Dear Members,
Your Directors have pleasure in presenting their 33rd Annual Report of Fortis Malar Hospitals Limited ("the Company") along with Audited Standalone and Consolidated Financial Statements and Auditors' Report thereon for the Year ended March 31, 2024.
FINANCIAL RESULTS
The highlights of Consolidated Financial Performance of your Company are as follows:
(Rs in Lakhs)
The highlights of Standalone financial Performance of your Company are as follows:
STATE OF COMPANY'S AFFAIR, OPERATING RESULTS AND PROFITS
Your Company achieved a consolidated total income of ' 65.96 Crores during the current year as against ' 92.59 Crores in the corresponding financial year ended March 31, 2023. EBITDA for the year stood at ' 5.75 Crores compared to ' 11.21 Crores for the previous corresponding year. The Profit / (Loss) after exceptional item and before tax for the period stood at ' 50.01 Crores as against ' (7.01) Crores during the corresponding year. Profit/ (Loss) for the year stood at ' 45.32 Crores in the current financial year compared to ' (15.48) Crores in the previous year.
Regarding the key performance indicators, the Company's average revenue per occupied bed (ARPOB) for the current year stood at ' 183 Lakhs (for 10 months) as against ' 165 Lakhs (for 12 months) in the previous year. The average length of stay (ALOS) was at 3.42 days (for 10 months) in Financial Year 2023-24 compared to 3.85 (for 12 months) days in Financial Year 2022-23. Occupancy of the hospital during the year was at 29% (for 10 months) as compared to 38% (for 12 months) in the previous year.
SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW OPEN OFFER
Pursuant to execution of Share Subscription Agreement dated July 13, 2018 ("SSA"), Northern TK Venture Pte Limited ("NTK" or the "Acquirer"), a wholly owned subsidiary of IHH Healthcare Berhard ("IHH"), subscribed to 23,52,94,117 new equity shares of Fortis Healthcare Limited ("FHL") with a face value of ' 10 each ("Subscription Shares"), constituting approximately 31.1% of the total voting equity share capital of FHL on a fully diluted basis ("Expanded Voting Share Capital") for a total consideration of ' 4,000 Crores and FHL issued and allotted Subscription Shares by way of preferential allotment in accordance with the terms of SSA ("Subscription"). As a consequence of Subscription, the Acquirer together with IHH and Parkway Pantai Limited ("PPL"), collectively made a mandatory open offer, by filing a public announcement dated July 13, 2018 to carry out the following:
A. A mandatory open offer for acquisition of up to 19,70,25,660 equity shares of face value of ' 10 each in FHL, representing additional 26% the Expanded Voting Share Capital of FHL, at a price of not less than ' 170 per share ("Fortis Open Offer") or such higher price as required under the Securities and Exchange Board of India ("SEBI") (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SEBI (SAST) Regulations"); and
B. In light of the acquisition of the controlling stake of FHL, a mandatory open offer for acquisition of up to 48,94,308 fully paid 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"). Malar Open Offer is subject to the completion of the Fortis Open Offer. On April 12, 2024, Malar has declared interim dividend of ' 40 per equity share to its shareholders. Pursuant to such declaration and in terms of Regulation 8(9) of the SEBI (SAST) Regulations, Acquirer and Persons Acting in Concert ("PACs") have decided to adjust Malar Open Offer price from ' 60.10 per equity share to ' 20.10 per equity share.
Thereafter the Hon'ble Supreme Court of India had on December 14, 2018, passed an order ("Status Quo Order") directing "status quo with regard to sale of the controlling stake in Fortis Healthcare to Malaysian IHH Healthcare Berhad be maintained". In light of the Status Quo Order, Fortis Open Offer and Fortis Malar Open Offer were put on hold until further order(s)/ clarification(s)/ direction(s) issued by the Hon'ble Supreme Court of India. Vide its order dated November 15, 2019, the Hon'ble Supreme Court had issued suo-moto contempt notice to, among others, FHL and directed its Registry to register a contempt petition regarding alleged violation of the Status Quo Order ("Contempt Petition").
Petitions before the Hon'ble Supreme Court including Contempt Petition have been disposed of vide judgement dated September 22, 2022 ("Judgement"). No finding of contempt has been made against FHL or its independent directors. Based on legal advice, FHL is of the clear view that the Status Quo Order dated December 14, 2018, no longer exists. IHH/ NTK is simultaneously seeking legal counsel for pursuing and securing the Open Offer.
In the Judgement, Hon'ble Supreme Court has passed certain directions, inter-alia, that the Hon'ble High Court of Delhi may consider issuing appropriate process and appointing forensic auditor(s) to analyse the transactions entered into between FHL and RHT and other related transactions. The stated position of FHL is that these transactions were done in compliance with applicable laws, post requisite corporate and regulatory approvals and necessary disclosures/ announcements. Currently, it is vehemently opposing the application filed by Decree Holder before the Hon'ble High Court for appointment of forensic auditor.
SALE OF BUSINESS OPERATIONS
The Fortis Malar Hospital situated at Gandhi Nagar, Adyar Chennai ("Fortis Malar Hospital"), had been facing certain legacy issues. Over the past few years, with continuous efforts, several of these issues were resolved. However, some of the legacy compliance issues continued to persist, giving rise to certain challenges and constraining further investments into renovating the facility which were essential to run the hospital optimally thus resulting in a deteriorating business performance. The Board of Directors evaluated the available options and concluded that the aforesaid issues accentuated the need for the Company to undertake divestment of its hospital business operations pertaining to Fortis Malar Hospital. It was further concluded that such divestment was in keeping with the strategy of Fortis Healthcare Limited (as the largest and majority shareholder of the Company) which had approved a policy on selected portfolio rationalisation to focus on selected geographic clusters where the parent company had a sizable presence.
• Accordingly, the divestment of the hospital business was considered the most prudent option after considering all options.This was only decided after the Board of Directors, had evaluated all potential options. In doing so, the Board in discharge of their fiduciary duties had undertaken due care and diligence, prior to arriving at its decision in respect of the divestment of the Company's business operations pertaining to the Fortis Malar Hospital. Further, the Board of Directors appointed financial advisors and legal advisors for the purposes of the transaction with a view to devise a composite divestment plan (including the related land and building assets of the Fortis Malar Hospital), and to complete the transaction in accordance with applicable law and by following due process.
Against this backdrop, during the year under review, the Board of Directors of the Company decided to divest business operations pertaining to Fortis Malar Hospital to MGM Healthcare Private Limited ("MGM"), a prominent healthcare delivery service provider, for a sale consideration of ' 45.72 Crores (including Positive Net Current Asset adjustment of ' 0.22 Crores). MGM was selected as the acquirer pursuant to a bid process undertaken by the Company for the purposes of the divestment transaction. The Company and MGM entered into a business transfer agreement for the purposes of the divestment transaction on November 24, 2023. As part of this composite transaction, the remaining business operations related to the Fortis Malar Hospital (including the land and building) and the adjacent land parcels were also divested by two wholly owned subsidiaries of Fortis Healthcare Limited, viz. Fortis Health Management Limited and Hospitalia Eastern Private Limited to MGM - and accordingly the Fortis Malar Hospital stands fully divested in favour of MGM. The shareholders of the Company also accorded their approval for this transaction on January 4, 2024.
• The transaction was consummated on February 1, 2024 and the sale proceeds, as per the terms and conditions of the business transfer agreement entered with MGM, have been realized by the Company. Pursuant to the consummation of the transaction, the entire business operations of the Company pertaining to Fortis Malar Hospital (including manpower, assets and liabilities related to the business) were transferred to MGM effective February 1, 2024.
• Post the divestment, the Company continues to exist as a listed entity but has ceased to have any business operations. The Board of the Company, in discharge of its fiduciary duty and in furtherance of its assurance to its shareholders that available surplus funds of FMHL (post the divestment) would be distributed in the most optimal and efficient manner, had approved the distribution of an interim dividend of ' 40 per share on April 12, 2024.
> Furthermore, post the transaction closure and the distribution of interim dividend, there remained a further available surplus for distribution as dividend. The Board in its meeting held on May 17, 2024, declared a final dividend of ' 2.5 per share subject to shareholders' approval in the AGM to be held on July 31, 2024. This would take the total dividend to ' 42.5 per share during the period.
Post the distribution of such final dividend (subject to shareholders' approval), the remaining cash and cash equivalents would be used for the purposes of meeting the Company's general liquidity and to pay for undertaking legal/regulatory compliances in respect of the Company, including addressing any third-party claims and potential liabilities.
• It is also important to note that as per applicable law, the pending open offer by IHH Healthcare Berhad (parent company of Northern TK Venture Pte. Limited, which is the promoter of Fortis Healthcare Limited), to the Company's shareholders which was at ' 60.1 per share stands reduced to ' 20.1 per share. This was also duly disclosed in the stock exchange disclosure dated April 18, 2024 by the Company.
• The Board of Directors of the Company is continuously monitoring the disposal of pending medico legal, tax and civil cases and the functioning of the Company in due compliance with the applicable law. Having undertaken distributions to shareholders to the maximum extent feasible, and having accounted for the Company's general liquidity, payments for legal/regulatory compliances and potential liabilities - the Board of Directors will continuously evaluate legally permissible mechanisms with a view to ensure that the Company's and its subsidiary's future course is in the best interests of all stakeholders involved, in line with the highest standards of corporate governance, while taking into account relevant considerations including inter alia the ongoing open offer in respect of the Company.
• Upon recommendation of final dividend on May 17, 2024 by the Board, the Company had exhausted its free reserves for the purposes of distribution to the shareholders. For the purposes of meeting its ongoing expenses in relation to the running of the Company as well as for other contingencies, indemnification obligations (if any) that may arise vis-a-vis MGM, the balance cash and cash equivalent with the Company as on the date of declaration of final dividend is approx. ' 31 Crores.
DIVIDEND AND TRANSFER TO RESERVES
During the financial year, the Company has not transferred any amount to General Reserves.
Post divestment the Company doesn't have any business operations and the proceeds of the sale consideration would be distributed among the shareholders of the Company in such forms and manners, in compliance with the applicable laws as maybe amended from time to time, as the Board will consider necessary and in best interest of the shareholders of the Company.
In view of the above the Board has declared & paid an interim dividend of ' 40 per share on the fully paid up 1,87,41,759 equity shares amounting to ' 74,96,70,360 (Rupees Seventy Four Crores Ninety Six Lacs Seventy Thousand Three Hundred and Sixty Only) in the meeting of Board of Directors held on April 12, 2024 (adjourned from April 8, 2024).
Further, the Board in its meeting held on May 17, 2024 has also recommended a final dividend of ' 2.50 per share on the fully paid up 1,87,41,759 equity shares amounting to ' 4,68,54,397.50 (Rupees Four Crore Sixty Eight Lacs Fifty Four Thousand Three Hundred Ninety Seven and Fifty Paise) subject to the approval of the shareholders in the ensuing AGM and if approved, the same shall be paid within stipulated timelines.
Thereafter, upon the payment of this final dividend, the Company would exhaust its free reserves for the purposes of distribution to the shareholders and shall be utilizing the remaining funds to meet its ongoing expenses in relation to the running of the Company as well as for contingencies, if any.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of FY 2023-24 and date of this report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company maintained an internal control system designed to commensurate with the nature of business and complexity of operations. It was monitored by the management to provide reasonable assurance on the achievement of objectives, effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. With the divestment of operations of the Company, Internal Control framework is now realigned to commensurate the residual operations of the Company.
DETAILS OF SUBSIDIARY
During the year under review, your Company has only one subsidiary Company i.e. Malar Stars Medicare Limited. Main object of the said wholly-owned subsidiary Company includes setting up, managing / administering hospital(s) and to provide Medicare and Healthcare services.
The Board of Directors has adopted a policy for determining "material subsidiary" pursuant to Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said policy is available at https://fortismalarhospital. com/investor-relations/investorcatdetails/corporate-governance/ policies-and-other-documents
Basis the Consolidated Audited Financial Statements of the Company for FY 2023-24, your Company has no "material subsidiary" in terms of the said policy and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY
Consolidated financial statements of your Company and its subsidiary, prepared in accordance with applicable Indian Accounting Standards as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013, forms part of the Annual Report. In terms of Section 136 of the Companies Act, 2013, financial statements of the subsidiary Company will be provided to any shareholder of the Company who asks for it and said financial statements will also be kept open for inspection at the registered office of the Company and that of subsidiary. Performance and financial position along with contribution of the subsidiary to the overall performance of your Company which also included in the Consolidated Financial Statements of the Company is enclosed herewith as "Annexure-I" in the prescribed format in Form AOC-1.
LOANS / ADVANCES / INVESTMENTS / GUARANTEES
Particulars of loans / advances / investments / guarantees given and outstanding during FY 2023-24 are mentioned in notes to financial statements.
PUBLIC DEPOSITS
During the year under review, your Company has not invited or accepted any deposits from the public pursuant to the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014.
AUDITORS
1. STATUTORY AUDITORS
The Board of Directors, considering the size and requirement of the Company, approved the appointment of M/s B S R & Co. LLP, Chartered Accountants (Registration No. 101248W/W-100022), upon recommendations of Audit and Risk Management Committee, for a period of five years to conduct statutory audit of the Company for the Financial Years commencing from April 01, 2019 to March 31, 2024. The said appointment was approved by the shareholders at their 28th Annual General Meeting, accordingly they hold the office of statutory auditor from 28th Annual General Meeting until the conclusion of 33rd Annual General Meeting to be held in year 2024.
Further, the Board of Directors has recommended the re-appointment of M/s. B S R & Co. LLP, Chartered
Accountants, who shall hold office of the Statutory Auditors from the conclusion of Thirty Third (33rd) Annual General Meeting until the conclusion of Thirty Seventh (37th) Annual General Meeting to be held in the year 2028 and shall conduct the Statutory Audit for the financial years commencing from April 1, 2024 to March 31, 2028 at such remuneration plus out of pocket expenses and applicable taxes and other terms and conditions as may be mutually agreed with the Statutory Auditors.
The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. However, Emphasis of matter is drawn to Note 2 (b) to the standalone financial statements which explains that consequent to sale of business operations through a slump sale transaction, the Company ceases to have any business operations. While there is no visibility of commencing any new business operations in the future, the Company's management and Board of Directors is currently evaluating various corporate restructuring options for the future possible course of actions for the Company. However, the Company believes that it has sufficient cash and cash equivalent to settle its obligations as and when they fall due, and it believes that it would be able to meet its financial requirements for the foreseeable future based on the current cash position and projected cash flows. Accordingly, these standalone financial statements have been prepared on a going concern basis.
2. COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the relevant rules made thereunder or any amendments thereof, the Company is required to maintain cost records and accordingly such accounts and records are made and maintained by the Company in respect of its hospital activity and the same is also required to be audited. Your Board had, upon the recommendation of the Audit & Risk Management Committee, appointed M/s Jitender, Navneet & Co., Cost Accountants to audit the cost accounts of the Company for FY 2023-24 at a remuneration up to ' 75,000 (Rupees Seventy Five Thousand) plus taxes and out-of-pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the members in a general
meeting for ratification. Accordingly, a resolution seeking member's ratification for the remuneration payable to M/s Jitender, Navneet & Co., Cost Auditors is included in Notice convening ensuing Annual General Meeting.
3. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Mukesh Agarwal & Co., Practicing Company Secretary to undertake the Secretarial Audit of the Company. It is hereby confirmed that the Company has complied with the provisions of SS-1 i.e. Secretarial Standard on meetings of Board of Directors and SS-2 i.e. Secretarial Standard on General Meetings. The Report of the Secretarial Auditor for the FY 2023-24 does not contain any qualification, reservation or adverse remark and it is annexed herewith as "Annexure-II".
4. INTERNAL AUDITORS
Consequent to the resignation of Mr Rajiv Puri from the position of Chief Internal Audit and Risk Officer of the Company w.e.f. August 31, 2023. and upon the recommendation of the Audit & Risk Management Committee, the Board of Directors of the Company has appointed Mr Sanjay Baweja as Chief Internal Audit and Risk Officer of the Company w.e.f. May 17, 2024 and authorized him to engage independent firms for conducting the internal audit of the Company.
For FY 2023-24, Internal Audit(s) were performed in accordance with the Internal Audit plan approved by the Audit & Risk Management Committee. Taking cognizance of the disinvestment made by the Company with effective date of February 01,2024, Internal Audit of the Company is realigned for carrying out an annual Internal Audit of the entity with the objective of evaluating internal controls over financial reporting and other residual transactions.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
During FY 2023-24, there was no significant material order passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
CHANGE IN THE NATURE OF BUSINESS
During FY 2023-24 the Company has transferred its business operations to the MGM Healthcare Private Limited. Consequent to the sale of business operation, the Company ceases to have business operations.
STOCK OPTIONS AND CAPITAL STRUCTURE
During the year under review, the Company has not granted any options under "Malar Employees Stock Option Plan, 2008" ("ESOP Scheme").
Further, pursuant to the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEBS) Regulations"), as amended from time to time, the Nomination & Remuneration Committee of the Company, inter-alia, administers and monitors the ESOP Scheme of the Company.
As on March 31, 2024 Company does not have any outstanding stock options as the same has already been unexercised and thereafter, lapsed in earlier financial years.
Pursuant to the provisions of the SEBI (SBEBS) Regulations, the details of stock options as on March 31, 2024 under the "Malar Employees Stock Option Plan 2008" is available at the website of the Company at https://fortismalarhospital.com/investor-relations/ investorcatdetails/agm-documents.
The certificate from the Secretarial Auditors of the Company stating that the Schemes have been implemented in accordance with the SEBI (SBEBS) Regulations would be placed at the Annual General Meeting for inspection by members. The details pertaining to shares in suspense account are specified in the report of Corporate Governance forming part of the Board 'Report.
The Company has not made any provision of money for purchase of, or subscription for, its own shares or of its holding Company.
During the FY 2023-24, there was no change in capital structure of the Company.
ANNUAL RETURN
The Annual Return of the Company in Form MGT- 7 in accordance with Section 92(3) of the Companies Act, 2013 is available on the website of the Company at Investor Relations - Fortismalarhospital.com
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Particulars required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, regarding Conservation of Energy, Technology Absorption and Foreign Exchange is given in "Annexure-III", forming part of this Board's Report.
CORPORATE SOCIAL RESPONSIBILITY
During the year under review, your Company did not have any obligation to make CSR contribution, hence, no initiatives have been taken during the year. Further, the disclosure as required under Section 134(3)(o) of the Companies, Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 is not applicable.
The policy as approved by the Board is available on the Company's website at https://fortismalarhospital.com/investor- relations/investorcatdetails/corporate-governance/policies-and- other-documents.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr Daljit Singh, Director is liable to retire by rotation at the ensuing Annual General Meeting and has offered himself for re-appointment. On the recommendation from Nomination & Remuneration Committee, the Board has recommended his re- appointment as a director liable to retire by rotation. As required under Regulation 36 of Listing Regulations and Secretarial Standard information or details of Mr Daljit Singh are provided in the Notice convening the ensuing Annual General Meeting.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI (Listing Agreement and Disclosure Requirements) Regulations, 2015. Further, no director of the Company was disqualified to become/continue as Director of the Company, in terms of the provisions of the Companies Act, 2013 and the rules made thereunder.
Mr Ravi Rajagopal was appointed as Independent Directors on the Board of the Company w.e.f. October 23, 2019 for a period of 5 years, pursuant to the approval of the members by postal ballot on June 13, 2020, in accordance with the provisions of Section 149, 150, 152 read with schedule IV and other applicable provisions of the Companies Act, 2013 ("the Act") and the Companies (Appointment and Qualification of Directors) Rules, 2014 and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). He holds office as Independent Director of the Company up to October 22, 2024 ("first term" in line with the explanation to Sections 149(10) and 149(11) of the Act).
Accordingly, the Board, based on the performance evaluation of Mr Ravi Rajagopal and as per the recommendation of the Nomination & Remuneration Committee, considering that, given his background, experience and contributions made by him during his first tenure, the continued association of Mr Ravi Rajagopal, would be beneficial to the Company and it is desirable to continue to avail his services as Independent Directors. Therefore, the Board of Directors in its meeting held on May 17, 2024 considered & recommended the re- appointment of Mr Ravi Rajagopal as Independent Director for a second term of 5 consecutive years, not liable to retire by rotation, with effect from October 23, 2024 upto and including October 22, 2029, which is forming part of the Notice of this AGM.
It is hereby informed that the members of the Company in terms of the provisions of Section 196, 203, Schedule V and other applicable provisions of the Companies Act, 2013 read with the rules made thereunder (the Act) and Listing Regulations had appointed Mr. Chandrasekar R. as Whole-time Director of the Company w.e.f. January 11,2022 for a period of 3 consecutive years. Accordingly, his tenure as Whole-time Director will expire w.e.f. January 10, 2025.
Accordingly, Board of Directors of the Company, based on recommendation of Nomination & Remuneration Committee and subject to the approval of shareholders of the Company has appointed and recommended the appointment of Mr Chandrasekar Ramaswamy (DIN: 09414564) as "Whole- time Director" of the Company for a period of three (3) years with effect from January 11,2025, on the terms and conditions as set in the Notice of this AGM.
Further, after the closure of FY 2023-24 Mr Ramesh L. Adige was appointed as additional director designated as "Non- Executive Non-Independent Director" of the Company for a period of one (1) year w.e.f May 6, 2024 upto May 5, 2025 whose regularization at the ensuing AGM shall be forming part of the notice thereof for shareholders' approval.
There is no inter-se relationship between the Board Members.
During the year under review, Mr Sandeep Singh has resigned as the Company Secretary & Compliance Officer of the Company w.e.f. February 29, 2024. Post closure of the Financial year under review the Board has appointed Ms Srishty as Company Secretary & Compliance Officer of the Company w.e.f. May 17, 2024.
During the year under review, 10 (Ten) meetings were held by the Board of Directors. Details of Board/ Committee meetings held and attendance of Directors are provided in the Corporate Governance Report forming part of the Annual Report.
Disclosures regarding the following are also mentioned in report on Corporate Governance:
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 the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board and its respective committees are required to carry out performance evaluation of the Board as a body, the Directors individually, Chairman as well as that of its Committees.
In view of the aforementioned provisions, a well structured questionnaire, covering various aspects of the functioning of the board and its committees, adequacy of the constitution and composition of the Board and its committees, matters addressed in the Board, processes followed at the meeting, frequency of meetings of the Board and its committees, long- range strategic thinking and planning etc., is in place.
Likewise, for evaluation of each individual Director's performance including the Independent Directors, a questionnaire covering various aspects like, Knowledge of key areas, effective interaction with others, competency to bring knowledge and experience, Quality and Value contribution, resolute in holding views and communication, etc., was circulated to the Board for the evaluation purpose of respective directors.
Accordingly, the Board members submitted their response for evaluating the entire Board, respective committees of which they are members and of their peer Board members, including Chairman of the Board.
Thereafter, the same was duly placed before the Board of Directors for noting.
MANAGERIAL REMUNERATION
Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as under: -
a) Comparison and ratio of the remuneration of each director to the median remuneration of the employees of the Company for FY 2023-24
(Amount in Rs)
Chandrasekar
Ramaswamy
b) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, during the financial year under review
* Resigned w.e.f February 29, 2024.
c) The percentage increase in the median remuneration of employees in FY 2023-24 is 8.13% (15.2% in the last year).
d) The number of permanent employees on the rolls of Company is 1 as on March 31, 2024.
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.
f) Salary details along with the variable component and other benefits of the remuneration being paid to directors are detailed below:
Incentives
Benefits
* None of the other Directors was paid any remuneration, except sitting fees and the fees paid for services rendered in the professional capacity.
g) Remuneration has been paid to Directors and KMPs as per Board Governance Document / the Remuneration Policy of the Company:
Remuneration Policy:
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a remuneration policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director etc. and the same is also available on the website of the Company at https://fortismalarhospital.com/ investor-relations/investorcatdetails/corporate-governance/ policies-and-other-documents.
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 employees of the Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Board Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office and / or Corporate Office of the Company during business hours between 10.00 am to 12.00 noon on working days (Except Saturday) of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
RELATED PARTY TRANSACTIONS
Disclosures as required under Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in "Annexure-V" in Form AOC-2 as specified under the Companies Act, 2013.
All Related Party Transactions were placed before the Audit & Risk Management Committee for approval as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Prior omnibus approval of the Audit & Risk Management Committee was obtained for the transactions which were of foreseeable and repetitive nature. The transactions entered into pursuant to such omnibus approval so granted are audited and a statement giving details of all related party transactions was placed before the Audit & Risk Management Committee on a quarterly basis.
The Company has formulated a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website and the same is available at https://fortismalarhospital.com/ investor-relations/investorcatdetails/corporate-governance/ policies-and-other-documents.
None of the Directors has any pecuniary relationship or transaction vis-a-vis the Company, except to the extent of sitting fees and the fees paid for services rendered in the professional capacity and remuneration approved by the Board of Directors and as disclosed in this Annual Report.
RISK MANAGEMENT FRAMEWORK
The Company has designed a risk management framework for risk identification, assessment, mitigation plan development and monitoring of action to mitigate the risks. This framework enables the management to develop and sustain a risk-conscious culture, wherein, there is a high degree of organisation-wide awareness and understanding of external and internal risks associated with the business. The framework promotes risk ownership, accountability, self-assessment and continuous improvement to minimize adverse impact on achievement of business objectives and enhance the Company's competitive advantage. The details thereof are covered under the Management and Discussion Analysis Report which forms part of the Annual Report.
POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT
Your Company has adopted a policy for Prevention, Prohibition and Redressal of sexual harassment. We have not received any complaint during the FY under review relating to sexual harassment hence there was no complaint pending as on March 31, 2024. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The same may also be read in terms of Companies (Accounts) Rules, 2014.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.
CODE OF CONDUCT
Declaration by Mr Chandrasekar Ramaswamy, Whole-time Director, confirming compliance with the 'Code of Conduct' is enclosed with Corporate Governance Report.
REPORT ON CORPORATE GOVERNANCE
Your Company continues to place greatest emphasis on managing its affairs with diligence, transparency, responsibility and accountability. Your Company is committed to adopting and adhering to the best Corporate Governance practices recognized globally. Your Company understands and respects its fiduciary role and responsibility towards stakeholders and the society at large and strives hard to serve their interests, resulting in 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 the section titled "Report on Corporate Governance" forming part of this Annual Report.
Certificate of M/s. Mukesh Agarwal & Co., Company Secretary in Whole-time Practice, regarding compliance with the Corporate Governance requirements as stipulated in Clause E, Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed with the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
a) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards has been followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for financial year ended March 31, 2024 and of the loss/ profit of the Company for the said period;
c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to the Central Government, State Governments and all other Government agencies for the assistance, co-operation and encouragement they have extended to the Company.
Your Directors also take this opportunity to extend a special thanks to the medical fraternity and patients for their continued co- operation, patronage and trust reposed in the Company.
Your Directors also greatly appreciate the commitment and dedication of all the employees at all levels, that has contributed to the growth and success of the Company. Your Directors also thank all the strategic partners, business associates, Banks, financial institutions and our shareholders for their assistance, co-operation and encouragement to the Company during the year.