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Shalby Ltd.

BSE: 540797 Sector: Health care
NSE: SHALBY ISIN Code: INE597J01018
BSE 09:16 | 01 Dec 150.85 1.30
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NSE 00:00 | 30 Nov 149.60 1.55
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OPEN 150.85
PREVIOUS CLOSE 149.55
VOLUME 17
52-Week high 155.75
52-Week low 95.10
P/E 21.77
Mkt Cap.(Rs cr) 1,629
Buy Price 149.85
Buy Qty 10.00
Sell Price 150.35
Sell Qty 10.00
OPEN 150.85
CLOSE 149.55
VOLUME 17
52-Week high 155.75
52-Week low 95.10
P/E 21.77
Mkt Cap.(Rs cr) 1,629
Buy Price 149.85
Buy Qty 10.00
Sell Price 150.35
Sell Qty 10.00

Shalby Ltd. (SHALBY) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Eighteenth Annual Report onbusiness and operations of the Company along with audited financial statements for thefinancial year ended March 312022.

FINANCIAL PERFORMANCE SUMMARY

The summarized financial highlight is depicted below;

(' in million)

Particulars

Standalone

Consolidated

2021-22 2020-21 2021-22 2020-21
Revenue from Operations 6471.60 4186.69 6989.45 4308.96
Other Income 126.35 96.16 124.22 90.62
Total Expenditure (Except Finance cost & Depreciation/Amortization) 5171.46 3325.43 5790.13 3444.90
Profit before Interest Depreciation and Tax 1426.48 957.42 1323.54 954.69
Less : Finance Cost 27.90 35.84 59.01 36.19
Depreciation/Amortization 355.02 366.66 428.70 367.95
Exceptional Item 44.37 - 44.37 -
Profit Before Tax 999.20 554.91 791.46 550.55
Provision for Taxation (Inclusive of provision for deferred tax) 301.15 126.11 251.75 126.93
Profit After Tax 698.06 428.80 539.71 423.62
Other comprehensive income (2.94) 1.65 2.23 1.63
Total Comprehensive Income 695.12 430.45 541.93 425.25

PERFORMANCE OF THE COMPANY

During the year under review the revenue from operations of theCompany increased to ' 6471.60 million as compared to ' 4186.69 million inthe previous year. The EBITDA for the year under review increased to ' 1426.48million against previous year of ' 957.42 million. Your Company has earned Profitafter tax of ' 698.06 million as against ' 428.80 million in the previousyear.

During the year under review the consolidated revenue from operationsincreased to ' 6989.45 million as compared to ' 4308.96 million in theprevious year. The consolidated EBITDA increased to ' 1323.54 million from '954.69 million in the previous financial year.

DIVIDEND

The Board of Directors has recommended a dividend of ' 1/- perequity share (10% on the face value of ' 10/- each) on the paid up share capital ofthe Company for financial year ended on March 31 2022 amounting to ' 1080.10million which if declared at the ensuing Annual General meeting scheduled on September26 2022 will be paid to those shareholders whose names appear in the Register of membersas at closing hours of business on Tuesday September 20 2022 ('cut-off date'). Inrespect of shares

held in electronic form the dividend will be paid on the basis ofbeneficial ownership furnished by both depositories NSDL and CDSL for this purpose.

The Register of Members and Share Transfer Books will remain closedfrom Wednesday September 21 2022 to Monday September 26 2022 (both days inclusive).

TRANSFER TO RESERVES

The Board of Directors has not appropriated and transferred any amountout of profit to General Reserves and has decided to retain the entire amount in profitand Loss account.

BUSINESS & STRATEGY UPCOMING PROJECTS

Nashik Project: The Company had entered into a definitive O&Magreement with Samruddhi Hospital P. Ltd (developer) in the year 2014 for a period of 30years. Under this arrangement the developer will construct the hospital building and handover to your company for investing equipment and technology with an estimated capex of '310 million to manage the hospital thereto. The project delayed due to the novel Covid-19pandemic spread across the globe. But

we have noticed some progress now and estimated to receive thepossession of constructed building during Fiscal 2023 to start the operation of the 146bedded hospital.

Mumbai Project: The Company is in the process of setting up a Stateof Art facility with 175 bed capacity in the heart of Mumbai Santacruz. Your company hadentered into a long lease agreement with counterpart to manage the entire operations ofhospital wherein the existing structure needs to be demolished completely and a newstructure will be constructed with an estimated capex of ' 1600 million. Due to ongoingnovel Covid-19 pandemic spread across the globe the project got delayed and now it isexpected to start the operations by Fiscal 2026.

Franchise Business

Shalby has strategically devised a unique asset-light Franchisebusiness model under Shalby Orthopedic Centre Of Excellence (SOCE) brand by leveraging itorthopedic expertise of more than 28 years. In this process your company has designed twooperational models called Franchise owned Shalby operated and Franchise owned Franchiseoperated. So far more than we have signed more than 5 MOUs and rebranded our Vijay unitunder SOCE. As a core strategy we remain on course to capitalize on our expertise andexcellence in orthopedics and aim to have over 50 Shalby franchise hospitals across Indiawithin the next 3 years and also accelerating the process of taking over operations in ourbrand name.

Implant Business

With clear strategic direction Shalby has ventured into implant (Knee& Hip) manufacturing business by acquiring Consensus Orthopedics headquartered inCalifornia USA and incorporated Shalby Advanced Technologies Inc. (SAT) in the firstquarter of Fiscal 2022. Your company has acquired the entire manufacturing assets whichincludes plant equipment and patents along with implant inventory and also inherited alegacy of Zero product recall in the US market. The acquisition does not only enableShalby to integrate backward our core specialty of orthopaedics but also aid to diversifyhospital business as well as revenue mix. Your company is committed to establish a strongfootprint into the vast opportunity that exists in the world's largest implant market likeUS and gradually to enter into South Asian Countries like India Nepal and Bangladesh andSouth-East Asian countries like Malaysia Indonesia Vietnam and Philippines & lateron Middle East and East African Countries in an organic and phased manner.

These 3 well diversified businesses come together to create a strongecosystem to carry forward the strong Shalby Legacy of world-class Orthocare for theIndian population.

Information Technology Infrastructure

The healthcare industry driven by value-based patient care is at apivotal point with greater emphasis on connectivity accessibility and reliability as theworld is transforming digitally to ensure we

don't miss out on life saving critical information. India being a fifthlargest economy is also steppingstone toward becoming a global healthcare center with thegovernment thrust and support in terms of introducing various healthcare schemes andtaking other key initiatives to focus on medical tourism. And to achieve this dreamgovernment has created a robust digital platform called Medi value travel under "Healin India" campaign to facilitate international patients to connect with India'sleading healthcare service providers.

Shalby is continuously adding value in patient care by reengineeringand streamlining the processes with the help of technology adoption. Having a globalpresence we have identified various opportunities to implement new technological tools bysynchronizing business functions which will help to accelerate business growth. We atShalby have stated various projects and successfully accomplished them under greatleadership and guidance of management. Few of them are as follows-

"Project Samanvay"

We have identified the real need of ERP system to support the growth ofoperations hence conceptualized "Project Samanvay" for theimplementation of SAP in our organization. We are proud to announce the successfulaccomplishment of the project with Go-Live of SAP S4/Hana 2020 in the month of March 2022with a big-bang approach across all units in a short span of 8 months along withintegration of Hospital Information System. This strategic implementation is quite in-lineof being global and also to strengthen our financial & operational process byimprovising database management administration security real-time access and advanceanalytics to support the business decisions.

Project SUFALAM

Our dedicated information technology team effectively deployed thecentralized cloud-based Lab Information System across ten hospital units under criticaldeadlines. This facilitated to standardize and centralize the diagnostic reports acrosshospital units. As a results our patients are also benefited by receiving theirpathological reports through WhatsApp & SMS immediately after its preparation.Additionally these reports are QR code enabled helps to fetch the information any timeanywhere.

As a process of strengthening patient reach and experience AI andML-powered chat bots and Whatsapp BOT are deployed to build easy and convenientengagements with our patients. This touch point enabled the patients to book and managethe appointments and also answering various queries. As an organization we believechatbots are the future because they benefit from rapid data analysis and will also dotasks such as connecting engaging and other important tasks that are a perfectalternative much faster that human work.

In addition to above big projects we at Shalby have accomplishedseveral other vital developments making organization further technology equipped.

• I implemented advanced CRM systems to manage patient queriesfrom social media for end-to-end seamless interactions. The CRM system is very closelyinterconnected with our call-center system to reduce operational costs increaseefficiency and improve our services. With the help of CRM we have a centralized datastorage system which enables us to manage all patient engagements and build strongcommunicational relationships. This speed up the interaction helps us store and sortpatient data provides immediate medical records manages schedules allocates resourcesand optimizes our human resource capabilities.

• I n the space of online consultations we have significantlyleveraged telemedicine to streamline and strengthen frequent interactions with patients.Technology has helped us in reducing our dependence on paper and has aided in the adoptionof tech-enabled platforms.

Healthcare system is becoming future ready with amazing digitaltransformation. With 4.0 industrial revolution and post pandemic we have noticedphenomenal digital interference and disruption in healthcare industry. With the augment ofvirtual reality and artificial intelligence the healthcare industry is expected towitness treatment through video consultation to grow by more than 80% from the currentoccurrence. Moreover smart EMR system would be assisting to achieve it. Therefore in thecoming era Healthcare would be safer affordable and accessible. As we go digital wedissolve artificial layers & boundaries within organization and world as a whole. Weat Shalby are committed to bringing transformation through continuous learning and theadoption of technological advancements to bring about a culture that fosters innovationand strongly believe that these strategic and digital initiatives will bring lastingmeasurable impacts in many more coming years.

CREDIT RATING

During the year under review ICRA Limited has upgraded the long termcredit ratings as ICRA A+ (Stable) on term loans and fund based facilities availed by theCompany and the outlook on the long term rating is "Stable". This ratingindicates adequate degree of safety regarding timely servicing of financial obligationsand low credit risk.

SHARE CAPITAL

During the year under review there was no change in the share capitalof the Company. The authorized share capital of the Company stands at ' 1177.50million divided into 117750000 equity shares of ' 10/- each. The issuedsubscribed & paid up share capital of the Company stands at ' 1080.10 milliondivided into 108009770 equity shares of ' 10/- each.

CONSOLIDATED FINANCIAL STATEMENTS AND REPORT ON PERFORMANCE OFSUBSIDIARIES

As on March 31 2022 your Company has eight subsidiaries viz.Vrundavan Shalby Hospitals Limited Shalby International Limited Yogeshwar HealthcareLimited Slaney Healthcare Pvt. Ltd. Griffin Mediquip LLP Shalby (Kenya) Limited MarsMedical Devices Limited and Shalby Hospitals Mumbai Pvt. Ltd.

Mars Medical Devices Limited has further two subsidiaries namelyShalby Advanced Technologies Inc. at Delaware USA for manufacturing and supply oforthopedic implant instruments knee systems and hip systems for which company hasacquired assets from Consensus Orthopedics California USA and the second one is ShalbyGlobal Technologies Pte Ltd. in Singapore which are into trading business of saidimplants and other medical devices. Both these companies are step- down subsidiaries ofShalby Limited.

In accordance with the provisions of Section 129(3) of the CompaniesAct 2013 and Regulation 34 of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Consolidated Financial Statements form part of thisAnnual Report which shall also be laid before the ensuing Annual General Meeting of theCompany.

The Standalone and Consolidated Financial Statements have been preparedin accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 ofthe Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014. Areport on the performance and financial position of each of the subsidiaries and LLP asper the Companies Act 2013 is provided as Annexure A (AOC-1) which forms part of thisReport. In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available at InvestorsSection under Annual Report tab at https://www.shalbv.org/ investors.The financialstatements of the Company and subsidiary companies shall be available for inspection byany shareholder(s) during working hours at the Company's Corporate office and that of therespective subsidiary companies concerned.

AWARDS & RECOGNITIONS

During the financial year 2021-22 your company has been awarded withthe "Best Medical Tourism Centre of Gujarat Award - 2021 by State TourismGovernment of Gujarat for the 5th consecutive year for servicing International patientsand contribution to Medical Tourism Best Homecare Company for national level at EconomicTimes Healthcare Awards 2021 Best Hospital - Orthopaedics for national level at EconomicTimes Healthcare Awards 2021 Fastest Growing tertiary care hospital in

Rajasthan Patient friendly hospital by Association of HealthcareProviders (India) Best Hospital of the year by Six Sigma Star Healthcare New DelhiFirst ranking in Swatch (clean) Hospital by Surat Municipal Corporation.

ANNUAL RETURN (MGT-7)

Pursuant to section 92(3) read with section 134(3)(a) of the CompaniesAct 2013 the Annual return of the Company as on March 31 2022 is available on theCompany's website at https://www.shalbv.org/wp-content/uploads/2019/05/Form MGT 7 2021-22print-pdf.pdf

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

Particulars of loans given investments made guarantees given andsecurities provided in the notes to the standalone financial statements forming part ofthis annual report.

PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY U/S 188 OFTHE COMPANIES ACT 2013

All the related party transactions that were entered into during thefinancial year were on arm's length basis and your Company has taken approval of auditcommittee Board of Directors and shareholders whenever applicable. Pursuant to Regulation23 of the Listing Regulations all related party transactions were placed before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions for their review and approval.

During the year under review there was no material transactionscarried out with any of the related parties in terms of regulation 23 of SEBI ListingRegulations. The details of the related party transactions are provided in the Annexure- B(AOC - 2) pursuant to Section 134(3)(h) of the Act read with rule 8(2) of The Companies(Accounts) Rules 2014. Your directors draw the attention of members to the notes to thefinancial statements which set out related party disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT AND RESIGNATION

During the financial year 2021-22 the appointment of Mr. SushobhanDasgupta as a Vice Chairman and Global President has been approved by the Shareholders atthe 17th Annual General Meeting.

Dr. Umesh Menon Independent Director has been appointed for secondterm w.e.f. December 20 2021 for a period of 5 years and the members have approved theresolution through Postal Ballot on December 3 2021.

Mr. Tej Malhotra Independent Director has been appointed for secondterm w.e.f. February 23 2022 for a period of 5 years and the members have approved theresolution through Postal Ballot on December 3 2021.

Mr. Venkat Parasuraman has been appointed as Chief Financial Officerin place of Mr. Prahlad Rai Inani w.e.f. February 2 2022. As on March 31 2022 Dr.Vikram Shah Chairman & Managing Director Mr. Venkat Parasuraman Chief FinancialOfficer and Mr. Tushar Shah Associate Vice President and Company Secretary of the Companyare 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. SushobhanDasgupta (DIN: 06381955) being the longest in the office shall retire at the ensuingAnnual General Meeting and being eligible for reappointment offers himself forre-appointment.

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

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the IndependentDirectors confirming that they meet criteria of independence as prescribed under Section149 (6) of the Companies Act 2013 and under Regulation 16(1)(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and they have also confirmedthat they are not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair their ability to discharge their duties with an objectiveindependent judgment and without any external influence.

BOARD MEETINGS

The Board met five times during the year under review on May 05 2021May 14 2021 August 09 2021 October 26 2021 and February 02 2022. The numbers ofmeetings and its attendance have been provided in the Report on Corporate Governance whichforms part of Annual Report.

COMMITTEES

The Company has various committees which have been formed in complianceof provisions of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and are in compliance with the provisions of relevantstatutes.

The Board has constituted following committees.

i. Audit Committee

ii. Risk Management Committee.

iii. Stakeholder Relationship Committee

iv. Nomination and Remuneration Committee

v. Corporate Social Responsibility Committee

vi. Management Committee

The details with respect to the composition powers roles terms ofreference numbers of committees along with their attendance etc. of respective Committeesare provided in detail in the 'Report on Corporate Governance' which forms part of thisAnnual Report. The Company has constituted Risk Management Committee on August 9 2021.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with theapplicable Secretarial Standards (SS-1 and SS-2) issued by the Institute of CompanySecretaries of India relating to Meetings of the Board its Committees and meeting ofshareholders which are made mandatory.

POLICY ON APPOINTMENT AND REMUNERATION TO DIRECTORS KMP & SENIORMANAGEMENT PERSONNEL

Company's policy on Directors' appointment and remuneration and othermatters provided in Section 178(3) of the Companies Act 2013 has been disclosed brieflyin the Corporate Governance Report which forms part of this Annual Report. Your Company'sPolicy on remuneration for the Directors Key Managerial Personnel and other employees andCompany's policy in this regard includes inter-alia criteria for determiningqualifications positive attributes independence of a director and other matters asrequired under sub-section (3) of Section 178 of the Companies Act 2013. The said policyis available at https://www.shalby.org/wp-content/uploads/2017/10/Nomination-Remuneration-Policy final-v2.pdf

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Company upholds the standards of governance and is compliant withthe provisions of Corporate Governance as stipulated under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Report on Corporate Governance for FY2021-22 as per Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations2015 forms a part of this Annual Report. The Certificate from Practicing Company Secretaryconfirming the compliance with the conditions of corporate governance as stipulated byRegulation 34(3) of SEBI (LODR) Regulations 2015 is annexed to this Report.

In compliance with Corporate Governance requirements as per the SEBIListing Regulations your Company has formulated and

implemented a Code of Conduct for all Board members and seniormanagement personnel of the Company who have affirmed the compliance thereto and the sameis available at https://www. shalbv.org/wp-content/uploads/2017/10/Code-of-Conduct-for-Directors-Senior-Management-v2.pdf

In terms of regulation 34 of the Listing Regulations the ManagementDiscussion and Analysis Report on the Company's financial and operational performanceindustry trends business outlook and Initiatives and other material changes with respectto the Company and its subsidiaries wherever applicable and CEO/CFO Certificates theretoare presented in separate section which forms part of the Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

As stipulated under the Listing Regulations the BusinessResponsibility and Sustainability Report (BRSR) describing the initiatives taken by theCompany from an environmental social and governance perspective is attached as part ofthe Annual Report. While BRSR reporting was purely voluntary for FY 2021-2022 the Companydecided to voluntarily comply with the BRSR guidelines.

PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEE

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

Pursuant to provisions of Companies Act 2013 and SEBI (ListingObligations and Disclosure requirements) Regulations 2015 the Board has carried out anannual evaluation of its own performance Board committees and individual directors in themanner prescribed in Performance Evaluation Policy which is available athttps://www.shalby.org/wp-content/uploads/2017/10/Performance-Evaluation-Policy-for-BOD-v2.pdf

DEPOSITS

During the year the Company has not accepted any fixed deposits fromthe public as per provisions of Section 73 to 76 of the Companies Act 2013 and Rules madethere under. Hence the disclosures as required under Rule 8 (5) (v) & (vi) of theCompanies (Accounts) Rules 2014 are not applicable to your Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 134 (5) of the Companies Act 2013 your Directorshereby confirm that:

a) in the preparation of the annual accounts for the year ended March31 2022 the applicable accounting standards read with requirement set out under ScheduleIII to the Act have

been followed and there are no material departures from the same;

b) they had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;

c) they had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other 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 thecompany and that such internal financial controls are adequate and were operatingeffectively; and

f) they had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

Particulars of Energy Conservation Technology Absorption and ForeignExchange Earnings and Outgo required under The Companies (Accounts) Rules 2014 is set outbelow;

(A) Conservation of Energy:

The operations of the Company are not energy-intensive. However thefollowing significant measures are being taken to reduce the energy consumption by usingenergy efficient equipment.

• Use of LED lights

• Occupancy sensors installation in toilets to avoid permanentillumination and save electrical consumption

• Proper thermal insulation to increase efficiency of HVAC systemand thereby reducing energy consumption

• use windows and doors to provide good levels of naturalventilation in some areas within a hospital allowing mechanical ventilation to beswitched off or turned down to save energy

• Provide infrared controllers in water taps as they provide wateronly when required otherwise they switch off automatically and can save between 5 and 15%of water per tap per year

• Introduction of timer based operation of air handling units toreduce power consumption

• Energy optimization practices implemented in transformeroperation

• VFD installation for AHU motor in a phased manner

• All lifts and OT AHUs are operated with VFD panels

• In some of the units building orientation has been so designedthat helps to maximize use of Day Light and to reduce heat gain in order to reduce energyconsumption.

• The building is being constructed by using structural steel toreduce embedded energy and also to reduce the impact of construction activities to theneighborhood and environment and with STP and recycled water is being used for flushingand plant watering to reduce water usage.

• The glass used for facade in a number of facilities is doubleglazed and is energy efficient low emissivity type which helps in reducing solar beat gainco-efficient while improving the visibility.

• Rain water harvesting system installed at our greenfieldrecently completed projects to conserve natural resources

• HVAC temperature is being adjusted based on the seasonaltemperature and particular clinical requirements to reduce the power consumption.

• Disciplined SOP is being followed for routine maintenance ondaily weekly monthly and yearly basis as required to keep the system installed incheck and reduce consumptions of water and electricity.

• In case of modification or renovation we maximize the usage ofexisting materials to conserve the natural resources.

There would not be a material financial implication of the saidmeasures as energy costs comprise 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 has brought into the country the besttechnology available in healthcare to serve the patients better and to bring healthcare ofinternational standard within the reach of every individual.

In order to promote indigenous technology absorption the followingequipment inter alia has been installed at our various units;

a) Anesthesia workstation

b) Triple 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 Bloodbank refrigeratorPlatelet agitator/incubator Bloodcollection monitor and tube sealer Donor couchcompofuge

j) X-ray system;

k) Dialysis machine;

l) Ventilator;

m) CT scanning machines;

n) MRI scanning machines;

o) Ultrasound systems; and

p) Linac systems.

q) Neuro Microscope

r) Spine Navigation System

s) Cathlab

t) Ivus

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 these equipments have been found to be quitesatisfactory.

II. Due to spread of Covid-19 across the globe company has notimported any equipment during the year under review. However Company is using latestmedical equipment/machinery in its hospital units.

Apart from above various other small equipment imported from overseashave been installed at various units of Shalby.

III. The expenditure incurred on Research and Development

NIL

(C) Foreign exchange earnings and expenditure:

(' in million)

Particulars 2021-2022 2020-2021
Earnings in Foreign Currency 42.56 13.08
CIF Value of Imports - -
Expenses in Foreign Currency 1.54

PARTICULARS OF EMPLOYEES & REMUNERATION

The details regarding ratio of remuneration of each director to themedian employee's remuneration and other details as required in section 197(12) of theCompanies Act 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended herewith as Annexure - C.

The statement containing information as per provision of Section197(12) read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in separate annexure forming part of thisreport. However Annual Report is being sent without the said annexure. In terms ofprovisions of section 136 of the Companies Act 2013 the said annexure is open forinspection at the registered office of the Company during the office hours. Any memberinterested in obtaining the copy of the same may write to the Company Secretary at theRegistered Office of the Company.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Company has adopted policies and procedures for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial disclosures. The Company has in place adequate internal financial controls inorder to ensure that the financial statements of the Company depict a true and fairposition of the business of the Company. The Company continuously monitors and looks forpossible gaps in its processes and it devices and adopts improved controls wherevernecessary.

INSURANCE

The Company's plants properties equipments and stocks are adequatelyinsured against all major risks. The Company has also taken Directors' and Officers'Liability Insurance Policy to provide coverage against the liabilities arising on them.

RISK MANAGEMENT

The risks are measured estimated and controlled with the objective tomitigate its adverse impact. Your company's fundamental approach to risk managementincludes anticipate identify and measure the risk. Your company has in place a mechanismto monitor and mitigate various risks associated with the business. The Company hasadopted a risk management policy which inter alia sets out our approach towards riskassessment risk management and risk monitoring which is periodically reviewed by theBoard. The said policy is available athttps://www.shalbv.org/wp-content/uploads/2017/10/Risk- Management-PolicyClean-final-v2.pdf

VIGIL MECHANISM

The Company has established a vigil mechanism and accordingly framed aWhistle Blower Policy. The policy enables the employees to report genuine concerns to themanagement regarding instances of unethical behavior actual or suspected fraud orviolation of Company's Code of Conduct or mismanagement if any. Further the mechanismadopted by the Company encourages the Whistle Blower to report genuine concerns orgrievances and provide for strict confidentiality adequate safeguards againstvictimization of Whistle Blower who avails of such mechanism and also provides for directaccess to the Chairman of the Audit Committee in appropriate cases. The functioning ofvigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistleblowers has been denied access to the Audit Committee of the Board pertaining to whistleblower policy. The said Vigil Mechanism and Whistle-Blower Policy is available athttps://www.shalby.org/wp-content/uploads/2017/10/Vigil- Mechanism-and-Whistle-blowerpolicy-v2.pdf

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of Section 135 of the Act yourCompany has constituted a CSR Committee which comprises of Mrs. Sujana Shah ChairpersonDr. Umesh Menon Member and Mr. Shyamal Joshi as its members as on March 31 2022. TheCompany has also framed a CSR Policy in compliance with the provisions of the Act which isavailable at https:// www.shalby.org/wp-content/uploads/2017/10/Corporate-Social-Responsibilitv-CSR-Policv-v3.pdf The Annual Report on CSR activities outlininggeographical areas for CSR activities composition of CSR committee amount of CSR fundexpended etc. is annexed herewith as Annexure - D.

OTHER DISCLOSURES AND INFORMATION

1. Anti-sexual Harassment of Women at workplace

Your Company has adopted a Policy on prevention prohibition andredressal of sexual harassment at workplace under the provisions of Sexual Harassment ofWomen at the workplace (Prevention Prohibition and Redressal) Act 2013 and rules framedthereunder. The Company has anti Sexual harassment Committee to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. During the year under review there was 1complaint received which was investigated and resolved and there were no complaintspending at March 31 2022.

2. Significant or Material Orders passed by the Authority

No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status of the Company and its futureoperations.

3. Material changes and commitments affecting financial position

The Company is providing healthcare services being "essentialservices" there has been no suspension of operation and the Company has taken furthersteps for smooth functioning of its operations during the Covid-19 pandemic. Themanagement has also evaluated impact of this pandemic on its business operations and basedon its review and current Indicators of future economic conditions no material impact isanticipated on the financials of the Company. Due to the temporary suspension of servicesof elective surgeries and travel restrictions of overseas patients for some time during FY2021-22 business operations of the Company are slightly impacted though the same is notlikely to have a continuing impact on the business of the Company in the long run.

AUDITORS

Statutory auditor & auditors' report

Pursuant to Section 139 of the Companies Act 2013 M/s. T. R.Chadha& Co. LLP Chartered Accountants has been appointed as Statutory Auditors of theCompany for a period of 5 consecutive years who holds the office from the conclusion of14th AGM which was held in 2018 till the conclusion of 19th AGM to be held in 2023.

The said Statutory auditors have confirmed that they have not incurredany of the disqualification as mentioned in section 141(3) of the Companies Act 2013 andthe Rules framed thereunder.

During the year the Auditors had not reported any matter under Section143(12) of the Act and therefore no detail is required to be disclosed under Section134(3)(ca) of the Act.

The Statutory Auditor's comment on your company's account for the yearended March 312022 are self-explanatory in nature and do not require any explanation. TheAuditors Report does not contain any qualification or adverse remarks.

Internal auditor

M/s. PricewaterhouseCoopers Services LLP. is the Internal Auditors toconduct internal audit as per agreed scope of works pursuant to the provision of section138 of Companies Act 2013 read with Companies (Accounts) Rules 2014. Internal Auditorspresent their report in every meeting of Audit Committee.

Cost auditors

Pursuant to the provisions of Section 148 of the Companies Act 2013read with Companies (Audit and Auditors) Rules 2014 and Companies (Cost Records andAudit) Rules 2014 M/s. Borad Sanjay B & Associates has been appointed as CostAuditors by the Board of Directors on the recommendation of Audit Committee

for audit of cost records for the year ended on March 312022 and theirremuneration was ratified by members at the 17th Annual 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 applicableprovisions of the Act and Rules framed thereunder and they do not hold anydisqualification under section 139 148 and 141 of the Companies Act 2013 for theirappointment for FY 2022-23. The Board of Directors of the Company re-appointed M/s. BoradSanjay B & Associates for audit of cost records for the year ended on March 31 2023at a remuneration of ' 110000/- plus applicable taxes and reimbursement of out ofpocket expenses incurred if any in connection with the cost audit. The Board ofDirectors of the Company recommended the members for their ratification.

The Company has maintained cost account and records as specified byCentral Government under 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 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014your Company had appointed Mr. Chintan I Patel Practicing Company Secretary (Mem No.53253 PCS No. 20103) to conduct the Secretarial Audit of the Company for the year endedMarch 312022. The Secretarial Audit Report for the FY 2021-22 is annexed to this Reportas Annexure - E. Your Company has also obtained certificate from the secretarial auditorcertifying that none of the directors of our Company has been debarred or disqualifiedfrom being continuing as directors of the Company by SEBI Ministry of Corporate Affairsor such similar statutory authority.

In response to observation made by Secretarial Auditor w.r.t.noncompliance with Minimum Public Shareholding as per regulation 38 of SEBI (ListingObligations and Disclosure Requirements) Regulation 2015 the Board of Directors havenoted that one of the promoters of the Company Shah Family Trust has sold 5810000Equity Shares of the Company representing 5.38% of the total issued and paid up EquityShare Capital of the Company on April 26 2021 ("T day") (for non-retailInvestors only) and April 27 2021 (for Retail Investors and for non-Retail Investors whochoose to carry forward their un-allotted bids) through a separate designated window ofBSE Limited (the "BSE") and National Stock Exchange of India Limited("NSE") in accordance with the "Comprehensive Guidelines on Offer for Sale(OFS) of Shares by Promoters through the Stock Exchange Mechanism" issued bySecurities and Exchange Board of India. The Company is in compliance with Minimum PublicShareholding in terms of regulation 38 and Rule 19(2)(b) of the Securities Contracts(Regulation) Rules 1957 effective from April 27 2021.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation forthe whole hearted support and contribution made by all Doctors nursing/paramedicsespecially in the ongoing COVID-19 pandemic bankers Government Authorities auditors andshareholders during the year under review. Your Directors express their deep sense ofappreciation and extend their sincere thanks to every employee at all level for theirdedicated services and look forward their continued support.

CAUTIONARY STATEMENT

The Board's Report and Management Discussion & Analysis may containcertain statements describing the Company's objectives expectations or forecasts thatappear to be forward-looking within the meaning of applicable securities laws andregulations while actual outcomes may differ materially from what is expressed herein. TheCompany is not obliged to update any such forwardlooking statements. Some importantfactors that could influence the Company's operations comprise economic developmentspricing and demand and supply conditions in global and domestic markets changes ingovernment regulations tax laws litigation and industrial relations.

For and on Behalf of the Board of Directors
Dr. Vikram I. Shah
Date : May 25 2022 Chairman & Managing Director
Place: Ahmedabad DIN :00011653

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