recorded till March 31 2022 with a success rate of 96%.

The hospital also participated in the community vaccination drive and had completedaround 14092 plus vaccinations

SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW

OPEN OFFER

Pursuant to execution of Share Subscription Agreement dated July 13 2018("SSA") Northern TK Venture Pte Limited ("NTK" or the"Acquirer") a wholly owned subsidiary of IHH Berhard subscribed to 235294117 new equity shares of Fortis Healthcare Limited ("FHL") with a face value of H10 each ("Subscription Shares") constituting approximately 31.1% of the totalvoting equity share capital of FHL on a fully diluted basis ("Expanded Voting ShareCapital") for a total consideration of H 4000 Crores and FHL issued and allottedSubscription Shares by way of preferential allotment in accordance with the terms of SSA("Subscription"). As a consequence of Subscription the Acquirer together withIHH Healthcare Berhad ("PAC 1") and Parkway Pantai Limited ("PAC 2")(collectively referred to as the "PACs") made a mandatory open offer by filinga public announcement dated July 13 2018. Subscription was completed in accordance withthe terms of SSA on November 13 2018 and NTK became the controlling shareholder of FHL.

As a consequence of Subscription NTK was required to carry out the following:

(i) A mandatory open offer for acquisition of up to 197025660 equity shares of facevalue of H 10 each in FHL representing additional 26% the Expanded Voting Share Capitalof FHL at a price of not less than H 170 per share ("Fortis Open Offer") orsuch higher price as required under the Securities and Exchange Board of India("SEBI") (Substantial Acquisition of Shares and Takeovers) Regulations 2011("SEBI (SAST) Regulations"); and

(ii) In light of the acquisition of the controlling stake of FHL a mandatory openoffer for acquisition of up to 4894308 fully paid up equity shares of face value of H 10each in Fortis Malar Hospitals Limited ("Malar") representing 26% of thepaid-up equity shares of Malar at a price of H 60.10 per share ("Malar OpenOffer"). Malar Open Offer is subject to the completion of the Fortis Open Offer.

On December 14 2018 Hon'ble Supreme Court of India passed an order in the matter of"Mr. Vinay Prakash Singh v. Sameer Gehlaut & Ors." directing "statusquo with regard to sale of the controlling stake in Fortis Healthcare to Malaysian IHHHealthcare Berhad be maintained" ("Order"). Pursuant thereto decision wastaken not to proceed with Fortis Open Offer and Malar Open Offer until further order(s) /clarification(s) / direction(s) are issued by the Hon'ble Supreme Court of India. On May12 2021 the hearings in the Supreme Court have been concluded and the judgement/orderhas been reserved. As on the date of this report there was no further update.

RECLASSIFICATION OF PROMOTERS

The Company received a request letter ("FHsL Letter") from Fortis HospitalsLimited ("FHsL") (immediate holding company and one of the Promoters) statingthat FHsL is a wholly owned subsidiary of Fortis Healthcare Limited ("FHL") andFHL vide its letter FHL/ SEC/2019-20 dated June 03 2019 captioned "Reclassificationof Promoters" intimated to stock exchanges [viz. BSE Limited ("BSE") andNational Stock Exchange of India Limited ("NSE")] regarding the approval grantedby the stock exchanges viz. BSE & NSE for reclassification of the following promotersas public shareholders: Malvinder Mohan Singh -Trust Harpal Singh Abhishek SinghMalvinder Mohan Singh Shivinder Mohan Singh Fortis Healthcare Holdings Private LimitedMalav Holdings Private Limited RHC Holding Private Limited ("Erstwhile Promoters ofFHL") and that the only remaining promoter of FHL is Northern TK Venture Pte. Limited("NTK"). Further Securities and Exchange Board of India ("SEBI") hadon October 17 2018 December 21 2018 March 19 2019 and June 28 2019 ("SEBIOrders") directed that Mr. Malvinder Mohan Singh and Mr. Shivinder Mohan Singh shallnot associate themselves with the affairs of FHL and FHsL in any manner whatsoever tillfurther directions. FHsL being Promoter and largest shareholder of the Company isholding 1 1752402 equity shares representing 62.71% stake in the Company. Further otherthan FHsL following entities were Promoter / Promoter Group Companies ("IdentifiedPromoter / Promoter Group") of the Company:

Sl. Name PAN Number of shares held on March 31 2021
1 PS Trust (Acting and Represented by its trustees Mr. Malvinder Mohan Singh and Dr. Shivinder Mohan Singh) AACTP6651N 100
2 Fortis Healthcare Holdings Private Limited AAACF6715A 100
3 Oscar Investments Limited AAACO1722C 0
4 Shivi Holdings (P) Limited AAACO2664H 100
5 RHC Finance Private Limited AAACW7196C 100
6 Todays Holdings Private Limited AACCT7136K 100
7 Malav Holdings Private Limited AADCM1170B 0
8 RHC Holding Private Limited AAKCS7686P 0

In view of the letter received from FHsL and the facts stated herein above the Boardconsidered the same and empowered certain officials to issue letters to IdentifiedPromoter / Promoter Group for intimating the decision of the Company with respect toreclassification of status of said members as public shareholders. Identified Promotersdid not respond to the letters and emails sent by the Company on August 5 2019 seekingtheir respective consent with respect to their reclassification. Therefore the Boardaccorded its approval for proceeding with reclassification of said Identified Promotersand the said proposal was also approved by the shareholders of the Company. The Companymade an application with said effect with BSE Limited for its approval.

BSE informed the Company vide its email dated January 21 2021 to file an applicationfor reclassification of promoters with SEBI under regulation 102 of LODR Regulations.Accordingly Company has submitted application for reclassification of promoters withSEBI. Further SEBI has granted exemption vide letter no.SEBI/HO/CFD/CMD1/OW/2021/2489/1/M dated March 23 2021 from the applicability of theprocedural requirements specified at Regulation 31A(3)(a)(i) and 31A(8)(a) and (b) of SEBILODR. Further the Company was advised to ensure compliance with all other provisions ofRegulation 31 A of the LODR Regulations for reclassification of promoters. Thereafter BSEvide its letter no. LIST/COMP/MI/002/2021-22 dated June 24 2021 approved reclassificationof Identified Promoter from Promoter category to public category. As on date of thereport your Company has only one promoter i.e. Fortis Hospitals Limited.

OPERATIONAL AND FINANCIAL PERFORMANCE

Your Company achieved a consolidated total income of ? 93.57 Crores during the currentyear as against ? 77.49 Crores in the corresponding financial year ended March 31 2021.EBITDA for the year stood at ? 10.83 Crore compared to ? 1.91 Crore for the previouscorresponding year. The Profit / (Loss) before exceptional and tax for the period stood at? (8.26) Crores as against ? (18.16) Crores during the corresponding year. The Profit /(Loss) before tax for the period stood at ? (8.26) Crores as against ? (11.31) Croresduring the corresponding year. Profit / (Loss) for the year stood at ? (8.27) Crores inthe current financial year compared to ? (7.87) Crores in the previous year.

Regarding the key performance indicators the Company's average revenue per occupiedbed (ARPOB) for the current year stood at ? 163 Lacs as against ? 144 Lacs in the previousyear. The average length of stay (ALOS) was at 4.29 days in Financial Year 2021-22compared to 5.27 days in Financial Year 202021. Occupancy of the hospital during the yearwas at 39% as compared to 36% in the previous year.

DIVIDEND AND TRANSFER TO RESERVES

Considering the losses occurred during the financial year the Board of Directors ofyour Company has not recommended any dividend for the FY 2021-22. Accordingly there hasbeen no transfer to General Reserves.

LOANS / ADVANCES / INVESTMENTS / GUARANTEES

Particulars of loans / advances / investments / guarantees given and outstanding duringFY 2021-22 are mentioned in notes to financial statements.

PUBLIC DEPOSITS

During the year under review your Company has not invited or accepted any depositsfrom the public pursuant to the provisions of Section 73 of the Companies Act 2013 readwith the Companies (Acceptance of Deposit) Rules 2014.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of yourCompany which have occurred between the end of FY 2021-22 and date of this report.

DETAILS OF SUBSIDIARY

During the year under review your Company has only one subsidiary Company i.e. MalarStars Medicare Limited. Main object of the said wholly-owned subsidiary company includesetting up managing / administering hospital(s) and to provide Medicare and Healthcareservices.

The Board of Directors has adopted a policy for determining "materialsubsidiary" pursuant to Regulation 16(1 )(c) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The said policy is available at https://www.fortismalar.com/investor-relations/investorcatdetails/policies- other-documents1

Basis the Consolidated Audited Financial Statements of the Company for FY 2021-22 yourCompany has no "material subsidiary" in terms of the said policy and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY

Consolidated financial statements of your Company and its subsidiary prepared inaccordance with applicable Indian Accounting Standards as per the Companies (IndianAccounting Standards) Rules 2015 notified under Section 133 of the Companies Act 2013forms part of the Annual Report. In terms of Section 136 of the Companies Act 2013financial statements of the subsidiary company will be provided to any shareholder of theCompany who asks for it and said Financial Statements will also be kept open forinspection at the registered office of the Company and that of subsidiary. Performance andfinancial position along with contribution of the subsidiary to the overall performance ofyour Company which also included in the Consolidated Financial Statements of the Companyis mentioned below: -

.