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Shalby Ltd.

BSE: 540797 Sector: Health care
NSE: SHALBY ISIN Code: INE597J01018
BSE 16:00 | 07 May 136.50 2.20
(1.64%)
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137.50

HIGH

141.80

LOW

135.00

NSE 15:59 | 07 May 136.35 1.50
(1.11%)
OPEN

139.00

HIGH

142.00

LOW

134.85

OPEN 137.50
PREVIOUS CLOSE 134.30
VOLUME 88282
52-Week high 141.80
52-Week low 58.65
P/E 34.38
Mkt Cap.(Rs cr) 1,474
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 137.50
CLOSE 134.30
VOLUME 88282
52-Week high 141.80
52-Week low 58.65
P/E 34.38
Mkt Cap.(Rs cr) 1,474
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shalby Ltd. (SHALBY) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Sixteenth Annual Report on business andoperations of the Company along with audited financial statements for the financial yearended March 31 2020.

FINANCIAL PERFORMANCE SUMMARY

The summarized financial highlights are depicted below:

[Rs. in million]

Particulars Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
Revenue from operations 4838.86 4624.11 4868.50 4622.56
Other Income 177.42 93.68 173.71 92.59
Total Expenditure (Except Finance cost & Depreciation/
4023.80 3799.82 4051.17 3798.76
Amortization)
Profit before Interest Depreciation and Tax 992.48 917.97 991.05 916.39
Finance Cost 63.58 80.68 63.58 80.78
Depreciation/Amortization 358.61 330.04 360.20 331.73
Profit Before Tax 570.29 507.25 567.27 503.88
Provision for Taxation (Inclusive of provision for deferred tax) 290.57 186.23 291.41 187.34
Profit After Tax 279.72 321.01 275.86 316.54
Other comprehensive income 0.17 0.73 0.17 0.74
Total Comprehensive Income 279.89 321.74 276.03 317.28
Opening Balance In Retained Earnings 2364.78 2042.64 2213.19 1895.84
Add: Profit for the year including OCI 279.89 322.14 276.03 317.35
Less: Dividend including DDT 65.10 - 65.10 -
Amount available for appropriation 2579.56 2364.78 2424.12 2213.19

PERFORMANCE OF THE COMPANY

During the year under review the revenue from operations of the Company increased toRs. 4838.86 million as compared to Rs. 4624.11 million in the previous year registeringa growth of 4.64%. The EBITDA for the year under review increased to Rs. 992.48 millionagainst previous year of Rs. 917.97 million registering growth of 8.12%. Your Company hasearned profit after tax of Rs. 279.72 million as against Rs. 321.01 million in theprevious year.

During the year under review the consolidated revenue from operations increased to Rs.4868.50 million as compared to Rs. 4622.56 million in the previous year registering agrowth of 5.32%. The consolidated EBITDA exhibited a growth of 8.15% in Fiscal 2020 risingto Rs. 991.05 million from Rs. 916.39 million in the previous financial year.

Consolidated Profit Margins:

Profit before tax (PBT) for Fiscal 2020 increased to Rs. 567.27 million as compared toRs. 503.88 million in the previous year registering a growth of 12.58%. Profit after tax(PAT) was reduced to Rs. 275.86 million against Rs. 316.54 million in the previous yearwhich was mainly due to a decrease in deferred tax assets.

Consolidated Earnings per Share:

The Earnings per Share (EPS) of the Company decreased to Rs. 2.55 compared toprevious year of Rs. 2.93 which can mainly be attributed to reduced earnings followed bythe deferred tax treatment mentioned hereinabove.

OPERATIONAL PERFORMANCE

DIVIDEND

The Board of Directors has recommended a dividend of Rs. 0.50 per equity share (5% onthe face value of Rs. 10 each) on the paid up share capital of the Company for financialyear ended on March 31 2020 amounting to Rs. 54 million which if declared at the ensuingAnnual General Meeting scheduled on September 14 2020 will be paid to those shareholderswhose names appear in the Register of Members as at closing hours of business on September7 2020 (‘Cut-off date'). In respect of shares held in electronic form the dividendwill be paid on the basis of beneficial ownership furnished by both depositories NSDL andCDSL for this purpose.

The Register of Members and Share Transfer Books will remain closed from TuesdaySeptember 8 2020 to Monday September 14 2020 (both days inclusive).

INITIATIVES AT SHALBY IN RESPONSE TO COVID 19 PANDEMIC

The COVID-19 pandemic has led to unprecedented disruption not only to the globaleconomy but also to the lives of people across the globe and it has impacted all thebusinesses with different magnitude. During the lockdown declared by Ministry of HomeAffairs (GOI) all our Hospital units in India remained open for treatment of medicalemergency or other medications as healthcare falls under essential services. We havetaken inter alia the following steps to safeguard our patients and minimize theinfection at our hospital units:

Joined hands with the government in a tough time and started treatment of COVID-19patients at four hospitals in addition to non COVID patients

Instigated tele-consultation for the benefit of the patients which enabled patients toconsult the doctors for any medication needs

Homecare services were also available to our patients and the public at large forsupply of medicine nursing services at home etc.

All our doctors and concerned staff have been provided Personal Protective EquipmentKits for safety purpose

Abundant precautions are being followed at every unit to handle COVID and non COVIDpatients

All our hospital units are being being sanitized frequently strictly following theprotocols for handling the protocols for handling COVID-19 positive and negative patientswithout disrupting the business operation

Maintaining social distancing norms and also framed work from home policy for ouremployees during the lockdown period Worked with limited number of employees and requireddoctors during the lock down period for safeguarding the interest of all

Conducted many webcasts through social media to address common query of patients andgeneral public at large with immense response

• Conducted many webcasts to create general awareness about COVID-19 pandemic andprecautions needed to protect from COVID-19 pandemic

BUSINESS AND STRATEGY

Nashik Project: The Company had entered into a definitive agreement (O & MAgreement) with Samruddhi Hospital P. Ltd in the year 2014 to operate and manage thehospital for a period of 30 years. Under this arrangement Samruddhi will construct thehospital building and hand over to your Company ready to use building to manage thehospital and your Company will invest estimated capex of 310 million thereto. The projecthas been delayed due to the novel COVID-19 pandemic spread across the globe. It isestimated that your Company may receive possession of constructed building in Fiscal 2022and it is anticipated to start the operation of the 113 bedded hospital in Fiscal 2023.

Mumbai Project: Your Company is in the process of setting up a 175 bedded hospitalin the heart of Mumbai Santacruz to be equipped with state of the art equipment andtechnology. The existing structure in place is a building over 60 years old which needsto be demolished completely and your Company together with counterpart are in the processof demolishing the existing structure to commence construction of new building. It isanticipated that necessary permission for demolition of existing structure and approval ofproposed building will be received in current Fiscal 2021 thereafter your Company willstart the construction and complete the new hospital building after investing estimatedcapex of Rs. 1600 million. It is also estimated that the delay in this project will bemore than six months due to consequential impact of ongoing novel COVID-19 pandemic spreadacross the Globe and it is expected to start the operations in later part of Fiscal 2024.

Information Technology Infrastructure

With the increase in demand of digital transformation in healthcare sector Shalbyembarked its journey of digital transformation across its all hospitals from 2018-19.Shalby's technology focus is not only about computerizing hospitals making Apps makingit easier for patients to make an appointment online ChatBots IVR Based call centresetc. but also about looking for a continuous and multidimensional process that is linkedto social economic and technological factors that go beyond the hospital walls and abouta change of mind-set with regard to hospital processes. During this journey of digitaltransformation Shalby as an organization is looking at the patient and organizing itsprocess to give efficient and effective care both from Clinical and the technicalperspectives and has facilitated patient-physician exchange of information through safecommunication and doctor-patient confidentiality. Members are requested to refer toManagement Discussion and Analysis section for detailed information on enhancement ofinformation technology infrastructure in the Company.

CREDIT RATING

During the year under review IICRA Limited has reaffirmed the long term credit ratingsas ICRA A on term loans and fund based facilities availed by the Company and the outlookon the long term rating as "Positive". This rating indicates an adequate degreeof safety regarding timely servicing of financial obligations and low credit risk.

UTILIZATION OF IPO PROCEEDS & LISTING

During the Fiscal 2018 the Company had completed its initial public offering of20354838 equity shares of Rs. 10 each at price of Rs. 248 per equity share (includingpremium of Rs. 238 per share) comprising of fresh issue of 19354838 equity sharesamounting to Rs. 4800 million and offer for sale of 1000000 equity shares amounting toRs. 248 million aggregating to Rs. 5048 million. The said equity shares got listed onNational Stock Exchange Limited and BSE Limited effective from December 15 2017. Out ofthe IPO proceeds of Rs. 4800 million your Company has utilized Rs. 4196.39million as per objects of the offer and the Company has varied in terms of the objects ofinitial public offering to the extent of Rs. 603.61 million after receiving shareholders'approval by passing special resolution in the 15th Annual General Meeting heldon August 26 2019. During the year under review your Company has fully utilized the saidamount of Rs. 603.61 million as per revised objects and in the manner as approved by theshareholders as mentioned herein above. There was no amount of issue proceeds pending tobe utilized at end of March 2020. Your Company had appointed HDFC Bank Limited as themonitoring agency in terms of regulation 16 of SEBI (Issue of Capital and DisclosureRequirements) Regulation 2009 as amended to monitor the utilization of IPO proceeds andCompany has obtained monitoring reports from the Monitoring agency upto the third quarterof the year under review and filed the same with both exchanges where equity shares of theCompany are listed. The said reports issued by the monitoring agency together withstatement of utilization of issue proceeds prepared pursuant to regulation 32 of SEBI(LODR) Regulation 2015 are available at https://www.shalby.org/investors under Statementof Utilization / Deviation or Variation – IPO Proceeds.

SHARE CAPITAL

During the year under review there is no change in the share capital of the Company.The authorized share capital of the Company stands at Rs. 1177.50 million divided into117750000 equity shares of Rs. 10 each. The issued subscribed & paid up sharecapital of the Company stands at Rs. 1080.10 million divided into 108009770 equityshares of Rs. 10 each.

CONSOLIDATED FINANCIAL STATEMENTS AND REPORT ON PERFORMANCE OF SUBSIDIRIES

During the year under review your Company has five subsidiaries viz. Vrundavan ShalbyHospitals Limited Shalby (Kenya) Limited Shalby International Limited YogeshwarHealthcare Limited Griffin Mediquip LLP. During the current FY 2020-21 your Company hasincorporated a new wholly owned subsidiary Company under the name and style ‘MarsMedical Devices Limited' on April 3 2020 with authorized share capital of Rs.1500000 divided into 150000 equity share of Rs. 10 each and paid up share capital ofRs. 500000 divided into 50000 equity share of Rs. 10 each. The said subsidiary Companyis yet to commence its operation as of now.

In accordance with the provisions of Section 129(3) of the Companies Act 2013 andRegulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the Consolidated Financial Statements form part of this Annual Report which shallalso be laid before the ensuing Annual General Meeting of the Company.

The Standalone and Consolidated Financial Statements have been prepared in accordancewith the Indian Accounting Standards (Ind AS) notified under Section 133 of the CompaniesAct 2013 read with Rule 7 of the Companies (Accounts) Rules 2014. A report on theperformance and financial position of each of the subsidiaries and LLP as per theCompanies Act 2013 is provided as Annexure - A which forms part of this Report. Inaccordance with Section 136 of the Companies Act 2013 the audited Financial statementsincluding consolidated financial statements and related information of the Companyand audited accounts of each of its subsidiaries are available at Annual Reports sectionat https://www.shalby. org/investors. The financial statements of the Company andsubsidiary companies shall be available for e-inspection. Members may refer note no 22annexed to the notice of AGM for e-inspection.

AWARDS & RECOGNITIONS

During the financial year 2019-20 your Company has been awarded with the "BestBrand Evolution Award" in the category of Healthcare Excellence Awards 2019 byIndian Express Group "Dare to Dream Zee Business Awards-Company of the year" byZee Business "Gujarat Healthcare Leadership Award" and "Madhya PradeshHealthcare Leadership Award" by World Health and Wellness Congress & Awards"Medical Value Travel Specialist Hospital Award" in the Orthopedics category(Joint Replacement) instituted by Department of Commerce Ministry of Commerce &Industry Government of India and FICCI.

ANNUAL RETURN MGT 7

The Annual return of the Company for FY 2018-19 has been placed on the website of theCompany at https://www.shalby. org/investors/ in Annual Return section. The Company willalso place annual return for FY 2019-20 after completion of ensuing

Annual General Meeting of shareholders of the Company. The extract of AnnualReturn–MGT-9 as on March 31 2020 is enclosed as Annexure – B herewith.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S 186 OF THE COMPANIES ACT 2013

Particulars of loans given investments made guarantees given and securities providedin the notes to the standalone financial statements forming part of this annual report.

PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY U/S 188 OF THE COMPANIESACT 2013

The transactions entered into with related parties during the year were generally onarm's length basis. Pursuant to Regulation 23 of the Listing Regulations all relatedparty transactions were placed before the Audit Committee on a quarterly basis specifyingthe nature value and terms and conditions of the transactions for their review andapproval.

During the year under review there were no material transactions with related partiesin terms of regulation 23 of SEBI Listing Regulations. The details of the related partytransactions are provided in the Annexure- C (AOC - 2) pursuant to Section 134(3) (h) ofthe Act read with rule 8 (2) of the Companies (Accounts) Rules 2014. Your Directors drawthe attention of members to the notes to the financial statements which set out relatedparty disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT AND RESIGNATION

There is no change in Directors or Key Managerial Personnel during the year underreview. As on March 31 2020 Dr. Vikram Shah Chairman & Managing Director Mr.Prahlad Rai Inani Chief Financial Officer and Mr. Jayesh Patel Company Secretary of theCompany are the Key Managerial Personnel as per the provisions of the Companies Act 2013.

DIRECTORS RETIRING BY ROTATION

In terms of section 152 of the Companies Act 2013 Mr. Shyamal Joshi (DIN: 00005766)being the longest in the office shall retire at the ensuing Annual General Meeting andbeing eligible for reappointment offers himself for re-appointment.

A brief resume of Director being re-appointed along with the nature of his expertisehis shareholding in the Company and other details as stipulated under Regulation 36(3) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andSecretarial Standard on general meeting (SS-2) is appended as an annexure to the Notice ofthe ensuing Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirmingthat they meet criteria of independence as prescribed under Section 149 (6) of theCompanies Act 2013 and under Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and they have also confirmed that they are notaware of any circumstance or situation which exist or may be reasonably anticipated thatcould impair their ability to discharge their duties with an objective independentjudgment and without any external influence.

BOARD MEETINGS

The Board met four times during the year under review on May 25 2019 July 29 2019November 11 2019 and February 3 2020. The numbers of meetings and its attendance havebeen provided in the Report on Corporate Governance which forms part of Annual Report.

COMMITTEES

The Company has various committees which have been formed in compliance of provisionsof Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and are in compliance with the provisions of relevant statutes.

The Board has constituted following committees. i. Audit and Risk Management Committeeii. Stakeholder Relationship Committee iii. Nomination and Remuneration Committee iv.Corporate Social Responsibility Committee v. Management Committee

The terms of reference of Audit & Risk Management Committee Nomination andRemuneration Committee and Stakeholder Relationship Committee have been amended in orderto incorporate amendment made in SEBI(LODR) Regulations 2015. The details with respect tothe compositions powers roles terms of reference numbers of Committees along withtheir attendance etc. of respective Committees are provided in detail in the ‘Reporton Corporate Governance' which forms part of this Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards (SS1 and SS2) issued by the Institute of Companies Secretaries ofIndia relating to Meetings of the Board its Committees and meeting of shareholders whichare made mandatory.

POLICY ON APPOINTMENT AND REMUNERATION TO DIRECTORS KMP & SENIOR MANAGEMENTPERSONNEL

The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 have been disclosed briefly in theCorporate Governance Report which forms part of this Report. Your Company‘s Policyin this regard includes inter alia criteria for determining qualifications positiveattributes independence of a director and other matters as required under sub-section (3)of Section 178 of the Companies Act 2013. The said policy is available athttps://www.shalby.org/wp-content/ uploads/2018/01/Nomination-Remueration-Policy final.pdf

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Company upholds the standards of governance and is compliant with the provisionsof Corporate Governance as stipulated under SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015. The Report on Corporate Governance for FY 2019-20 asper Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations 2015 forms apart of this Annual Report. The Certificate from Practicing Company Secretary confirmingthe compliance with the conditions of corporate governance as stipulated by Regulation34(3) of SEBI (LODR) Regulations 2015 is annexed to this Report.

In compliance with Corporate Governance requirements as per the SEBI ListingRegulations your Company has formulated and implemented a Code of Conduct for all Boardmembers and senior management personnel of the Company who have affirmed the compliancethereto and the same is available at https://www.shalby.org/wp-content/uploads/2017/10/Code-of-Conduct-for-Directors-Senior-Management.pdf

In terms of regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report on the Company's financial and operational performance industry trendsbusiness outlook and Initiatives and other material changes with respect to the Companyand its subsidiaries wherever applicable are presented in a separate section which formspart of the Annual Report.

BUSINESS RESPONSIBILITY REPORT

In terms of regulation 34 of the Listing Regulations the Business ResponsibilityReport describing the initiatives taken by the Company from an environment social andgovernance perspective in the format specified by SEBI is presented in a separate sectionwhich forms part of the Annual Report.

PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEE

The criteria for performance evaluation and the statement indicating the manner inwhich formal annual evaluation has been made by the Board are given in the ‘Report onCorporate Governance' which forms part of this Annual Report.

Pursuant to provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance Board committees and Individual Directors in the manner prescribedin Performance Evaluation Policy which is available at https://www.shalby.org/wp-content/uploads/2017/10/Performance-Evaluation-Policy-for-BOD.pdf

DEPOSITS

During the year the Company has not accepted any fixed deposits from the public as perprovisions of section 73 to 76 of the Companies Act 2013 and Rules made there under.Hence the disclosures as required under Rule 8 (5) (v) & (vi) of the Companies(Accounts) Rules 2014 are not applicable to your Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 134 (5) of the Companies Act 2013 your Directors hereby confirmthat: a) in the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards read with requirement set out under Schedule III to theAct have been followed and there are no material departures from the same; b) they hadselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit and loss ofthe Company for that period; c) they 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) they had prepared the annual accounts on a going concern basis;e) they had laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively; and f) theyhad devised proper systems to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under the Companies (Accounts) Rules 2014 is set out below

(A) Conservation of Energy:

The operations of the Company are not energy-intensive.

However the following significant measures are being taken to reduce energyconsumption by using energy efficient equipment.

• Phasing out of CFL lamps to LED lights

• Occupancy sensors installation in toilets to avoid permanent illumination andsave electrical consumption

Proper thermal insulation to increase efficiency of HVAC system and thereby reducingenergy consumption

• Use windows and doors to provide good levels of natural ventilation in someareas within a hospital allowing mechanical ventilation to be switched off or turned downto save energy

• Provide infrared controllers in water taps as they provide water only whenrequired switch off automatically and can save between 5 to 15% of water per tap per year

• Introduction of timer based operation of air handling units to reduce powerconsumption

Energy optimization practices implemented in transformer operation

• VFD installation for AHU motor in a phased manner

• All lifts and OT AHUs are operated with VFD panels

• For recently commissioned units building orientation has been designed tomaximize use of daylight and to reduce heat gain in order to reduce energy consumption

• For recently commissioned units the building is being constructed by usingstructural steel to reduce embedded energy and also to reduce the impact of constructionactivities to the neighborhood and environment and with STP and recycled water is beingused for flushing and plant watering to reduce water usage

• The glass used for facade in a number of facilities is double glazed and isenergy efficient low emissivity type which helps in reducing solar heat gain coefficientwhile improving the visibility

• Rain water harvesting system installed at our Greenfield recently completedprojects to conserve natural resources

• HVAC temperature is being adjusted based on the seasonal temperature andparticular clinical requirements to reduce the power consumption

Discipline wise SOP is being followed for routine maintenance on daily weeklymonthly and yearly basis as required to keep the system installed in check and reduceconsumptions of water and electricity

In case of modification or renovation we maximize the usage of existing materials toconserve the natural resources

There would not be a material financial implication of said measures as energy costscomprise a very small portion of your Company's total expenses.

(B) Technology absorption:

I. The effort made towards technology absorption: Over the years your Company hasbrought into the country the best technology available in healthcare to serve the patientsbetter and to bring healthcare of international standard within the reach of everyindividual.

In order to promote indigenous technology absorption the following equipment interalia has been installed at our various units;

a) Anesthesia workstation;

b) Tripple Dome OT lights;

c) Electric OT table with 10 functions for renal transplant;

d) Single door auto clave machine;

e) Fabrilator Machine;

f) Biosafety Cabinet for Chemotherapy;

g) Anesthesia Trolley;

h) Baby Cradle with infant Bed;

i) Blood bank equipment including Deep freezer Blood bank refrigerator Plateletagitator/ incubator Blood collection monitor and tube sealer Donor couch compofuge;

j) X-ray system;

k) Dialysis machine;

l) Ventilator;

m) CT scanning machines;

n) MRI scanning machines;

o) Ultrasound systems; and

p) Linac systems.

During the year the Company has installed indigenous medical technology to the tune of7 million. The benefit accrued due to this is primarily cost reduction from importsubstitution considering the impact of exchange rate fluctuation and revision of customsduty tariffs. The performance and quality of this equipment have been found to be quitesatisfactory

II. The Company has imported the latest and state of the art equipment to the tune ofover 9.6 million to have latest technology in the hospital and the details of latest keymedical equipment/machinery imported and installed at various units of Shalby are set outbelow:

Technology absorption adaption and innovation Benefits Imported technology from
Oxygen Concentrator An oxygen concentrator is a device that concentrates the oxygen from a gas supply (typically ambient air) by selectively removing nitrogen to supply an oxygen-enriched product gas stream. USA
Haemodialysis Machine To achieve the extracorporeal removal of waste products such as creatinine and urea and free water from the blood when the kidneys are in a state of kidney failure. Germany
Defibrilator BI Phasic To survive patient from cardiac arrest by DC shock treatment. a biphasic defibrillator delivers current that travels through the heart in two directions. The first phase is the same as in conventional defibrillation. In the second phase the current reverses direction flowing through the heart again and back to the first electrode. Japan
Zimmer Tourniquet It is used in TKR & other Orthopedic surgeries in order to reduce blood loss during surgery. A tourniquet is a constricting or compressing device used to control venous and arterial circulation to an extremity for a period of time. Pressure is applied circumferentially to the skin and underlying tissues a limb; this pressure is transferred to the vessel wall causing a temporary occlusion. USA
Laser System (Karl Storz- Model : Calculase Being used for Ablation of the Prostate & Urology surgeries Germany
Hopkins Telescope 6 Degree 18 FT - 27294AA For visualization of the surgical site during diagnostic and therapeutic endoscopic procedures Germany
Central Monitoring System- 16 Beds Central Monitor system to be connected with all patient's standlone monitors in order to monitor parameters in doctor's surveillance to be used in ICCU having back up capacity - 10 to 15 days. Japan
Flexible Uretero Reno Scope flexible ureteroscopes permits complete maneuverability within the intrarenal collecting system. This scope allows both up and down deflection in a single plane. Germany
Digital Radiography Detector Panel It is dynamic flat-panel detector being used for digital fluoroscopy and angiography Germany
Drill Unit System For precision cutting of bones and drilling at high speed and perfection for properly affixing the implant in TKR & THR surgeries USA

Apart from above various other small equipment imported and are installed at variousunits of Shalby.

III. The expenditure incurred on Research and Development NIL

(C) Foreign exchange earnings and expenditure:

[Rs. in million]

Particulars 2019-2020 2018-2019
Earnings in Foreign Currency 81.93 111.57
CIF Value of Imports - -
Expenses in Foreign Currency 10.68 9.06

PARTICULARS OF EMPLOYEES & REMUNERATION

The details regarding ratio of remuneration of each Director to the median employee'sremuneration and other details as required in section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is appended herewith as Annexure - D.

The statement containing information as per provision of Section 197(12) read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in separate annexure forming part of this report. However AnnualReport is being sent without said annexure. In terms of provisions of section 136 of theCompanies Act 2013 the said annexure is open for e-inspection. Members may refer to notenumber 22 annexed to the notice of AGM for e-inspection. Any member interested inobtaining the copy of the same may write to the Company Secretary at the Registered Officeof the Company.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Company has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures. The Company has in place adequate internal financial controls in order toensure that the financial statements of the Company depict a true and fair position of thebusiness of the Company. The Company continuously monitors and looks for possible gaps inits processes and it devices and adopts improved controls wherever necessary.

RISK MANAGEMENT

The risks are measured estimated and controlled with the objective to mitigate adverseimpact. Your Company's fundamental approach to risk management includes anticipatingidentifying and measuring the risk. Your Company has in place a mechanism to monitor andmitigate various risks associated with the business. The Company has adopted a RiskManagement Policy which inter alia sets out our approach towards risk assessment riskmanagement and risk monitoring which is periodically reviewed by the Board. The RiskManagement Policy is available athttps://www.shalby.org/wp-content/uploads/2018/12/Risk-Management-Policy Final.pdf

VIGIL MECHANISM

The Company has established a vigil mechanism and accordingly framed a WhistleblowerPolicy. The policy enables the employees to report genuine concerns to the managementregarding instances of unethical behavior actual or suspected fraud or violation ofCompany's Code of Conduct or mismanagement if any. Further the mechanism adopted by theCompany encourages the whistleblower to report genuine concerns or grievances and providefor strict confidentiality adequate safeguards against victimization of whistleblower whoavails of such mechanism and also provides for direct access to the Chairman of the Auditand Risk Management Committee in appropriate cases. The functioning of vigil mechanism isreviewed by the Audit and Risk Management Committee from time to time. None of thewhistleblowers has been denied access to the Audit and Risk Management Committee of theBoard pertaining to Whistleblower Policy. The said Vigil Mechanism and WhistleblowerPolicy is available at https://www.shalby.org/wp-content/uploads/2018/01/Vigil-Mechanism-and-Whistle-blower policy-1.pdf

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of Section 135 of the Act your Company hasconstituted a CSR Committee which comprises Mrs. Sujana Shah Chairperson (w.e.f.November 11 2019) Mr. Umesh Menon Member (Chairman upto November 10 2019) Mr. ShyamalJoshi as its members as on March 31 2020. The Company has also framed a CSR Policy incompliance with the provisions of the Act which is available at https://www.shalby.org/wp-content/uploads/2018/12/Corporate-Social-Responsibility-CSR-Policy.pdf.The Annual Report on CSR activities outlining geographical areas for CSR activitiescomposition of CSR committee amount of CSR fund expended etc is annexed herewith asAnnexure - E.

OTHER DISCLOSURES AND INFORMATION

1. Anti-sexual Harassment of Women at workplace

Your Company has adopted a policy for prevention prohibition and redressal of sexualharassment at workplace under the provisions of Sexual Harassment of Women at theworkplace (Prevention Prohibition and Redressal) Act 2013 and rules framed thereunder.The Company has anti Sexual harassment Committee to redress complaints received regardingsexual harassment. All employees (permanent contractual temporary trainees) are coveredunder this policy. During the year under review there was one complaint received whichwas investigated and resolved and there were no complaints pending at March 31 2020.

2. Significant or Material Orders passed by the Authority

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status of the Company and its future operations.

3. Material changes and commitments affecting financial position

The outbreak of Coronavirus (COVID-19) pandemic globally and In India is causingsignificant disturbance and slowdown of economic activity. The Company is providinghealthcare services being "essential services" there has been no suspension ofoperation and the Company has taken further steps for smooth functioning of its operationsduring the pandemic. The management has also evaluated impact of this pandemic on itsbusiness operations and based on its review and current Indicators of future economicconditions no material impact is anticipated on the financials of the Company in the longrun. Due to the temporary suspension of services of elective surgeries and travelrestrictions of overseas patients business operations of the Company are expected to belower in the short term though the same is not likely to have a continuing impact on thebusiness of the Company in the long run. Further the Management believes that in the longterm there may not be material impact of COVID-19 pandemic on the financial position andperformance of the Company. However the impact assessment of COVID-19 is a continuingprocess given the uncertainties associated with its nature and duration and accordinglythe impact may be different from that estimated as at the date of approval of this report.The Company will continue to monitor any material changes to future economic conditions.

AUDITORS

Statutory auditor & auditors' report

Pursuant to Section 139 of the Companies Act 2013 M/s. T. R. Chadha & Co. LLPChartered Accountants has been appointed as Statutory Auditors of the Company for aperiod of 5 consecutive years who holds the office from the conclusion of 14thAGM which was held in 2018 till the conclusion of 19th AGM.

The said Statutory auditors have confirmed that they have not incurred any of thedisqualification as mentioned in section 141(3) of the Companies Act 2013 and the Rulesframed thereunder.

During the year the Auditors had not reported any matter under Section 143(12) of theAct and therefore no detail is required to be disclosed under Section 134(3) (ca) of theAct.

The Statutory Auditor's comment on your Company's account for the year ended March 312020 are self-explanatory in nature and do not require any explanation. The AuditorsReport does not contain any qualification or adverse remarks.

Internal auditor

M/s. Price Water House Coopers Pvt. Ltd. is the Internal Auditors to conduct internalaudit as per agreed scope of works pursuant to the provision of section 138 of CompaniesAct 2013 read with Companies (Accounts) Rules 2014. They were re-appointed as InternalAuditor for FY 2020-21 to conduct internal audit of the functional activities of theCompany.

Cost auditors

Pursuant to the provisions of Section 148 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 and Companies (Cost Records and Audit) Rules2014 M/s. Borad Sanjay B & Associates has been appointed as Cost Auditors by theBoard of Directors on the recommendation of Audit Committee for audit of cost records forthe year ended on March 31 2020 and their remuneration was ratified by members at the 15thAnnual General Meeting of the Company.

Your Company has received consent along with confirmation from M/s. Borad Sanjay B& Associates that the appointment is in accordance with the applicable provisions ofthe Act and Rules framed thereunder and they do not hold any disqualification undersection 139 148 and 141 of the Companies Act 2013 for their appointment for FY 2020-21.The Board of Directors of the Company re-appointed M/s. Borad Sanjay B & Associatesfor audit of cost records for the year ended on March 31 2021 at a remuneration of Rs.100.000/- plus applicable taxes and reimbursement of out of pocket expenses incurred ifany in connection with the cost audit. The Board of Directors of the Company recommendedthe members for their ratification.

The Company has maintained cost account and records as specified by Central Governmentunder Section 148(1) of the Act read with Rule 8 of Companies (Accounts) Rule 2014.

Secretarial auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhad appointed Mr. Shambhu J. Bhikadia Practicing Company Secretary (PCS Registration no.3894) to conduct the Secretarial Audit of the Company for the year ended March 31 2020.The

Secretarial Audit Report for the FY 2019-20 does not contain any qualificationreservation or adverse remarks and is annexed to this Report as Annexure - F. YourCompany has also obtained certificate from the secretarial auditor certifying that none ofthe directors of our Company has been debarred or disqualified from being continuing asdirectors of the Company by SEBI Ministry of Corporate Affairs or such similar statutoryauthority.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation for the whole heartedsupport and contribution made by all Doctors nursing/para medics especially in theongoing COVID-19 pandemic bankers Government Authorities auditors and shareholdersduring the year under review. Your Directors express their deep sense of appreciation andextend their sincere thanks to every employee at all level for their dedicated servicesand look forward their continued support.

CAUTIONARY STATEMENT

The Board's Report and Management Discussion & Analysis may contain certainstatements describing the Company's objectives expectations or forecasts that appear tobe forward-looking within the meaning of applicable securities laws and regulations whileactual outcomes may differ materially from what is expressed herein. The Company is notobliged to update any such forward-looking statements. Some important factors that couldinfluence the Company's operations comprise economic developments pricing and demand andsupply conditions in global and domestic markets changes in government regulations taxlaws litigation and industrial relations.

For and on behalf of the Board of Directors Dr. Vikram I. Shah
Place : Ahmedabad Chairman & Managing Director
Date : June 15 2020 DIN : 00011653

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