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Your Directors have pleasure in presenting here the Nineteenth Annual Report of your Company along with the Audited Standalone and Consolidated Financial Accounts and the Auditors' Report thereon for the Year ended March 31, 2015. Rs. 1,742 Million, overall revenues for the Company stood at Rs. 41,401 Million compared to Rs. 47,593 Million in Financial Year 2013–14.
Consolidated total income (including other income) from the continuing operations for the Financial Year 2014–15 was at Rs. 40,617 Million compared to Rs. 36,593 Million in the previous year. Operating profit for the year stood at Rs. 2,265 Million compared to Rs.2,195 Million in the previous year. The Net Profit after Tax but before Profits attributable to Minority Interest and Share in the profits of Associates for the continuing operations stood at Rs. (1,641) Million as against Rs. (2,293) Million for the corresponding previous year. The Net Profit after Tax but before Profits attributable to Minority Interest and Share in the profits of Associates from discontinued operations stood at Rs. (255) Million as against Rs.3,459 Million for the corresponding previous year. The Net profit for the year (including both continuing and discontinuing operations) was Rs. (1,437) Million against Rs. 1,225 Million in the previous year.
Your Company continues to endeavor to offer high quality affordable healthcare services to its patients & the general public. It has, during the year, commissioned a number of new medical programs and specialties in various facilities & has made considerable progress in strengthening its medical offerings in Oncology, Gastroenterology & Hepatobiliary science, Sports Othropedics & Arthroscopy, integrated orthopedics & Spine and dermatology & cosmotelogy. With steadfast focus on patient centricity & clinical excellence your Company strives to bridge the huge demand–supply gap prevalent in healthcare delivery services in the country & continues to undertake a number of growth & development ambitions across the organisation.
As of March 31, 2015, the healthcare verticals of the Company primarily comprise day care specialty, diagnostics and tertiary and quaternary care. As of March 31, 2015, the Company had a network of 54 healthcare facilities (including projects under development), with approximately 4,700 operational beds and the potential to reach over 9,000 beds. In India, the Company is one of the largest private healthcare chains comprising a network of 52 healthcare facilities, including 32 operating facilities,
14 satellite and heart command centres located in public and private hospitals and 6 healthcare facility projects which are under development or are greenfield land sites. In addition, its Indian diagnostics business has a presence in over 450 cities and towns, with an established strength of 264 laboratories including 131 self–operated laboratories, 27 laboratories located in Fortis healthcare facilities, 21 wellness centres and 3 international laboratories. It also has over 6,400 collection points, which includes 68 collection centers that are owned and 59 collection centres at locations outside India. Your Company is driven by the vision of becoming a global leader in the integrated healthcare delivery space and the larger purpose of saving and enriching lives through clinical excellence.
Further, there are no significant material order passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations and there is no change in the nature of the business of the Company.
DIVIDEND AND TRANSFER TO RESERVES
Keeping in view the losses for the year under review, the Board of Directors of your Company has not recommended any dividend for the Financial Year 2014–15. Accordingly, there has been no transfer to general reserves.
MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR 2014–15 AND THE DATE OF THE REPORT
• SRL Reach Limited became a wholly owned subsidiary of SRL Limited w.e.f. May 1, 2015.
• The Company (through its step down subsidiary Fortis Healthcare International Pte. Ltd) has sold its entire equity stake in Fortis Healthcare Singapore Pte Ltd for a total consideration of
SGD 55 Million in April 2015.
• The Company (through its step down subsidiary Fortis Healthcare International Pte. Ltd) has sold its entire equity stake in Radlink Asia Pte Ltd and its subsidiaries for a total consideration of SGD 111 Million in May 2015.
• As per the agreed issue terms, the Company has redeemed on due date the outstanding USD 100 million 5% Foreign Currency Convertible Bonds (FCCBs) listed on Luxembourg Stock Exchange.
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.
DETAILS OF SUBSIDIARY/ JOINT VENTURES/ASSOCIATE COMPANIES
During the year under review:
• Fortis Healthcare Australia Pty Ltd, one of the step–down subsidiary of the Company has been deregistered w.e.f. October 22, 2014;
• Fortis Hospitals Limited, one of the subsidiary of the Company has acquired the entire shareholding of M/s. Birdie & Birdie Realtors Private Limited (w.e.f. May 6, 2014) together with the possession and full control of the entire assets and properties of the said company having a total enterprise value of the of X 250 crore, making it a step down subsidiary of your Company; and
• The Company has incorporated one subsidiary viz. Fortis CSR Foundation on September 22, 2014 to undertake CSR activities as specified in Schedule VII to Companies Act, 2013.
Further note that your Board of Directors have adopted a policy for determining "material subsidiary" pursuant to Clause 49 V D of Listing Agreement entered with Stock Exchanges. The said policy is available at <http://cdn.fortishealthcare.com/pdf/> Policy on material nonlisted company.pdf.
In terms of the said policy, Fortis Hospitals Limited (FHsL) is considered as a Material Subsidiary and accordingly all necessary compliances have been carried out including but not limited to appointment of Independent Director from the Board of Fortis Healthcare Limited on the Board of FHsL.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with applicable accounting standards, issued by the Institute of Chartered Accountants of India, forms part of the Annual Report. In terms of the Section 136 of the Companies Act, 2013, financial statements of the subsidiary companies are not required to be sent to the members of the Company. The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and said annual accounts will also be kept open for inspection at the registered office of the Company and that of subsidiary. Performance and financial position of each of Subsidiaries, Associates and Joint Ventures included in the Consolidated Financial Statements of the Company is annexed herewith as Annexure–I in the prescribed format (Form AOC–1).
Particulars of Loans/Advances/Investments given and outstanding during the Financial Year 2014–15 are mentioned in Notes to Financial Statements.
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 Companies
Acceptance of Deposit) Rules, 2014 and therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as of the date of Balance Sheet.
M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of your Company, will retire at the conclusion of the ensuing Annual General Meeting. It is proposed to appoint M/s. Deloitte Haskins & Sells LLP as Statutory Auditors of the Company for a period of 5 years.
The Company has received a letter dated July 28, 2015 from them to the effect that their appointment, if made, would be within the limit prescribed under Section 139 of Companies Act, 2013, and that they are not disqualified for such re–appointment within the meaning of Section 141 of the Act.
Based on the recommendations of the Audit and Risk Management Committee, the Board of Directors of the Company proposes the appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants, as the Statutory Auditors of the Company at the ensuing Annual General Meeting of the Company.
The existing Statutory Auditors have, in their report to the Board of Directors on the Financial Statements of the Company made the following comments which are self explanatory and are categorised as "Matter of emphasis", hence no comments in this regard has been offered by your Board of Directors:
(a) Attention is drawn to Note 12(i) and (ii) and 11(A) & (B) to the consolidated financial statements regarding matters relating to tax demands and termination of certain land leases allotted by Delhi Development Authority (DDA) respectively against one of the subsidiaries ("Escorts Heart Institute and Research Centre Limited") more fully described therein. Based on the advice given by the external legal counsel, no provision /adjustment has been considered necessary by the Group in this regard in the consolidated financial statements. Our opinion is not qualified in respect of these matters.
(b) Attention is drawn to Note 11(C) to the consolidated financial statements regarding non–compliance with the order of Hon'ble High Court of Delhi in relation to provision of free treatment/ beds to poor by one of the subsidiaries ("Escorts Heart Institute and Research Centre Limited") more fully described therein. Based on legal opinion, no provision/ adjustment has been considered necessary by the Group in this regard in the consolidated financial statements. Our opinion is not qualified in respect of this matter.
(c) Attention is drawn to Note 11(D) to the consolidated financial statements, relating to the order of Navi Mumbai Municipal Corporation (NMMC), received by one of the subsidiaries ("Hiranandani Healthcare Private Limited"), concerning alleged contravention of the provisions of Bombay Nursing Home Registration (Amended) Act, 2005 and more fully described therein. Based on the advice given by the external legal counsel, no provision/ adjustment has been considered necessary by the Group in this regard in the consolidated financial statements. Our opinion is not qualified in respect of this matter.
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its hospital activity is required to be audited. Your Directors had, on the recommendation of the Audit and Risk Management Committee, appointed M/s. Jitender, Navneet & Co., Cost Accountants to audit the cost accounts of the Company for the Financial Year 2014–15 at a remuneration of X 2.30 lac (plus out of pocket expenses and taxes). As required under the Companies Act, 2013, the remuneration payable to the cost auditors 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 at Item No. 7 of the Notice convening the Annual General Meeting.
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 Dr. K. R. Chandratre, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure II".
The Secretarial Auditor in his report to the Board of Directors of the Company made the following comments:
"The company has paid remuneration of X 5,32,43,061 to Mr. Malvinder Mohan Singh, Chairman & Whole time Director, without the prior approval of Central Government and an application for approval made to the Central Government is pending."
The Company has applied to the Central Government for variation in remuneration of Mr. Malvinder Mohan Singh, Executive Chairman for the Financial Year 2014–15 and 2015–16. The Nomination and Remuneration Committee of the Company has approved payment of remuneration subject to/ pending Central Government's approval. In line with provisions of Companies Act, 2013, Mr. Malvinder Mohan Singh has given an undertaking that in case Company doesn't receive Central Government approval or if approval is accorded for a lesser amount he would be refunding back the excess to the Company.
Upon the recommendation of the Audit and Risk Management Committee, the Board of Directors has appointed Mr. Rajiv Puri, Head Risk and Internal Audit as the Chief Internal Auditor of the Company and authorized him to engage independent firms for conducting the internal audit for the Financial Year 2014–15. Accordingly, M/s. Axis Risk Consulting Services Private Limited, KPMG and Pricewaterhousecoopers Private Limited were engaged to perform Internal Audit for the Company.
CAPITAL STRUCTURE/STOCK OPTION
The Company currently manages its stock options through "Employee Stock Option Plan 2007" and "Employee Stock Option Plan 2011" ("Schemes") as approved by the shareholders. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Schemes of the Company. Each option when exercised would be converted into one fully paid up equity share of X 10 each of the Company. During the year under review, 2,40,000 options were granted by the Company under ESOP 2011. Further, another grant of 1,00,000 stock options have been made under ESOP 2011 in the Financial Year 2015–16, till date. Disclosure pursuant to the securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 for the year ended March 31, 2015 is available at <http://www.cdn>. fortishealthcare.com/0.90949600_1439359342_ ESOP–Disclosure_2014–15.pdf and forms part of this Directors Report.
During the year under review, under the terms of the "Employee Stock Option Plan 2007", 21,500 stock options were exercised and the Company has allotted 19,100 equity shares of X 10 each till March 31, 2015. The balance 2400 stock options were allotted during the Financial Year 2015–16.
The certificate from the Statutory Auditors of the Company stating that the Schemes have been implemented in accordance with the SEBI Guidelines would be placed at the Annual General Meeting for inspection by members.
The Company has not made any provision of money for purchase of, or subscription for, its own shares or of its holding Company.
Details pertaining to shares in suspense account are specified in the report of Corporate Governance forming part of the Board Report. Extract of Annual Return is annexed herewith as Annexure III.
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 and Technology Absorption, is given in Annexure IV, forming part of the Board Report. Further, details pertaining to Foreign Exchange Earnings and Outgo forms part of the Financial Statements.
CORPORATE SOCIAL RESPONSIBILITY
I Ethos — As a Social Enterprise
The concept of public service is deeply embedded in the very fabric of Fortis since its inception and is enshrined in the words of our founding Chairman Dr. Parvinder Singh whose vision was, 'to create a world class integrated healthcare delivery system, entailing the finest medical skills combined with compassionate patient care'. There can be no larger calling or purer intent than to serve mankind and alleviate human suffering. We are indeed fortunate that this philosophy is so entwined and fundamental to the very nature of our business of healthcare.
Community service is therefore not new to us. Ever since Fortis was set up in 2001, we have continually endeavored to provide access to quality healthcare for all. While the story of India's economic growth is remarkable, equally obvious are its socio–economic problems such as poverty, illiteracy and the lack of healthcare. As a company focused on healthcare we believe we can play a role in bridging the gap between the privileged and the less privileged to make a profound impact on the well–being of the community. In order to do this in a sustainable manner, we have created a robust model of corporatized healthcare that is self– sufficient, viable and for–profit, such that while we serve the interests of our stakeholders, we do it in a manner that also furthers a social need.
II An Enabling Social Enterprise Model
Corporate Social Responsibility efforts at Fortis are varied and leverage our core competencies and experience (organizational and that of the people who we employ) linked to healthcare and seek to provide access to those who need it the most and at a significantly reduced / subsidized cost. We also support awareness campaigns, provide facilities for the aged, organize health camps, and have instituted a number of healthcare training programs' and patient support groups. Our social responsibility programs' are implemented through the Fortis Charitable Foundation (FCF). At a macro level if one looks back at the last decade of our work we are proud to have contributed towards:
a. Building Competencies and Capacity
Our contributions have been directed at creating and building competencies and capacity in the healthcare space in the country. This is particularly noteworthy in an era of tremendous shortages. Establishing a network of large hospitals across the country, we have been instrumental in providing an environment conducive for medical work and have successfully created an ecosystem where many healthcare professionals have found it possible to pursue their career aspirations and even more importantly for those who had gone overseas for lack of adequate opportunities to return to the country. This brain gain and reverse flow of talent has also led to global learning's and best practices being applied locally. Equally, our experts have enjoyed the satisfaction of working on cutting edge technologies and performing the latest procedures back home in their own country.
Having created such platforms for knowledge exchange, Fortis has become the training ground for many of the country's finest doctors, nurses, medics, paramedics and hospital support staff. They continue to carry on the good work, today in virtually every nook and corner of the country, providing medical care to an ever–growing population. Changing society in a very profound way and making it healthier.
b. Partnerships for Social change
Fortis has been conceived with the mission of bringing the fruits of modern healthcare to an ever widening population base in the country. A healthier population has direct linkages to productivity gains, the state of the economy and to a society that is better off as a result. Scalability and accelerating this positive change in an environment which offers tremendous headroom for further improvement therefore is crucial to our game–plan. With this in mind we have been busy creating a network of like–minded partners who are possessed with a similar mission of bettering the health status of our fellow countrymen. These linkages are vital. Our ecosystem today is much enlarged and we hope this will create a multiplier effect as industry bodies like NATHEALTH through which we have been able to enlist the support of numerous pharmaceutical companies, diagnostic firms and medical equipment manufacturers join our common efforts to improve overall health and provide succor to the needy.
c. Industry Standards and Protocols
On the clinical side with a view to setting benchmarks and improving healthcare delivery we have pushed for JCI accreditations at many of the Fortis hospitals so that medical facilities, protocols and outcome expectations can be standardized and benchmarked with the best available globally. Our work process, protocols and standards of care and patient experience set the benchmark and spur many other aspiring medical establishments in the country to upgrade, emulate and adopt, the standards, lifting the state of the industry as a whole.
THE JOURNEY SO FAR – A SOCIALLY RESPONSIBLE ENTERPRISE
At a more granular level Fortis is a forerunner in supporting and promoting social charitable healthcare. Over the past decade, we have established ourselves as an institution dedicated not only to high quality treatment but to capacity building and dissemination of medical information, supporting a range of stakeholders. Our work has enabled us to mobilize resources, provide guidance, set protocols and standards and above all lead the way as a healthcare provider.
As we pioneer the development of corporatized healthcare delivery models we are also acutely aware of our position as a member of society and in this regard have continuously driven programs and initiatives leading social awareness and change. While all of these initiatives are difficult to mention some core areas include:
MOTHER AND CHILD
Fortis aims to contribute towards a "healthy Nation through healthy youngsters" who will be the future of tomorrow. Our programs have focused on the health of the Mother & Child.
Amongst our numerous mother and child programs, a few deserve special attention.
Under our Congenital Heart Disease program, Fortis has collaborated with multiple partners, conducting over 4500 surgeries for children born with congenital heart defects. This transformative intervention provided children the chance to lead a normal life. The Fortis Foundation has also committed to support Operation Smile, another initiative in transformative intervention for children who are born with a cleft lip/palate. The support helps provides a normal life post corrective surgery to many such children born with this deformity. Our Program focusing on children also provides new hope to children with Epilepsy, which otherwise is a huge deterrent in their day–today lives. These surgeries give them a chance to lead normal lives, allowing them to be a part of society without fear of epileptic attacks.
Fortis believes that gender is one of the critical determinants for societal health and well–being. With that outlook, we prioritize women's empowerment and capacity building at all our centers.
Our focus is provision of medical support for survivors of violence and addressing their mental health. To this end our effort is to help acid attack victims. The treatment is a long drawn process that runs into years given the protracted multiple surgeries & laser sittings required for a survivor. Apart from the surgical intervention, the most important part of the treatment is psychological support to the victims and carving a pathway for rehabilitation, through partners, that allows them financial independence & a place in society for the future.
In keeping with the same Fortis was a sponsor for an year– long radio campaign "Fever Voice of Change" on different concerns related to women, including acid attack, in partnership with an FM Channel "fever 104" with John Abraham as the campaign ambassador.
A core area of commitment at Fortis, is providing emergency medical relief services to people in disaster hit areas. Every Fortis facility has a 5 member Disaster Response team (DRT) and over 500 employees have registered as volunteers.
In the past we have been present to support relief efforts during the Fire in Masoodpur Slums in Vasant Kunj, the Floods in Uttarakhand, the Leh Flash Floods in 2010 and the Bihar Floods in 2008.
In the recent past, 50 volunteers comprising of Doctors, Nurses, Paramedics and Administration staff went to Srinagar and its surrounding areas in 2014 for a month, to provide assistance to people affected by the floods. Fortis Foundation extended not only the medical support, but also essentials like warm clothes, blankets, food, etc. to protect those affected.
Similarly after the Nepal earthquake in 2015, our team of 24 medical professionals spent 10 days providing medical aid to over 5000 people.
Fortis believes in sharing its experience and learning's in promoting the sustainability of public charitable medical infrastructure. Our support to such facilities is a responsibility we own as a healthcare leader. This support helps sustain the charitable infrastructures. In the absence of such guidance and assistance, it could collapse at the cost of their target audience who needs it the most i.e. individuals at the bottom of the pyramid.
In this effort Fortis has been actively collaborating with a reputed Charitable Institution by helping it streamline and run its laboratory facilities. This support has helped in improving its efficiency and releasing critical resources to support patient facing efforts. This support helps the above 3 Lac patients who visit this facility annually and receive free treatment.
In addition, we collaborate and support in the running of charitable OPD clinics in Jaipur and Amritsar allowing for existing infrastructure to be better leveraged and sustained.
As part of the current National Focus, Fortis Foundation sponsored the construction of a 100 toilets, supporting an initiative by the "World Toilet Organization" (WTO), a Singapore based not for profit company. It is also the knowledge partner of "Care Today Fund", the CSR initiative by the India Today Group. The aim being to help socially relegated people, especially women, in India who had no access to toilets. Construction of 200 toilets is also being executed through "Nanhi Chaan" foundation in Himachal Pradesh and other select areas.
Fortis Foundation has, over the years, sponsored many critical surgeries for under privileged and in doing so has transformed their lives. While difficult to mention all a few highlighted cases are:
Keshav Prashar, a 5% years old child, needed three different Chemotherapy protocols and a surgery. To save his life he needed an allogeneic Bone Marrow Transplant from his father followed by radiation. Fortis Foundation sponsored his entire treatment.
Yohan, a 7 year old boy, had a condition of undescended testicles from the time of his birth. He needed surgeries and was brought in by an NGO, "Human dreams (India) family home" for abandoned children. The first corrective surgery took place in July, 2014 at FMRI, Gurgaon.
Hiralal, from Maharashtra, belongs to an economically weaker section of society. He could not afford the cost of a heart transplant. Fortis Malar, Chennai sponsored his transplant.
Baby Prateeksha was abandoned at the door steps of an NGO by her biological mother the day she was born. Prateeksha had multiple complications, apart from congenital heart defect (CHD). The doctors at FMRI stabilised the baby over a period of 2 weeks at the hospital. Her heart surgery will be supported under the Little Hearts Program.
The Fortis foundation is a key partner in the Cancerthon, a joint initiative by Fortis Healthcare, NDTV & ICS. We are committed to supporting the government in their cause to fight cancer among young Indians.
AWARENESS AND COMMUNICATION
Fortis believes that generating awareness and disseminating health information at every level of society is key to preventing illnesses and increasing knowledge amongst the general population, especially for those who have limited access to information.
Our hospitals and partners focus on health awareness camps all over India. Our pamphlets focusing on different diseases are distributed freely and our 'Sunday Conversations' are aimed at discussing the different aspects of healthcare.
Under 'The Global Dignity — India' Program we aim to promote the message of dignity amongst the younger generation. Launched in 2013, Fortis together with its like–minded partners, have reached out to 193 schools, 3241 children & 277 teachers within a short span through sessions held at over 100 schools around India dealing with issues from a healthcare prespective.
Fortis has conducted awareness Programmes for under privileged girls, people from economically weaker sections of society, students, NGO's, Police, Government agencies, cancer patients and a range of others to generate awareness about illnesses and prevention in an attempt at creating a healthier society.
Particulars pursuant to clause (o) of sub–section (3) of Section 134 of the Companies Act, 2013 read with Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, is given in Annexure V forming part of the Board Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors had on the recommendation of the Nomination and Remuneration Committee appointed Ms. Lynette Joy Hepburn Brown as Non Executive Independent Director on May 29, 2015 and Mr. Ravi Umesh Mehrotra as Non Executive Non Independent Director & Ms. Shradha Suri Marwah in capacity of Independent Director on March 26, 2015. The Shareholders had at the last Annual General Meeting of the Company held on September 24, 2014 confirmed the appointment of Ms. Lynette Joy Hepburn Brown for a period of five years. Also, the Shareholders vide Postal Ballot dated May 4, 2015 approved the appointment of Mr. Mehrotra and Ms. Shradha as Independent Directors of the Company for a period of five years.
Pursuant to Section 152 of the Companies Act, 2013 read with the Clause 86 of the Articles of Association of your Company, Mr. Harpal Singh, Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re–appointment. The Board re–commends his re–appointment.
Brief resume of directors seeking appointment and reappointment along with other details as stipulated under Clause 49 of the Listing Agreement, are provided in the Notice for convening the Annual General Meeting.
Mr. Gurcharan Das was liable to retire by rotation in the last Annual General Meeting of the Company held on September 24, 2014. However he offered not to be re–appointed as Director.
All Independent Directors have submitted declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
During the Financial Year 2014–15, six meetings were held by the Board of Directors. The details of board/committee meetings and the attendance of
Disclosures regarding the following are mentioned in report on Corporate Governance forming part of this report:
1. Number of Board Meetings;
2. Composition of Committee(s) of the Board of Director and other details;
3. Details of establishment of Vigil Mechanism;
4. Details of remuneration paid to all the Directors including Stock options; and
5. Commission received by Managing Director and/or Whole Time Director.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out performance evaluation of its own performance, the directors individually, chairman as well as the evaluation of the working of its Audit and Risk Management Committee, Nomination and Remuneration Committee (NRC), Stakeholders Relationship Committee and Corporate Social Responsibility Committee.
The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director etc. Details of Remuneration Policy are stated in the Corporate Governance Report.
The Company has from time to time familiarised the Board of Directors with the Company's operations, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. The same is governed by a template viz Board of Directors Governance Standard and it is available at <http://www.fortishealthcare.com/pdf/Board> of Directors.pdf
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 Act, the 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 of the Company during business hours on working days of the Company upto 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
All related party transactions that were entered into during the period under review were on an arm's length basis and in the ordinary course of business. There are few materially significant Related Party Transactions made by the Company with other related parties as described under Corporate Governance Report of the Company forming part of the Annual Report. Disclosures as required under Section 134(3) (h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in Annexure VI in Form AOC 2 as specified under Companies Act, 2013.
All Related Party Transactions are placed before the Audit and Risk Management Committee for approval as required under Clause 49 of the Listing Agreement. Prior omnibus approval of the Audit and Risk Management Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit and Risk Management Committee for their approval on a quarterly basis.
The Company has developed a Related Party Transactions Framework and Standard Operating Procedures for 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 the following link: <http://www.fortishealthcare.com/pdf/Related> Party Transactions Framework Document.pdf
None of the Directors has any pecuniary relationship or transaction vis–a–vis the Company, except to the extent of sitting fees and remuneration approved by the Board of Directors.
RISK MANAGEMENT POLICY
The Company has developed and implemented a Risk Management Policy. The said policy is being implemented and monitored by the Audit and Risk Management Committee. The details thereof are covered under 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. As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act,2013 ('Act') and Rules made thereunder, your Company has constituted Internal Complaints Committees (ICC). During the year, twelve complaints with allegations of sexual harassment were filed with the Company and the same were investigated and resolved as per the provisions of the Act.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, forms part of this Annual 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. Sanjay Grover & Associates, Company Secretary in Whole–Time Practice, regarding compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexed with the Corporate Governance Report.
CODE OF CONDUCT
Declaration by Mr. Malvinder Mohan Singh, Executive Chairman confirming compliance with the 'Fortis Code of Conduct' is enclosed with Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information 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, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments 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, 2015 and of the loss 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.
Your Directors place on record their gratitude to the Central Government, State Governments and all other Government agencies for the assistance, cooperation 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 cooperation, 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.
On behalf of the Board of Directors
Sd/– Malvinder Mohan Singh
Date: August 6, 2015
Place : Gurgaon