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Fortis Malar Hospitals Ltd.

BSE: 523696 Sector: Health care
NSE: N.A. ISIN Code: INE842B01015
BSE 00:00 | 22 Sep 65.00 -0.65
(-0.99%)
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NSE 05:30 | 01 Jan Fortis Malar Hospitals Ltd
OPEN 65.80
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VOLUME 1769
52-Week high 76.00
52-Week low 47.05
P/E
Mkt Cap.(Rs cr) 122
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 65.80
CLOSE 65.65
VOLUME 1769
52-Week high 76.00
52-Week low 47.05
P/E
Mkt Cap.(Rs cr) 122
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Fortis Malar Hospitals Ltd. (FORTISMALAR) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting their 30th Annual Report ofFortis Malar Hospitals Limited ("the Company") along with Audited Standalone andConsolidated Financial Statement and Auditors' Report thereon for the Year ended March 312021.

FINANCIAL RESULTS

The highlights of Consolidated and Standalone Financial Summary of your Company are asfollows:

Particulars Consolidated
Year ended March 31 2021 Year ended March 31 2020
Revenue from Operations 6924.41 11187.20
Other Income 825.09 1118.58
Total Income 7749.50 12305.78
Total Expenses 7558.09 11465.38
Profit before Finance Charges Taxes Depreciation & Amortisation (EBITDA) 191.41 840.40
Less: Finance Charges Depreciation & Amortisation 2007.42 2033.90
Profit / (Loss) before exceptional item and tax (1816.01) (1193.50)
Exceptional items 684.85 0.00
Profit / (Loss) before tax (1131.16) (1193.50)
Less: Tax Expenses (344.29) (304.14)
Profit / (Loss) for the year (786.87) (889.36)
Other Comprehensive Income (Net of Taxes) 20.39 (7.32)
Total Comprehensive Loss for the year (766.48) (896.68)
`
Particulars Standalone
Year ended March 31 2021 Year ended March 31 2020
Revenue from Operations 6924.41 11187.20
Other Income 808.12 1092.34
Total Income 7732.53 12279.54
Total Expenses 7556.62 11461.21
Profit before Finance Charges Taxes Depreciation & Amortisation (EBITDA) 175.91 818.33
Less: Finance Charges Depreciation & Amortisation 2007.42 2033.90
Profit / (Loss) before exceptional item and tax (1831.51) (1215.57)
Exceptional items 684.85 0.00
Profit / (Loss) before tax (1146.66) (1215.57)
Less: Tax Expenses (345.33) (309.88)
Profit / (Loss) for the year (801.33) (905.69)
Other Comprehensive Income (Net of Taxes) 20.33 (11.16)
Total Comprehensive Loss for the year (781.00) (916.85)

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 170 including 50 ICU beds the hospitalfocuses on providing comprehensive medical care in the areas of Cardiology and CardiacSurgery Neuro Surgery Gynaecology Orthopedics Gastroenterology Neurology PediatricsDiabetics 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 company entered the financial year on the back of exits of key clinicians theprevious year. The first quarter saw extremely low occupancy due to the Governmentmandated lockdown. By end of June we started admitting Covid-19 patients and the end ofthe year the company had treated more than 650 Covid patients with more than 96% successrate. Occupancy peaked to a high of 54% in October when Covid was at its peak. Covidoccupancy came to almost negligible levels by mid-February – but by March 15 2021the second wave of Covid infections had started. During this entire time the fear ofgetting infected while visiting a hospital took hold of all patients – Non-CovidOut-patient footfalls dropped by 30% while elective surgeries were being postponed. As aresult the overall business saw a dip as compared to the previous year.

SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW OPEN OFFER

Pursuant to execution of Share Subscription Agreement on July 13 2018("SSA") Northern TK Venture Pte Limited ("NTK" or the"Acquirer") a wholly owned subsidiary of IHH Berhard subscribed to 235294117new equity shares of Fortis Healthcare Limited ("FHL") with a face value of _ 10each ("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 _ 4000 Crores and FHL issued and allotted theSubscription Shares by way of preferential allotment in accordance with the terms of theSSA ("Subscription"). As a consequence of the Subscription the Acquirertogether with IHH Healthcare Berhad ("PAC 1") and Parkway Pantai Limited("PAC 2") (collectively referred to as the "PACs") made a mandatoryopen offer by filing a public announcement dated July 13 2018. The Subscription wascompleted in accordance with the terms of the SSA on November 13 2018 and NTK became thecontrolling shareholder of FHL.

As a consequence of the 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 _ 10 each in FHL representing additional 26% of the Expanded Voting ShareCapital of FHL at a price of not less than _ 170 per share ("Fortis OpenOffer") or such higher price as required under the Securities and Exchange Board ofIndia ("SEBI") (Substantial Acquisition of Shares and Takeovers) Regulations2011 ("SEBI (SAST) Regulations"); and (ii) In light of the acquisition of thecontrolling stake of FHL a mandatory open offer for acquisition of up to 4894308 fullypaid up equity shares of face value of _ 10 each in Fortis Malar Hospitals Limited("Malar") representing 26% of the paid-up equity shares of Malar at a price of_ 60.10 per share ("Malar Open Offer"). The Malar Open Offer is subject to thecompletion 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 the Fortis Open Offer and Malar Open Offer until furtherorder(s) / clarification(s) / direction(s) are issued by the Hon'ble Supreme Court ofIndia. As of May 12 2021 the hearings in the Supreme Court have been concluded and thejudgement/order has been reserved.

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 11752402 equity shares representing 62.71% stake in the Company. Further otherthan FHsL following entities are Promoter / Promoter Group Companies ("IdentifiedPromoter / Promoter Group") of the Company:

Sl. No. Name PAN Number of shares held on March 31 2021
1 PS Trust (Acting and Represented by its trustees Mr. Malvinder AACTP6651N 100
Mohan Singh and Dr. Shivinder Mohan Singh)
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 theCompany vide its email dated January 21 2021 to file an application for reclassificationof promoters with SEBI under regulation 102 of LODR Regulations. Accordingly Company hassubmitted application for reclassification of promoters with SEBI. Further SEBI hasgranted exemption vide letter no. SEBI/HO/CFD/CMD1/OW/2021/2489/1/M dated March 23 2021from the applicability of the procedural requirements specified at Regulation 31A(3)(a)(i)and 31A(8)(a) and

(b) of SEBI LODR. Further the Company has been advised to ensure compliance with allother provisions of regulation 31 A of the LODR Regulations for reclassification ofpromoters. As on date of this Board Report matter is pending before BSE.

OPERATIONAL AND FINANCIAL PERFORMANCE

Your company achieved a consolidated total income of _ 77.49 Crores during the currentyear as against _ 123.06 Crores in the corresponding financial year ended March 31 2020.EBITDA for the year stood at _ 1.91 Crore compared to _ 8.40 Crore for the previouscorresponding year. The Profit / (Loss) before exceptional and tax for the period stood at_ (18.16) Crores as against _ (11.93) Crores during the corresponding year. The Profit /(Loss) before tax for the period stood at _ (11.31) Crores as against _ (11.93) Croresduring the corresponding year. Profit / (Loss) for the year stood at _ (7.87) Crores inthe current financial year compared to _ (8.89) Crores in the previous year.

Regarding the key performance indicators the Company's average revenue per occupiedbed (ARPOB) for the current year stood at _ 144 Lakhs as against _ 171 Lakhs in theprevious year. The average length of stay (ALOS) was at 5.27 days in Financial Year2020-21 compared to 4.02 days in Financial Year 2019-20. Occupancy of the hospital duringthe year was at 36% as compared to 48% in the previous year. There has been no change inthe nature of business of the Company during the year under review.

DIVIDEND AND TRANSFER TO RESERVES

The Board of Directors of your Company has not recommended any dividend for the FY2020-21. Accordingly there has been no transfer to General Reserves.

LOANS / ADVANCES / INVESTMENTS / GUARANTEES

Particulars of Loans / Advances / Investments / Guarantees given & outstandingduring FY 2020-21 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 Companies (Acceptance of Deposit) Rules 2014.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN THE END OF FY 2020-21 AND THE DATE OF THE REPORT

There are no material changes and commitments affecting the financial position of yourCompany which have occurred between the end of FY 2020-21 and date of the report.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportable materialweakness in the design or operation was observed.

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.

Further note that the Board of Directors has adopted a policy for determining"material subsidiary" pursuant to Regulation 16(1)(c) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The said policy is availableat https://www.fortismalar.com/investor-relations/investorcatdetails/policies-other-documents1 Basis the ConsolidatedAudited Annual Accounts of the Company for FY 2020-21 your Company has no "materialsubsidiary" in terms of the said policy and SEBI (Listing Obligations and DisclosureRequirements) 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 annual accounts will also be kept open for inspection atthe registered office of the Company and that of subsidiary. Performance and financialposition along with contribution of the subsidiary to the overall performance of yourCompany which also included in the Consolidated Financial Statements of the Company ismentioned below: -

C K Nageswaran

Whole Time Director

DIN 08236347

Sandeep Singh

Company Secretary & Compliance Officer

Membership No. F9877

For and on behalf of the Board of Directors of

Fortis Malar Hospitals Limited

Daljit Singh

Chairman

DIN 00135414

Yogendra Kumar Kabra

Chief Financial Officer

CORPORATE SOCIAL RESPONSIBILITY

–JOURNEY THROUGH THE YEAR (2020-21)

As a responsible corporate citizen and a member of the Indian healthcare ecosystemyour Company strongly believe that we can meaningfully alleviate the problem ofinequitable access to quality healthcare. By creating and supporting social sectorprogrammes linked to health and well-being we seek to leverage our skills experiencecapabilities technologies and facilities to address a critical social need for thevulnerable sections of society. We have continuously enabled programmes and initiativesbased on rigorous needs assessment leading creating social awareness and change in thecommunities.

The CSR initiatives of your Company are focussed on contributing to need based programthrough Trust / NGO / Society focussed on need-based programs for the community. The CSRactivities are carried out in a collaborative and inclusive manner not only to align andsynergise the social enterprise work of the group companies but also to expand theircircle of partnerships with Government Non-Government Organisations (NGOs) othercorporates and individuals. However during the Financial Year under review your Companydid not have any obligation to make CSR contribution hence no initiatives have beentaken during the year.

The details of particulars pursuant to Section 134(3)(o) of the Companies Act 2013read with rule 9 of the Companies (CSR) Rules 2014 is given in ‘Annexure - V'forming part of this report.

DIRECTORS & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Dr. Nithya Ramamurthy Director is liable to retire byrotation at the ensuing Annual General Meeting and has offered herself for re-appointment.On the recommendation from Nomination & Remuneration Committee the Board hasrecommended her re-appointment as a director liable to retire by rotation. As requiredunder Regulation 36 of SEBI LODR and Secretarial Standard information or details of Dr.Nithya Ramamurthy are provided in the Notice convening the ensuing Annual General Meeting.

During the period under review the Board of Directors has appointed Ms. ShailajaChandra as non-executive Independent Director on the Board of the Company w.e.f. March 102021 for a period of 5 years. Ms. Shailaja Chandra being above 75 years of age herappointment was also approved by the shareholders of the Company by way of SpecialResolution through postal ballot.

Further during the period under review the Board has appointed Mr. Mayank Jain asCompany Secretary of the Company w.e.f. April 3 2020 and Mr. Yogendra Kumar Kabraas Chief Financial Officer w.e.f. June 13 2020.

During the period under review Mr. Murai Pejaver Independent Director resigned fromthe office of Independent Director of the Company with effect from January 18 2021 Mr.Shashak Porwal resigned from the office of Company Secretary of the Company w.e.f. April3 2020 Mr. Saravanan Venkatesan resigned from the position of Chief Financial Officerw.e.f. closing hours of June 12 2020 and Mr. Mayank Jain has resigned from theoffice of Company Secretary of the Company w.e.f. closing hours of March 31 2021. TheCompany has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and the SEBI (Listing Agreement and Disclosure Requirements)Regulations 2015.

Post closure of Financial Year 2020-21 your Company has appointed Mr. Sandeep Singh asCompany Secretary and Compliance Officer of the Company and designated him as KeyManagerial Personnel of the Company w.e.f. May 25 2021.

There is no inter-se relationship between the Board Members.

As on the date of the report Mr. C K Nageswaran Whole-time Director Mr. YogendraKumar Kabra Chief Financial Officer and Mr. Sandeep Singh Company Secretary &Compliance Officer are the Key Managerial Personnel of the Company.

During FY 2020-21 seven meetings were held by the Board of Directors. The details ofboard / committee meetings and the attendance of Directors are provided in the CorporateGovernance Report forming part of the Annual Report.

Disclosures regarding the following are also mentioned in report on CorporateGovernance:

1. Composition of Committee(s) of the Board of Directors and other details;

2. Details of establishment of Vigil Mechanism;

3. Details of remuneration paid to all the Directors including Stock Options; and

4. Commission received by Whole Time Director if any.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board and the respective committees arerequired to carry out performance evaluation of the Board as a body the Directorsindividually Chairman as well as that of its Committees.

The Board of Directors of your Company in order to give objectivity to the evaluationprocess identified an independent third party for conducting board evaluation exercise forthis financial year.

The following process of evaluation was approved by the Nomination and RemunerationCommittee and the Board of Directors:

S. No. Process Remarks Criteria for Evaluation (including Independent Directors)
1. Kick Off Board Evaluation Program The Chairperson kick starts the process. Appointed and designated independent external agency as Process Coordinator -
2. Evaluation forms and One to One discussion Process Coordinator interacted with the Board members to assess performance invite direct feedback and seek inputs to identify opportunities for improvement. ProcessCoordinatorcirculatedthefeedbackquestionnaire to the board members and invited feedback from individuals after collecting the key findings one to one discussions were conducted to seek further clarity. This includes Board focus (Strategic inputs) Board Meeting Management KPI's suggestions to improve Board performance Board Effectiveness Management Engagement governance risk management and addressing of follow up requests.
3. Evaluation by the Board and of Independent Directors A compilation of the individual self-assessments and one to one discussions were placed at the meetings of the Independent Director's (ID's) and the Board of Directors (BoD) for them to review collectively. This includes demonstration of integrity commitment attendance at the meetings contribution and participation professionalism contribution while developing Annual Operating Plans demonstration of roles and responsibilities review of high risk issues & grievance redressed mechanism succession planning working of Board Committees etc.
4. Final recording and reporting Based on the above a final report on Board Evaluation 2020-21 was presented at a meeting of the Board of Directors. NA

MANAGERIAL REMUNERATION

Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are as under: -a) Comparison and ratio of the remuneration ofeach director to the median remuneration of the employees of the Company for FY 2020-21

Name of the Director* Remuneration of Director Median Remuneration of employees Ratio
Mr. C. K. Nageswaran 4851385 330000 1:15

b) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any during the financial yearunder review

Name of Director / KMP Designation % increase in Remuneration
Mr. C K Nageswaran Whole Time Director 0%
Mr. Saravanan Venkatesan1 Chief Financial NA
Officer
Mr. Yogendra Kumar Kabra2 Chief Financial NA
Officer
Mr. Mayank Jain3 Company Secretary NA
& Compliance Officer
1. Resigned w.e.f. closing hours of June 12 2020.
2. Appointed w.e.f. June 13 2020.
3. Appointed w.e.f. April 3 2020 and resigned w.e.f. closing hours of March 31 2021.
c) The percentage increase in the median remuneration of employees in FY 2020-21 is 3% (14% in the last year)
d) The number of permanent employees on the rolls of Company is 454 as on March 31 2021.
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 any exceptional circumstances for increase in the managerial remuneration
Particulars For FY 2020-21
(A) Average percentile increases already made in the salaries of employees other than the managerial personnel 0%
(B) Percentile increases in the managerial remuneration 0%
Comparison of (A) and (B) 0%
Justification NA
Any exceptional circumstances for increase in the managerial remuneration NA

f) Salary details along with the variable component and other benefits of theremuneration being paid to directors are detailed below:

Name of the Director* Salary Allowances & Perquisites Performance Incentives Retiral Benefits

Service Contract (As Whole Time Director)

Tenure Notice Period
Mr. C K Nageswaran 4851385 579262 324396 3 years w.e.f. 3 Months
October 02 2018

* None of the other Directors was paid any remuneration except sitting fees and thefees paid for services rendered in the professional capacity.

g) Remuneration has been paid to Directors and KMPs as per Board GovernanceDocument / the Remuneration Policy of the Company;

Remuneration Policy:

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a remuneration policy for selection and appointment of Directors Senior Managementand their remuneration including criteria for determining qualifications positiveattributes independence of a Director etc. and the same is also available on the websiteof the Company at the linkhttps://www.fortismalar.com/investor-relations/investorcatdetails/policies-other-documents1.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the CompaniesAct 2013 the Board Report and Accounts are being sent to the Members and others entitledthereto excluding the information on employees' particulars which is available forinspection by the Members at the Registered Office and / or Corporate Office of theCompany during business hours between 10.00 am to 12.00 noon on working days (ExceptSaturday) of the Company up to the date of the ensuing Annual General Meeting. If anyMember is interested in obtaining a copy thereof such Member may write to the CompanySecretary in this regard.

RELATED PARTY TRANSACTIONS

There were a few significant Related Party Transactions made by the Company withrelated parties. Disclosures as required under Section 134(3)(h) read with Rule 8(2) ofthe Companies (Accounts) Rules 2014 are given in "Annexure VI" in FormAOC-2 as specified under the Companies Act 2013.

All Related Party Transactions were placed before the Audit and Risk ManagementCommittee for approval as required under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Prior omnibus approval of the Audit and Risk ManagementCommittee was obtained for the transactions which were of foreseeable and repetitivenature. The transactions entered into pursuant to such omnibus approval so granted areaudited and a statement giving details of all related party transactions was placed beforethe Audit and Risk Management Committee on a quarterly basis.

The Company has developed a Related Party Transactions Policy / Framework and StandardOperating Procedures for the purpose of identification and monitoring of suchtransactions. The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website and the same is available at the link:https://www.fortismalar.com/frontend/investorrelations/Related-Party-Transactions-Framework-Document-1557140823.pdf.

None of the Directors has any pecuniary relationship or transaction vis--vis theCompany except to the extent of sitting fees and the fees paid for services rendered inthe professional capacity and remuneration approved by the Board of Directors and asdisclosed in this Annual Report.

RISK MANAGEMENT POLICY

The Company has designed a risk management policy and framework for riskidentification assessment mitigation plan development and monitoring of action tomitigate the risks. The key objective of the Enterprise Risk Management ("ERM")policy is to provide a formalised framework to enable judicious allocation of resources onthe critical areas which can adversely impact the Company's ability to achieve itsobjectives. The policy is applicable to the Company and its subsidiaries. This frameworkenables the management to develop and sustain a risk-conscious culture wherein there isa high degree of organisation-wide awareness and understanding of external and internalrisks associated with the business. The policy defines an architecture and oversightstructure to assist effective implementation. By clearly defining terms and outliningroles and responsibilities ERM promotes risk ownership accountability self-assessmentand continuous improvement to minimise adverse impact on achievement of businessobjectives and enhance the Company's competitive advantage. The details thereof arecovered under the Management and Discussion Analysis Report which forms part of the AnnualReport.

POLICY FOR PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT

Your Company has adopted a Policy for Prevention Prohibition and Redressal of sexualharassment. We have not received any complaint during the FY under review relating tosexual harassment hence there was no complaint pending as on March 31 2021. TheCompany has complied with provisions relating to the constitution of Internal ComplaintsCommittee under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The same may also be read in terms of Companies (Accounts) Rules2014.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 forms part of the Annual Report.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greatest emphasis on managing its affairs withdiligence transparency responsibility and accountability. Your Company is committed toadopting and adhering to the best Corporate Governance practices recognised globally. YourCompany understands and respects its fiduciary role and responsibility towardsstakeholders and the society at large and strives hard to serve their interests resultingin creation of value and wealth for all stakeholders at all times.

The report of Board of Directors of the Company on Corporate Governance is given in thesection titled "Report on Corporate Governance" forming part of this AnnualReport.

Certificate of M/s. Mukesh Agarwal & Co. Company Secretary in Whole-time Practiceregarding compliance with the Corporate Governance requirements as stipulated in Clause ESchedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isannexed with the Corporate Governance Report.

CODE OF CONDUCT

Declaration by Mr. C K Nageswaran Whole-time Director confirming compliance with the‘Code of Conduct' is enclosed with Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013: a) in the preparation of the annual accountsfor the year ended March 31 2021 the applicable accounting standards has been followedalong with proper explanation relating to material departures; b) the directors hadselected such accounting policies and applied them consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company for financial year ended March 31 2021 and of the loss of theCompany for the said period; c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) the directors had prepared the annual accounts on a going concernbasis; e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and f) the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the Central Government StateGovernments and all other Government agencies for the assistance co-operation andencouragement they have extended to the Company.

Your Directors also take this opportunity to extend a special thanks to the medicalfraternity and patients for their continued cooperation patronage and trust reposed inthe Company. Your Directors also greatly appreciate the commitment and dedication of allthe employees at all levels that has contributed to the growth and success of theCompany. Your Directors also thank all the strategic partners business associates Banksfinancial institutions and our shareholders for their assistance co-operation andencouragement to the Company during the year.

By the Order of the Board
For Fortis Malar Hospitals Limited
Date: May 25 2021 Daljit Singh
Place: Gurugram Chairman

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