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Directors Report of Fortis Healthcare Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting here the Twentieth Annual Report of your Company alongwith the Audited Standalone and Consolidated Financial Accounts and the Auditors'' Report thereon for the Year ended March 31, 2016.

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its Subsidiaries are as follows:

[Rs. in Million]

Particulars Consolidated Year ended Year ended March 31, March 31, 2016 2015

Continuing Operations

Operating Income 42,651.38 39,658.62

Other Income 1,470.20 958.32

Total Income 44,121.58 40,616.94

Total Expenditure 40,481.99 38,352.23

Operating Profit 3,639.59 2,264.71

Less: Finance Charges, Depreciation & 3,543.46 3,863.41 Amortization

Loss before exceptional items and tax 96.13 (1,598.70)

Exceptional items (331.89) 3.32

Loss before tax (235.76) (1,595.38)

Less: Tax Expenses 465.68 45.31

Net Profit for the year (701.44) (1,640.69)

Profits/ (Losses) attributable to minority 212.77 (138.72) interest

Share in profits of associate companies 655.58 593.33

Profit/ (Loss) for the year from (258.63) (1,186.08) continuing operations (A)

Discontinuing Operations

Profit/ (Loss) before tax from 12.77 (237.45) discontinuing operations

Tax expense of discontinuing operations 2.67 17.25

Profit/ (Loss) after tax and before 10.10 (254.70) minority interest from discontinuing operations

Share in profits/ (losses) of associate 0.21 2.50 companies

Profits/ (losses) attributable to minority 0.20 1.29 interest

Profit for the year from discontinuing 10.11 (250.91) operations (B)

Profit for the year (A B) (248.52) (1,436.99)

The highlights of financial results of your Company as a Standalone entity are as follows:

[Rs. in Million]

Particulars Standalone

Year ended Year ended March 31, March 31, 2016 2015

Operating Income 6,115.92 6,106.41

Other Income 1,472.35 2,179.12

Total Income 7,588.27 8,285.53

Total Expenditure 7,294.39 7,593.14

Operating Profit 293.88 692.39

Less: Finance Charges and Depreciation 875.65 1,077.67

Profit/ (loss) before exceptional items and (581.77) (385.28) tax

Exceptional items (153.31) 26.54

Profit/ (loss) before tax (735.08) (358.74)

Less: Tax Expenses - (19.69)

Net Profit for the year (735.08) (339.05)

STATE OF COMPANY''S AFFAIR, OPERATING RESULTS AND PROFITS

For the Financial Year 2015-16, the Company recorded audited consolidated operating income from continuing operations of Rs.42,651 Million, a growth of 8% over the previous year operating income of Rs.39,659 Million.

Consolidated total income (including other income) from the continuing operations for the Financial Year 2015-16 was at Rs.44,122 Million compared to Rs.40,617 Million in the previous year. Operating profit for the year stood at Rs.3,640 Million compared to Rs.2,265 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 '' (701) Million as against '' (1,641) 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.10 Million as against '' (255) Million for the corresponding previous year. The Net profit for the year (including both continuing and discontinuing operations) was '' (249) Million against '' (1,437) 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. 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, 2016, the healthcare verticals of the Company primarily comprise day care specialty, diagnostics and tertiary and quaternary care. As of March 31, 2016, the Company had a network of 45 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 42 healthcare facilities, including 30 operating facilities, 6 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 600 cities and towns, with an established strength of 314 laboratories including 161 self-operated laboratories, 108 labooratories inside hospitals including 27 laboratories located in Fortis healthcare facilities, 18 wellness centres and 3 international laboratories. It also has over 7,200 collection points, which includes 98 collection centers that are owned and 61 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 2015- 16. Accordingly, there has been no transfer to general reserves.

The Company is in process of Formulating the Dividend Policy in terms of SEBI Circular No. SEBI/LAD- NRO/6N/2016-17/008. The policy once approved by the Board of Directors, the same shall be hosted on the website of the Company and disclosed in the annual report of the Financial Year 2016-17.

There were no material changes and commitments, affecting the financial position of the company which have occurred between the end of the financial year 2015-16 and the date of the report

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:

- 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.

- The Company through its wholly owned subsidiary Fortis Hospitals Limited has acquired Stellant Capital Advisory Services Private Limited on November 3, 2015

- Religare Health Trust Trustee Manager Pte Ltd became a wholly owned subsidiary of Stellant Capital Advisory Services Private Limited w.e.f. February 2, 2016

Further note that your Board of Directors have adopted a policy for determining "material subsidiary" pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015. 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) and SRL Limited (SRL) are 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 and SRL.

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).

LOANS/ADVANCES/INVESTMENTS

Particulars of Loans/Advances/Investments given and outstanding during the Financial Year 2015-16 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 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.

AUDITORS

Statutory Auditors

M/s. Deloitte Haskins & Sells, LLP, Chartered Accountants, were appointed as Statutory Auditors of your Company w.e.f. September 23, 2015 for period of 5 years subject to ratification my members at every Annual General Meeting.

Based on the recommendations of the Audit and Risk Management Committee, the Board of Directors of the Company proposes to ratify 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 Consolidated Financial Statements of the Company made the following comments which are self explanatory and are categorized as "Matter of Emphasis", hence no comments in this regard has been offered by your Board of Directors:

a) Notes 11(A), 11(B), 12(i) and 12(ii) to the financial statements relating to income tax demands and termination of certain land leases allotted by Delhi Development Authority (DDA).

b) Notes 11(C) to the financial statements relating to non-compliance with the order of the Honorable High Court of Delhi in relation to provision of free treatment / beds to poor.

Based on the advice by external legal counsel, no provision/adjustment has been considered necessary by the Management in this regard in the consolidated financial statements.

Our opinion is not modified in respect of this matter. Cost Auditors

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 2015-16 at a remuneration of Rs. 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. 5 of the Notice convening the Annual General Meeting.

Secretarial Auditor

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 Sanjay Grover & Co., Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure II".

Internal Auditors

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 2015-16. Accordingly, M/s. KPMG and E & Y, LLP were engaged to perform Internal Audit for the Company.

During the financial year under review no fraud was reported by any of the above stated auditors.

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 Rs. 10 each of the Company. During the year under review, 26,00,000 options were granted by the Company under ESOP 2011. Disclosure pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 for the Year ended March 31, 2016 is available at http:// cdn.fortishealthcare.com/0.36806700_1467309996_ ESOP-Disclosure-2015-2016.pdf and forms part of this Directors'' Report.

During the year under review, under the terms of the "Employee Stock Option Plan 2007", 122180 stock options were exercised and under the terms of "Employee Stock Option Scheme 2011" 200000 stock options were exercised.

The certificate from the Statutory Auditors ofthe 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 - OUR JOURNEY THROUGH THE PAST YEAR (2015-16)

As a responsible corporate citizen and a critical member of the Indian healthcare ecosystem, we at Fortis Healthcare strongly believe that we can meaningfully alleviate the problem of inequitable access to quality healthcare. By creating and supporting social sector programs linked to health and well-being, we seek to leverage our skills, experience, capabilities, technologies and facilities to address a critical social need for the vulnerable sections of society. We have continuously enabled programs and initiatives, based on rigorous needs assessment, leading to not just improvement in healthcare service delivery but also creating social awareness and change. We believe this is the best way to have the greatest impact, because our interventions are capable of transforming lives, building aware communities and protecting the environment.

These initiatives for Fortis Healthcare Limited are led through the Fortis Charitable Foundation (FCF), its designated CSR vehicle.

Fortis Foundation has 5 primary programs:

UMEED (A Child Centric Program),

AANCHAL (Women''s Health and Well-Being),

SEWA (A Disaster Relief Initiative),

CHHAYA (Supporting Charitable Medical Infrastructure)

SAVERA (Awareness, Communication & Publications) and

SPECIAL LIVES (A program catering to special situations that demand a response)

UMEED presently focuses on 2 areas: children suffering from Congenital Heart Defect (UMEED-DHADKAN) and Cleft Lip & Cleft Palate UMEED-SMILE).

UMEED - DHADKAN (Congenital Heart Defect):

The past decade has seen the program facilitate the treatment of over 5280 children and the last year (2015-16), saw us support over 1178 children.

UMEED - SMILE (Cleft Lip & Cleft Palate):

This program was started in February 2015; till date the program has supported 46 children.

AANCHAL focuses on health and well-being of the mother with the overall aim of ensuring improvements in community & societal health. One of our primary focus areas under this program is medical and psychological support for Acid Attack Survivors.

Over the past year, FCF has supported 7 acid attack survivors whose treatment entails numerous procedures, surgeries and psychological counselling.

SEWA is a Disaster Relief Initiative undertaken by Fortis Charitable Foundation. The program focuses on ensuring preparedness and provides medical relief in an organized and time-sensitive manner to people affected in a natural disaster situation. Over the last decade, SEWA has provided medical relief during the Leh Floods, Jammu and Kashmir Floods, Bihar Floods, Uttarakhand Earthquake, and Masoodpur Fire in South Delhi.

In 2015-16, our team provided medical aid during the Nepal earthquake and the floods in Chennai. Our team of volunteers was well-organized and despite difficult conditions, provided much-needed relief to the affected population. Medical relief camps were set up for anyone requiring aid and over 8000 people were treated and over 1.5 tons of relief material was distributed.

CHHAYA is a program designed to help, sustain and revive existing charitable healthcare infrastructure. CHHAYA partners with organizations to conduct health camps and run charitable clinics.

In 2015-16, CHHAYA continued supporting the charitable dispensary in Amritsar, and helped start a new charitable dispensary at the Birla Mandir in Delhi. Over the last year, the Golden Temple dispensary treated 32,190 patients.

The huge demand for health camps from various sectors made us re-evaluate the focus of CHHAYA and we decided to expand its scope by collaborating with different partners to conduct health camps. With support from our executing partners, we facilitated diagnostic tests and treatment of 71,995 people over the last year. In 2015- 16, FCF entered into a welcome partnership with PNB Housing Finance, conducting 3 health camps during the year and treating 374 students and faculty. The health camps included free blood tests, eye tests, dental tests, BMI and general health evaluation for each participant.

In 2015, FCF initiated the design for a program to create awareness around preventive and remedial healthcare. The objective of the program was to build an informed society, which through access to information and easy- to-understand materials, is equipped to care for itself and make informed health choices. The program is also a platform to communicate about the foundation''s work, ideas, finances and partner ecosystem. With this in mind, a new program SAVERA was started.

SAVERA uses several mediums to communicate - print, digital and audiovisual, to focus on providing access to preventive and remedial healthcare education for a range of stakeholders. The program caters to diverse target groups through various channels of communication like publications, audio-visual communication, children''s books, pictures and posters.

The redesigned website effectively expanded the Foundation''s reach and enhanced its ability to communicate with FCF partners, trustees, volunteers and employees of the all its contributing, executing and service partners. Two publications for children on health and hygiene were produced in five different languages. Several ''Smile Stories'' of children suffering from Congenital Heart Defects, successfully treated under our UMEED program were filmed, edited and uploaded.

SMILE STORIES & SPECIAL LIVES

PRINCILLA SALAM (UMEED - DHADKAN)

Princilla is the daughter of a fisherman, Salam Boyai, and belongs to Bishnupur district of Manipur. His average annual income is Rs. 48,000/-. Though she is only two and a half years old, she loves eating spicy food and is very fond of fish. Like all children she loves playing with dolls and her favourite is a teddy bear. She also loves watching Salman Khan films.

However Princilla lives with the fear of getting breathless as she is suffering from congenital heart defect. Her parents couldn''t afford a surgery and they continued with the prescribed medication hoping she would recover fully.

Their neighbour Grace searched the internet, looking for options for financial aid for her and came across the ''Little Hearts Program'' and wrote to Fortis Foundation for support. Grace arranged for the family to travel to Gurgaon for medical evaluation. A surgery was recommended and Fortis Foundation in collaboration with its partner, Being Human Foundation supported Princilla''s surgery.

MUSKAAN (UMEED- DHADKAN)

Muskaan, a nine-year old from Bihar, was diagnosed with a hole in her heart a few years ago. Her parents took her to a few hospitals but realized the treatment was unaffordable so they kept her on medication despite her condition.

Muskaan''s uncle, Sanj eev, runs a small tea shop outside the Fortis Support office in Gurgaon. One day while talking to people from the support office sales department, he mentioned his niece''s condition. Knowing that Fortis Foundation''s UMEED program supports children from economically disadvantaged sections of society, Muskaan''s case was referred to Fortis Charitable Foundation.

In September 2015, Muskaan was brought to Delhi for evaluation and subsequently successfully treated for the condition.

POONAM DEVI - (AANCHAL- AAS)

Poonam Devi is 22 years old and lives with her parents in Karnaipur, Uttar Pradesh. Her father owns a small shop in the nearby town and her mother is a housewife. She completed her B.A. in 2014 and was looking for a job.

One fateful day, while she was accompanying her father to her Uncle''s house, her cousin brother ran out and threw acid on her, burning her right eye, right arm and leg. For over a year, Poonam and her family went to several hospitals requesting treatment till their resources ran out.

Finally, they heard about the possibility of getting free treatment through Fortis Foundation''s AANCHAL program. They came to Fortis Memorial Research Institute in Gurgaon on 4th October, 2015 for an evaluation. Poonam''s doctor said "The young lady barely has any vision in the right eye (perception of light). The eyelids are completely fused and no eye ball is visible. There is disfigurement of the nose and lips, more prominent on the right side".

Seeing her condition, the doctor waived her fees and Fortis Foundation supported the entire cost of her reconstructive surgery.

LAKSHYA - (UMEED-Special Lives)

Lakshya is a 2 year-old child suffering from an extremely rare disorder - "Nager Syndrome". There are less than 100 people suffering from this disease in the entire world. There is no specific cause for the occurrence of Nager Syndrome though research indicates it could be due to gene mutation.

Lakshya was born with underdeveloped cheek bones, a very small jaw and an opening on the roof of his mouth which makes it very difficult for him to breathe and eat. Due to this condition, Lakshya''s speech is affected and he cannot talk. He has no control over his tongue muscles and is in constant danger of choking. He has to be supervised throughout the day and at night his parents take turns to stay awake with him.

For Lakshya''s parents, the struggle is not just emotional but also financial due to doctor visits, tests, surgeries and follow-up treatment.

Lakshya''s treatment has been supported by Fortis Foundation''s UMEED-Special Lives Program. Till date two surgeries have been completed and his treatment will continue over the next few months.

PUSHPAK SHARMA (UMEED- DHADKAN)

Pushpak is a 13 month-old child. He was born in Deviyani Ranawat Hospital in Alwar, Rajasthan. During a routine medical check he was diagnosed with Congenital Heart Defect. This news was devastating for his parents.

Pushpak''s father Gopal Krishna Sharma is a domestic worker and earns just enough to take care of his three children, his mother and wife. While visiting hospitals for treatment, he found out about Fortis Foundation''s UMEED program which treats children suffering from Congenital Heart Defect. He came to Fortis Memorial Research Institute, Gurgaon for a medical check-up and a surgery was recommended. Pushpak''s surgery was supported by Being Human Foundation and Fortis Foundation.

Particulars pursuant to clause O of Sub Section 3 of Section 134 of the Companies Act, 2013 read with rule 9 of Companies (CSR) Rules 2014 is given in "Annexure V"

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review the Board of Directors had on the recommendation of the Nomination and Remuneration Committee re-appointed Mr. Malvinder Mohan Singh as Whole time Director designated as Executive Chairman w.e.f. April 1, 2016 for a period of 3 years and Mr. Shivinder Mohan Singh, designated as Executive Vice Chairman for a period of three years w.e.f. November 13, 2015. The Shareholders had at the last Annual General Meeting of the Company held on September 23, 2015 confirmed the said re- appointment(s)

Further, the Board of Directors at their meeting held on September 23, 2015 had considered and approved decision of Mr. Shivinder Mohan Singh to step down from the position of Executive Vice Chairman effective January 1, 2016 and continue on the Board as Non- Executive Vice Chairman of the Company.

Also, Mr. Udai Dhawan resigned from the Board w.e.f. March 23, 2016. During the year under review Mr. Bhavdeep Singh was appointed as Chief Executive Officer w.e.f. July 24, 2015 and designated as one of the Key Managerial Person w.e.f. August 6, 2015.

Pursuant to Section 152 of the Companies Act, 2013 read with the Article 86 of the Articles of Association of your Company, Mr. Sunil Godhwani and Mr. Ravi Umesh Mehrotra, Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. The Board re- commends their respective re-appointment(s).

Brief resume of directors seeking appointment and reappointment along with other details as stipulated under SEBI Listing (Obligations & Disclosure Requirements) Regulation, 2015, are provided in the Notice for convening the Annual General Meeting.

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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the Financial Year 2015-16, six meetings were held by the Board of Directors. The details of board/ committee meetings and the attendance of Directors are provided in the Corporate Governance Report.

Details of KMP are as under:

Name Designation

1Mr. Shivinder Mohan Singh Executive Vice Chairman

2Mr. Bhavdeep Singh Chief Executive Officer

Mr. Gagandeep Singh Bedi Chief Financial Officer

Mr. Rahul Ranjan Company Secretary

1 Designated as KMP w.e.f. May 28, 2015 and resigned as KMP w.e.f. August 6, 2015

2 Appointed as KMP w.e.f. August 6, 2015

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.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing (Obligation & Disclosure Requirements) Regulation, 2015, 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. Following process of evaluation was followed:

S. No. Process Remarks

1. Individual Self- Assessment Self-evaluation forms were shared and completed by the Directors and submitted to the Chairperson of Nomination and Remuneration Committee.

2. One to One discussion An Independent Advisor was authorised to interact with each member to assess performance, invite direct feedback and seek inputs to identify opportunities for improvement.

3. Board Evaluation for the Using the Self-assessment & output from the one-on-one discussion the fromal Board, Nomination & Board Evaluation process was conducted. A compiliation of the individual Remuneration Committee self-assessent & one-o-one discussions were placed at the meeting of the and of Independent Directors Nomination & Remuneration Committee (NRC), the Independent Director''s (ID''s) and the Board of Directors (BoD), to review collectively & include as additional feedback to the formal process completed in the meetings.

4. Final recording and reporting Based on the above, a final report on Board Evaluation was collated, presented and tabled at the meeting of the Board of Directors. The report was also noted best practises areas & considered opportunities for improvement.

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 the Financial Year 2015-16

Name of the Director* Remuneration of Median Remuneration Ratio Director of employees (Rs. in (Rs. in crore) crore)**

Mr. Malvinder Mohan Singh 1.58 0.02 63.26:1

Mr. Shivinder Mohan Singh 3.51 0.02 141.05:1

* None of the other Directors are paid any remuneration except sitting fees.

** Including Value of perquisites u/s 17(2) Income-tax Act, 1961 & Retiral Benefits

Mr. Shivinder Mohan Singh resigned as Executive Vice Chairman and continued as Non- Executive Vice Chairman of the Company w.e.f. January 1, 2016

(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

Name of Director/ KMP Designation % increase in Remuneration

Mr. Malvinder Mohan Singh Executive Chairman -

Mr. Shivinder Mohan Singh Executive Vice Chairman -

Mr. Bhavdeep Singh* Chief Executive Officer -

Mr. Gagandeep Singh Bedi Chief Financial Officer 7%

Mr. Rahul Ranjan Company Secretary 9%

* Appointed as KMP w.e.f. August 6, 2015

(c) The percentage increase in the median remuneration of employees in the financial year is 11%.

(d) The number of permanent employees on the rolls of Company is 2525 as on March 31, 2016.

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration

Particulars For the Financial Year 2015-16

(A) Average percentile increase already made in the salaries of employees other than the 12% managerial personnel

(B) Percentile increase in the managerial remuneration 0%

Comparison of (A) and (B) N.A.

Justification Any exceptional circumstances for increase in the managerial remuneration N.A.

(f) There is no variable component in the remuneration being paid to directors

(g) Remuneration has been paid to Directors and KMPs is as per the Remuneration Policy of the Company.

Remuneration Policy:

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://cdn.fortishealthcare. com/0.45892500_1460352751_Familarisation-Program. 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'' p articulars 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 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 SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015. 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://cdn. 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 and/or shareholders of the Company.

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, 2 complaints with allegations of sexual harassment were filed with the Company at the group level and the same were investigated and resolved as per the provisions of the Act.

DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations, Corporate Governance Report with Auditors'' certificate thereon and management discussion and analysis are attached, which form part of this report.

As per Regulation 34 of the SEBI Listing Regulations, a business responsibility report is attached and forms part of this annual report.

CODE OF CONDUCT

Declaration by Mr. Bhavdeep Singh, Chief Executive Officer 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, 2016, the applicable accounting standards has been followed along with proper explanation relating to material departures;

(b) the directors has 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, 2016 and of the loss of the company for the said period;

(c) the directors has 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 has prepared the annual accounts on a going concern basis;

(e) the directors, has 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 has 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 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/-

Date: August 4, 2016 Malvinder Mohan Singh

Place: Gurgaon Executive Chairman


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting here the Nineteenth Annual Report of your Company alongwith the Audited Standalone and Consolidated Financial Accounts and the Auditors'' Report thereon for the Year ended March 31, 2015.

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its Subsidiaries are as follows:

(Rs. in Million)

Consolidated

Year ended Year ended Particulars March 31,2015 March 31,2014

Continuing Operations

Operating Income 39,658.62 34,918.81

Other Income 958.32 1,673.76

Total Income 40,616.94 36,592.57

Total Expenditure 38,352.23 34,397.71

Operating Profit 2,264.71 2,194.86

Less: Finance Charges, Depreciation & Amortization 3,863.41 4,329.98

Loss before exceptional items and tax (1,598.70) (2,135.12)

Exceptional items 3.32 (51.26)

Loss before tax (1,595.38) (2,186.38)

Less: Tax Expenses 45.31 106.63

Net Profit for the year (1,640.69) (2,293.01)

Profits/ (Losses) attributable to minority interest (138.72) (6.55)

Share in profits of associate companies 593.33 111.41

Profit/ (Loss) for the year- from (1,186.08) (2,188.15) continuing operations (A)

Discontinuing Operations

Profit/ (Loss) before tax from discontinuing operations (237.45) 3,617.89

Tax expense of discontinuing 17.25 158.41 operations

Profit/ (Loss) after tax and before minority interest from (254.70) 3,459.48 discontinuing operations

Share in profits/ (losses) of associate companies 2.50 (2.35)

Profits/ (losses) attributable to 1.29 (43.06) minority interest

Profit for the year from discontinuing operations (B) (250.91) 3,413.57

Profit for the year (A B) (1,436.99) 1,225.42

The highlights of financial results of your Company as a Standalone entity are as follows:

(Rs. in Million)

Standalone

Year ended Year ended Particulars March 31,2015 March 31,2014

Operating Income 6,106.41 3,689.08

Other Income 2,179.12 2,296.38

Total Income 8,285.53 5,985.46

Total Expenditure 7,593.14 4,493.35

Operating Profit 692.39 1,492.11

Less: Finance Charges and 1,077.67 1,077.80 Depreciation

Profit/ (loss) before exceptional (385.28) 414.31 items and tax

Exceptional items 26.54 -

Profit/ (loss) before tax (358.74) 414.31

Less: Tax Expenses (19.69) 174.36

Net Profit for the year (339.05) 239.95

STATE OF COMPANY''S AFFAIR, OPERATING RESULTS AND PROFITS

For the Financial Year 2014-15, the Company recorded audited consolidated operating income from continuing operations of Rs. 39,659 Million, a growth of 14% over the previous year operating income of Rs. 34,919 Million. However, including the revenue from the discontinued operations i.e. Fortis Surgical Hospital and RadLink Asia, Singapore of 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 Rs. 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.

During the year under review the following subsidiaries of the Company have changed their names:

S. Old name New Name No.

1. Fortis Health Management Fortis La Femme Limited (West) Limited

2. Fortis Health Management Fortis Cancer Care Limited (South) Limited

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).

LOANS/ADVANCES/INVESTMENTS

Particulars of Loans/Advances/Investments given and outstanding during the Financial Year 2014-15 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 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.

AUDITORS

Statutory Auditors

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.

Cost Auditors

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 '' 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.

Secretarial Auditor

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 Rs. 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."

Management Comments:-

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.

Internal Auditors

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 Rs. 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 Rs. 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 13 4(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-to- day lives. These surgeries give them a chance to lead normal lives, allowing them to be a part of society without fear of epileptic attacks.

WOMEN

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.

DISASTER RELIEF

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.

HEALTHCARE INFRASTRUCTURE

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.

SPECIAL LIVES

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 Directors are provided in the Corporate Governance Report

Details of KMP are as under:

Name Designation

''Mr. Shivinder Mohan Singh Managing Director

2Mr. Aditya Vij Chief Executive Officer

3Mr. Gagandeep Singh Bedi Chief Financial Officer

Mr. Rahul Ranjan Company Secretary

4Mr. Sandeep Puri Chief Financial Officer

5Mr. Bhavdeep Singh Chief Executive Officer

1 Designated as KMP w.e.f. May 28, 2015 and resigned as KMP w.e.f. August 6, 2015

2 Resigned w.e.f. December 31, 2014

3 Designated as KMP w.e.f. September 24, 2014

4 Resigned as KMP w.e.f. September 24, 2014

5 Appointed as KMP w.e.f. August 6, 2015

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.

BOARD EVALUATION

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 Company had engaged an independent consultant for looking at the best practices prevalent in the industry and advising with respect to evaluation of Board members. On the basis of recommendations of the consultant following process of evaluation was followed:

Stage Procedure Remarks

I Data Collection/ Individual Assessment: Gathering Self evaluation forms (SEF) were circulated to all the Directors by the scrutinizer. All Directors submitted the SEF to the scrutinizer.

II Data Analysis Assessment by NRC and Independent and Discussion Directors (IDs) NRC discussed and evaluated the performance of all Directors.

IDs evaluated the performance of all Non Independent Directors, Chairman and Board & its committees

Assessment by Board of Directors

Board of Directors evaluated the performance of all Directors and overall performance of the Board and its committees.

III Outcome Recording Outcome of the discussions and analysis made and Reporting by NRC and IDs were placed before the Board for its consideration.

The Board gave its comments and assessment on the evaluation process.

Managerial Remuneration:

Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as under:

(a) Comparision and ratio of the remuneration of each director to the median remuneration of the employees of the Company for the Financial Year 2014-15

Name of the Director* Remuneration of Median Ratio Director Remuneration (Rs. in Crore) of employees (Rs. in Crore)

Mr. Malvinder Mohan Singh 5.32 0.02 231.90:1

Mr. Shivinder Mohan Singh 5.36 0.02 231.90:1

*None of the other Directors are paid any remuneration except sitting fees.

(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

Name of Director/ KMP Designation % increase in Remuneration

Mr. Malvinder Mohan Singh Executive Chairman -

Mr. Shivinder Mohan Singh Executive Vice Chairman -

''Mr. Aditya Vij Chief Executive Officer -

2Mr. Gagandeep Singh Bedi Chief Financial Officer 21.45

Mr. Rahul Ranjan Company Secretary 12.53

3Mr. Sandeep Puri Chief Financial Officer 7.48

4Mr. Bhavdeep Singh Chief Executive Officer 7.48

1 Resigned w.e.f. December 31, 2014

2 Appointed as CFO w.e.f. September 24, 2014

3 Resigned w.e.f. September 24, 2014

* Appointed as CEO w.e.f. August 6, 2015

(c) The percentage increase in the median remuneration of employees in the financial year is 7%;

(d) The number of permanent employees on the rolls of Company is 3333 as on March 31, 2015.

(e) The explanation on the relationship between average increase in remuneration and Company performance

Looking at the organizational performance and the overall industry performance, your Company has fared well. We have seen a steady year on year growth in the Company performance and the average increase in remuneration is closely linked to this growth.

(f) Comparison of the remuneration of the Key Managerial Personnel (Individually and Collectively) against the performance of the Company

Key Managerial Personnel CTC (Amount in Rs.) Revenue

Mr. Gagandeep Singh Bedi 53,65,909 Rs.61,064.07 lacs

2,75,67,944 (CTC is prorated as he has worked only for 9 Mr. Aditya Vij months in FY 14-15)

Mr. Rahul Ranjan 38,43,558

1,28,75,910 (CTC is prorated as he has worked only Mr. Sandeep Puri for part of the FY 14-15)

Total 4,96,53,321

Mr. Shivinder Mohan Singh was appointed as KMP w.e.f. May 28, 2015 and resgined as KMP w.e.f. August 6, 2015. Also Mr. Bhavdeep Singh was appointed as KMP w.e.f. August 6, 2015.

(g) Variations in the market capitalisation of the Company, price earnings ratio as on March 31, 2015 and March 31, 2014 and percentage increase/decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer

Particulars As on As on March 31, March 31 2014 2015

Market capitalization (Rs. in crore) 4,535 7,636

*Price earnings ratio - -

Rate at which the Company came out with the 108 108 last public offer i.e. in 2007 (Rs.)

Share price as at (Rs.) 98 165

% Increase or decrease in share price -9.5 52.8

*In view of the losses, the Price earnings ratio cannot be calculated

(h) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration

Particulars For the Financial Year 2014-15

(A) Average percentile increase already made in 13% the salaries of employees other than the managerial personnel

(B) Percentile increase in the managerial remuneration 0% Comparison of (A) and (B)

Justification N.A.

Any exceptional circumstances for increase in the managerial remuneration N.A.

(j) There is no variable component in the remuneration being paid to directors

(k) There is no employee who received remuneration in excess of the highest paid director during the year under review;

(l) Remuneration has been paid to Directors and KMPs is as per the Remuneration Policy of the Company.

Remuneration Policy:

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.

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 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/-

Date: August 6, 2015 Malvinder Mohan Singh Place : Gurgaon Executive Chairman


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting here the Eighteenth Annual Report of your Company together with the Audited Standalone and Consolidated Financial Accounts and the Auditors'' Report thereon for the Year ended March 31, 2014.

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its Subsidiaries are as follows:

[Rs. in Million]

Particulars Consolidated

Year ended Year ended March 31, March 31, 2014 2013

Continuing Operations

Operating Income 36,656.66 30,423.36

Other Income 1,697.02 1,511.22

Exceptional items - 9,958.88

Total Income 38,353.68 41,893.46

Total Expenditure 36,229.05 28,199.40

Operating Profit 2,124.63 13,694.06

Less: Finance Charges, Depreciation 4,668.72 6,900.69 & Amortization

Profit before Tax (2,544.09) 6,793.37

Less: Tax Expenses 166.46 1,748.22

Net Profit for the year (2,710.55) 5,045.15

Profits/ (losses) attributable to 9.93 277.42

Minority Interest

Share in the (Loss)/Profit of 113.19 82.24 Associates

Profit for the year from continuing (2,607.29) 4,849.97 operations (A)

Discontinuing Operations

Profit before tax from discontinuing operations 3,975.61 1,163.47

Tax expense of discontinuing operations 98.59 564.94

Profit after tax and before minority interest from discontinuing operations 3,877.02 598.53

Share in profits/ (losses) of associate companies (4.64) 0.14

Profits attributable to minority interest 39.68 449.29

Profit for the year from discontinuing operations (B) 3,832.70 149.38

Profit for the year (A B) 1,225.41 4,999.37

The highlights of financial results of your Company as a Standalone entity are as follows:

[Rs. in Million]

Standalone

Year ended Year ended Particulars March 31, March 31, 2014 2013

Operating Income 3,689.08 3,529.72

Other Income 2,296.38 1,905.69

Total Income 5,985.46 5,435.41

Total Expenditure 4,493.36 3,541.33

Operating Profit 1,492.10 1,894.09

Less: Finance Charges and 1,077.80 1,573.33 Depreciation

Profit before Tax 414.30 320.76

Less: Tax Expenses 174.36 148.27

Net Profit for the year 239.94 172.49

OPERATING RESULTS AND PROFITS

For the Financial Year 2013-14, the Company recorded audited consolidated revenues from continuing operations of Rs. 36,657 Million, a growth of 20% over the previous year revenues of Rs. 30,423 Million. However, including the revenue from the discontinued operations i.e. Dental Corporation Holding Limited, Quality Healthcare and Hoan My of Rs. 10,945 Million, overall revenues for the company stood at Rs. 47,593 Million compared to Rs. 60,516 Million in Financial Year 2012-13.

Consolidated total income (including other income and exceptional item) from the continuing operations for the financial year 2013-14 was at Rs. 38,353 Million compared to Rs. 41,893 Million in the previous year. Operating profit for the year stood at Rs. 2,124 Cr. compared to Rs. 13,694 Cr. in the previous year. The Net Profit after Tax but before Profits attributable to Minority Interest and Share in the profits of Associates stood at Rs. (2,710) Million as against Rs. 5,045 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. 3,877 Million as against Rs. 598 Million for the corresponding previous year. The Net profit for the year (including both continuing and discontinuing operations) was Rs. 1,225 Million against Rs. 4,999 Million in the previous year.

Your Company has continued to strive towards improving the value proposition it offers to the patients and general public and during the year under review, has made further strides in implementing its strategic growth and development initiatives across various facets of the Organization. Expanding and deepening the footprint of network hospitals has helped us to touch increasing number of lives during the year.

Your Company is a leading, healthcare delivery provider in Asia. As of 31 March 2014, the healthcare verticals of the company primarily comprise hospitals, diagnostics and day care specialty facilities. Currently, the company operates its healthcare delivery services in India, Singapore, Dubai, Mauritius and Sri Lanka with 66 healthcare facilities (including projects under development), over 10,000 potential beds. In addition, the company''s Indian diagnostics business has a presence in over 450 cities and towns, with an established strength of 281 laboratories including 141 self-operated laboratories, 31 laboratories located in Fortis healthcare facilities, 21 wellness centres and 3 international laboratories. It also has over 5,800 collection points, which includes 48 collection centers that are owned and 48 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.

CAPITAL RAISING AND CHANGES IN CAPITAL STRUCTURE

Changes in Capital Structure

Under the terms of the "Employee Stock Option Plan 2007", the Company allotted 14,800 equity shares of Rs. 10 each, against exercise of vested stock options by the eligible employees during the year. Further, the following allotments took place during the year under review:

(i) In May, 2013, 34,993,030 Equity Shares of Rs. 10 each at an issue price of Rs. 92 per Equity Share aggregating to Rs. 3,219.4 million to qualified institutional buyers by way of Institutional Placement Programme in accordance with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(ii) In June, 2013, 18,833,700 Equity Shares of Rs. 10 each, at a premium of Rs. 89.09 per share agg re gati n g to Rs. 1,866.3 million to Inter national Finance Corporation ("IFC") by way of preferential allotment under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the "SEBI Regulations").

(iii) 3,737,449 Equity Shares of Rs. 10 each, for cash, at a premium of Rs. 89.09 per share to Standard Chartered Private Equity (Mauritius) III Limited" ("SCPE"), aggregating to Rs. 370 million.

During the year under review, the Company has redeemed all its preference shares comprising of 1,450,000 Class ''C'' Zero Percent Cumulative Redeemable Preference Shares of Rs. 10 each amounting to Rs. 145 lac and 3,196,000 Class ''C'' Zero Percent Cumulative Redeemable Preference Shares of Rs. 9 each amounting to Rs. 287.64 lacs.

Further, during the Financial Year 2013-14, the Company issued, by way of public subscription, Foreign Currency Convertible Bonds (FCCBs) aggregating USD 30,000,000 to eligible investors and another FCCBs to International Finance Corporation at a base price of Rs. 99.09 per Equity share for an aggregate consideration of USD 55,000,000.

LISTING OF EQUITY SHARES/BONDS

The Equity Shares of the Company continue to be listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Further, the existing Foreign Currency Convertible Bonds (FCCBs) are listed on "Bourse de Luxembourg" (Luxembourg Stock Exchange and Singapore Exchange Securities Trading Limited). The requisite annual listing fees have been paid to these Exchanges.

SHARES UNDER COMPULSORY DEMATERIALIZATION

The Equity Shares of your Company are included in the list of specified scripts where delivery of shares in dematerialized (demat) form is compulsory, if the same are traded on a Stock Exchange, which is linked to a Depository. As of March 31, 2014, 99.80% Equity Shares of the Company were held in demat form.

STOCK OPTIONS

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 (erstwhile Human Resources 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 Rs. 10/- each of the Company. During the year under review, 37,15,000 grants were made by the Company under ESOP 2011. Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI Guidelines") for the year ended on March 31, 2014 have been set out in Annexure II to this Directors'' Report.

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.

SUBSIDIARY COMPANIES

During the year under review:

- The Company sold it''s entire equity stake (held through its subsidiary- Fortis Healthcare Australia Pty Limited) in Dental Corporation to Bupa, Australia for a total consideration of AUD 276 million in May, 2013. The Company, therefore, no longer holds any interest in the business of Dental Corporation.

- The Company (through its subsidiary- Fortis Healthcare International Pte Limited), sold its equity stake in Fortis Hoan My Medical Corporation, Vietnam ("Hoan My") to Viva Holdings Vietnam (Pte.) Ltd., a Chandler Corporation company, for an aggregate consideration of USD 80.00 million.

- The Company (through its subsidiary- Fortis Healthcare International Pte Ltd.) divested its stake in October, 2013 in Altai Investments

Limited, (holding company of Quality Healthcare, Hongkong) to BUPA International Limited for USD 365.00 million.

- Fortis Health Management (North) merged

with Fortis Hospitals Limited (both subsidiaries of the Company) effective from the appointed date i.e. April 01, 2012 vide the hon''ble High Court of Delhi order dated July 22, 2013.

SRL LIMITED

SRL Ltd has established itself as a leader in the Indian diagnostic space by maintaining its technological superiority, expanding its network and attracting the best medical, technical and managerial talent in the country. It offers a menu of over 3,500 tests spanning the screening, diagnostic, monitoring and prognostic spectra of lab medicine. SRL is the only complete diagnostic services provider, with offerings spanning Pathology, Radiology, Wellness, Occupational Health and Clinical Trials. It operates 281 laboratories, including 12 reference labs and carries out over 100,000 tests a day. SRL''s four Centres of Excellence (CoE) in Histopathology, Molecular Biology, Cytogenetics and Haematology are the nerve centres for advancements in these areas. SRL, being committed to quality, has highest number of accredited labs -31 labs accredited by the NABL (ISO 15189:2007) and 4 labs accredited by CAP.

EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. Accordingly, in terms of general exemption, the Board of Directors of the Company, in its Meeting held on May 29, 2014, resolved that the Financial Statements and other required documents of the subsidiary companies are not required to be attached with the Balance Sheet of the Company for this fiscal year.

The Annual Accounts of these subsidiary companies and the related information are open for inspection by any member including the members of subsidiary companies at the registered office of the Company and that of subsidiaries concerned, during the working hours on all working days. The Company will make available these documents to the members including members of subsidiary companies upon receipt of request from them. The members, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary companies.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater 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 said Corporate Governance Report.

CODE OF CONDUCT

Declaration of Mr. Malvinder Mohan Singh, Executive Chairman confirming compliance with the ''Fortis Code of Conduct'' is enclosed with Corporate Governance Report.

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 with the Stock Exchanges of India, forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) AND CSR COMMITTEE

Your Company is committed towards the development of healthcare for improving the quality of life.

During the year, your directors have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising of Dr. P. S. Joshi as the Chairman and Mr. Harpal Singh and Mr. Malvinder Mohan Singh as members.

The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

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 58A of the Companies Act, 1956, and therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as of the date of Balance Sheet.

DIVIDEND AND TRANSFER TO RESERVES

Keeping in view the aggressive growth strategy of the Company, the Board of Directors of your Company have decided to plough back the profits and thus, not recommended any dividend for the financial year under review. Accordingly, during the said year, no amount has been transferred to reserves.

INVESTOR SERVICE CENTRE

During the year under review, the Company has changed its Registrar and Transfer Agent from Link Intime India Private Limited to Karvy Computershare Private Limited ("Karvy") w.e.f. February 8, 2014. The details of Karvy is given in the Corporate Governance Report.

DIRECTORS

In accordance with the provisions of Companies Act, 1956, the Company had at its last Annual General Meeting held in the year 2013, re-appointed Mr. Harpal Singh and Dr. P.S. Joshi, who were liable to retire by rotation.

During the Financial Year 2013-14, the Company had appointed Mr. Udai Dhawan as an Additional Director at its meeting held on February 11, 2014. Further, Ms. Lynette Joy Hepburn Brown was also appointed as an Additional Director by the Board at its meeting held on May 29, 2014. Accordingly, it is proposed to appoint Mr. Udai Dhawan as Non- Executive Non-Independent Nominee Director and Ms. Lynette Joy Hepburn Brown as Non-Executive Independent Director at the ensuing Annual General Meeting.

Pursuant to the provisions of Companies Act, 2013 and Clause 49 of Listing Agreement (as amended), the independent directors shall hold office for a tenure of five years. Accordingly, all the above named directors are appointed for a period of five years as per the details given in the notice.

In accordance with the provisions of the Act and Articles of Association of the Company, Mr. Sunil Godhwani and Mr. Gurcharan Das are liable to retire by rotation at the ensuing Annual General Meeting. In terms of Company''s Policy on Director''s Retirement, Mr. Gurcharan Das, having attaining the age of Superannuation has not opted for reappointment and accordingly will cease to be a Director of the Company with effect from the conclusion of the ensuing Annual General Meeting. Since, no proposal has been received for filling the vacancy, for the present it is proposed not to fill the vacancy created by the retirement of Mr. Das. The Board of Directors extends their sincere appreciation for the valuable contributions made by Mr. Gurcharan Das during his tenure as a Director of the Company.

Mr. Sunil Godhwani, being eligible, has offered himself for re-appointment.

Your Directors recommend the re-appointment of Mr. Godhwani, at the ensuing Annual General Meeting.

The Company has received notices in writing together with requisite deposit from members proposing the appointment/re-appointment of Mr. Sunil Godhwani and Mr. Udai Dhawan.

STATUTORY AUDITORS / AUDITORS '' REPORT

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 and being eligible, offer themselves for re- appointment as Statutory Auditors for the financial year 2014-15.

The Company has received a letter dated August 4, 2014 from them to the effect that their re-appointment, if made, would be within the limit prescribed under Section 139 of the 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. S.R. Batliboi & Co., LLP Chartered Accountants, as the Statutory Auditors of the Company.

The Statutory Auditors have, in their report to the Board of Directors on the Consolidated Financial Statements of the Company made the following comments which are self-explanatory:

Emphasis of Matter

a) Attention is drawn to note 11(A) & (B) and note 12(i) & (ii) to the 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 subsidiary ("Escorts Heart Institute and Research Centre Limited") more fully described therein. Based on the advice given by the external legal counsel, no provisions/ adjustments have been considered necessary by the group in this regard in the financial statements. Our opinion is not qualified in respect of the aforesaid matter.

b) Attention is drawn to note 11(C) to the financial statements regarding non-compliance with order of Hon''ble High Court of Delhi in relation to provision of free treatment/ beds to poor by one of the subsidiary ("Escorts Heart Institute and Research Centre Limited") more fully described therein. Based on legal opinion, no provisions/ adjustments have been considered necessary by the group in this regard in the financial statements. Our opinion is not qualified in respect of the aforesaid matter.

c) Attention is drawn to note 11(D) to the financial statements, relating to the order of Navi Mumbai Municipal Corporation (NMMC) received by one of the subsidiary ("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 provisions/ adjustments have been considered necessary by the group in this regard in the financial statements.

Our opinion is not qualified in respect of the aforesaid matters.

The above matters are self explanatory and are categorised as "Matter of Emphasis" hence no comments in this regard has been offered by your Board of Directors.

DISCLOSURES UNDER SECTION 217 (1) & (2) OF THE COMPANIES ACT, 1956

Material Changes/Commitments

Except as disclosed above or elsewhere in this Annual Report, there have been no material changes and commitments, between the end of financial year and the date of this Report, which can affect the financial position of the Company.

Except as disclosed above or elsewhere in this Annual Report, during the financial year under review, no material changes have occurred in the nature of the Company''s business or that of its subsidiaries and generally in the classes of business in which the Company has an interest.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Particulars required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo, is given in Annexure I, forming part of this Directors'' Report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) and 205C and other applicable provisions, if any, of Companies Act, 1956, all unclaimed/ unpaid application money (Rs. 8,09,988/-) remaining unclaimed /unpaid for a period of seven years from the date they became due for payment, in relation to the Company, have been transferred to the Investor Education and Protection Fund established by the Central Government in May, 2014. Accordingly, no claim shall be against the IEPF or the Company for the amounts so transferred nor shall any payment be made in respect of such claim.

PARTICULARS OF EMPLOYEES

The Statement containing particulars of the employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members excluding this Statement. Copies of this statement may be obtained by the members by writing to the Company Secretary at the registered office of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

For the Financial Year 2013-14, the Directors hereby confirm:

(a) that in the preparation of the Annual Accounts for the year ended March 31, 2014, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) that 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 at the end of the financial year and of the profit or loss of the Company for that period;

(c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) that the Directors had prepared the Annual Accounts on a going concern basis.

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 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

Date : August 7, 2014 Malvinder Mohan Singh

Place : Gurgaon Executive Chairman


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting here the Seventeenth Annual Report of your Company together with the Audited Standalone and Consolidated Financial Accounts and the Auditors'' Report thereon for the Year ended March 31, 2013.

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its Subsidiaries are as follows:

[Rs.in Million]

Particulars Consolidated Year ended Year ended March 31, March 31, 2013 2012

Continuing Operations

Operating Income 42,431.66 26,176.72

Other Income 1,520.14 1,755.41

Exceptional items 9,958.88 63.17

Total Income 53,910.68 27,995.30

Total Expenditure 39,273.22 22,806.43

Operating Profit 14,637.46 5,188.87

Less: Finance Charges, 7,649.94 4,257.57 Depreciation & Amortization

Profit before Tax 6,987.52 931.30

Less: Tax Expenses 1,873.91 366.29

Net Profit for the year 5,113.61 565.01

Share in the (Loss)/Profit of 82.37 13.27 Associates

Profits/ (losses) attributable to 289.07 (55.94) Minority Interest

Profit for the year from continuing (4,906.91) 634.22 operations (A)

Discontinuing Operations

Profit before tax from discontinuing operations 969.33 146.31

Tax expense of discontinuing operations 439.25 42.17

Profit after tax and before minority interest from discontinuing operations 530.08 104.14

Profits attributable to minority interest 437.63 16.14

Profit for the year from discontinuing operations (B) 92.45 88.00

Profit for the year (A B) 4,999.36 722.22

The highlights of financial results of your Company as a Standalone entity are as follows:

[Rs.in Million]

Standalone Particulars Year ended Year ended March 31, March 31, 2013 2012

Operating Income 3,529.72 2,812.80

Other Income 1,905.69 1,270.42

Exceptional item - 1,846.24

Total Income 5,435.41 5,929.46

Total Expenditure 3,541.33 2,765.12

Operating Profit 1,894.08 3,164.34

Less: Finance Charges and 1,573.33 1,150.48 Depreciation

Profit before Tax 320.75 2,013.86

Less: Tax Expenses 148.27 -

Net Profit for the year 172.48 2,013.86

OPERATING RESULTS AND PROFITS

The performance of your Company is manifested in the Operating Revenues and Net Profit posted for the year under review. During the year ended March 31, 2013, the Consolidated Revenues from Operations from continuing operations stood at Rs. 42,431.66 Million as against Rs. 26,176.72 Million for the corresponding previous year registering a growth of 62.10%. The Profit before Depreciation, Interest and Tax stood at Rs. 14,637.46 Million as against Rs. 5,188.87 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 stood at Rs. 5,113.61 Million as against Rs. 565.01 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 discontinue operations stood at Rs. 530.08 Million as against Rs. 104.14 Million for the corresponding previous year.

Your Company has continued to strive towards improving the value proposition it offers to the patients and general public and during the year under review, has made further strides in implementing its strategic growth and development initiatives across various facets of the Organization. Expanding and deepening the footprint of network hospitals has helped us to touch increasing number of lives during the year.

Your Company is a leading healthcare delivery provider in Asia. As of March 31, 2013, the healthcare verticals of the company spanned diagnostics, primary care, day care speciality and hospitals, with an asset base in 11 countries, many of which represent the fastest- growing healthcare delivery markets in the world. The company had a network of 70 healthcare facilities (including projects under development), with over 5,400 operational beds and the potential to reach approx. 11,000 beds. Its inpatient healthcare facilities are situated in India, Singapore, Vietnam and Mauritius. The Company''s healthcare facility network is supported by over 600 primary care centres, over 190 specialty day care centres, over 240 diagnostic centres and a base of over 22,000 employees, along with approximately 2,000 people working in its network of managed healthcare facilities. 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.

CAPITAL RAISING AND CHANGES IN CAPITAL STRUCTURE

Changes in Capital Structure

Under the terms of the "Employee Stock Option Plan 2007", the Company allotted 27,620 equity shares of Rs. 10 each, against exercise of vested stock options by the eligible employees during the year.

Accordingly, the issued and paid up Equity Share Capital of the Company increased from Rs. 4,051.80 Million divided into 405,179,715 Equity Shares of Rs. 10 each to 4,052.07 Million divided into 405,207,335 Equity Shares of Rs. 10 each.

LISTING OF EQUITY SHARES/BONDS

The Equity Shares of the Company continue to be listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Further, the existing Foreign Currency Convertible Bonds (FCCBs) are listed on "Bourse de Luxembourg" (Luxembourg Stock Exchange). The requisite annual listing fees have been paid to these Exchanges.

SHARES UNDER COMPULSORY DEMATERIALIZATION

The Equity Shares of your Company are included in the list of specified scripts where delivery of shares in dematerialized (demat) form is compulsory, if the same are traded on a Stock Exchange, which is linked to a Depository. As of March 31, 2013, 99.77% Equity Shares of the Company were held in demat form.

STOCK OPTIONS

The Company had instituted two stock option plans viz, Employees Stock Option Plan 2007 (Plan 2007) and Employees Stock Option Plan 2011 (Plan 2011). During the year under review, Plan 2011 was amended in the Annual General Meeting held on September 29, 2012 by way of Special Resolution to make a provision for formation of ''Fortis Healthcare Limited Employees Welfare Trust'' to administer and implement the ESOP scheme.

During the year under review, no fresh grants were made by the Company under the Plan 2007 and Plan 2011. The relevant details of the Stock Options outstanding as on March 31, 2013 have been set out in Annexure I to this Directors'' Report.

SUBSIDIARY COMPANIES

During the year under review:

— The Company initiated internal corporate restructuring within the Group with a view to streamline and focus Group Companies'' resources and energies on different divisions and undertakings and to align the businesses with the internationally emerging trends by moving towards innovative and cost effective methods such as transformation to asset light models. Subsequent to it RHT, a business trust established in Singapore, was listed on Singapore Exchange Securities Trading Limited in October, 2012.

— In June 2012, SRL Ltd., a subsidiary of the Company, witnessed equity capital infusion by NYLIM Jacob Ballas India Fund III LLC, Mauritius ("NJBIF") and International Finance Corporation ("IFC"). NJBIF and IFC infused Rs. 2,500 million and Rs. 1,200 million respectively in SRL in the form of Compulsorily Convertible Preference Shares ("CCPS"). Post conversion of the CCPS, the company''s effective stake in SRL would stand reduced to 54% from 71% presently.

— Fortis Healthcare Australia Pty Limited (FHA), a wholly owned subsidiary of the Company entered into a Non-Binding Indicative offer to divest its 63.51% holding in Dental Corporation, Australia to BUPA Dental Corporation Ltd., Australia for a consideration of AUD 276 million.

— Fortis Health Management (North) Limited (''FHMNL'') and Fortis Hospitals Limited (''FHsL'') subsidiaries of the Company have filed an application with Hon''ble Delhi High Court for merger of the FHMNL with FHsL from an appointed date of April 01, 2012 (Scheme), with an objective of reducing administrative cost, overhead, managerial & other expenditure and to bring the expertise, technology & facilities under one roof. It would also simplify corporate structure which would provide management more scope to focus on development of business of the companies. In July 2013, the Scheme has been approved by High Court of Delhi.

EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956 (the Act), provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. Accordingly, in terms of general exemption, the Board of Directors of the Company, in its Meeting held on May 30, 2013, resolved that the Financial Statements and other required documents of the subsidiary companies are not required to be attached with the Balance Sheet of the Company for this fiscal.

The Annual Accounts of these subsidiary companies and the related information are open for inspection by any member including the members of subsidiary companies at the registered office of the Company and that of subsidiaries concerned, during the working hours on all working days. The Company will make available these documents to the members including members of subsidiary companies upon receipt of request from them. The members, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary companies.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater 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 said Corporate Governance Report.

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 58A of the Act, and therefore, no amount of principal or interest was outstanding in respect of deposits from the public as of the date of Balance Sheet.

DIVIDEND AND TRANSFER TO RESERVES

Keeping in view the aggressive growth strategy of the Company, the Board of Directors of your Company have decided to plough back the profits and thus, not recommended any dividend for the financial year under review. Also, during the said year, no amount has been transferred to reserves.

DIRECTORS

In accordance with the provisions of the Act and Articles of Association of the Company, Lt. Gen. T. S. Shergill, Mr. Harpal Singh and Dr. P. S. Joshi are liable to retire by rotation at the ensuing Annual General Meeting. Further in terms of Company''s Policy on Director''s Retirement, Lt. Gen. T. S. Shergill, having attaining the age of Superannuation has not opted for re- appointment and accordingly will cease to be a Director of the Company with effect from the conclusion of the ensuing Annual General Meeting. Since, no proposal has been received for filling the vacancy, for the present it is proposed not to fill the vacancy created by the retirement of Lt. Gen. Shergill. The Board of Directors extends their sincere appreciation for the valuable contributions made by Lt. Gen. Shergill during his tenure as a Director of the Company.

Mr. Harpal Singh and Dr. P. S. Joshi, being eligible, have offered themselves for re-appointment.

Your Directors recommend the re-appointment of Mr. Harpal Singh and Dr. P. S. Joshi as referred above, at the ensuing Annual General Meeting.

STATUTORY AUDITORS / AUDITORS'' REPORT

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 and being eligible, offer themselves for re-appointment as Statutory Auditors for the financial year 2013-14.

The Company has received a letter dated May 25, 2013 from them to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224(1B) of the Act, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Act.

Based on the recommendations of the Audit, Risk & Controls Committee, the Board of Directors of the Company proposes the re-appointment of M/s S.R. Batliboi & Co., LLP Chartered Accountants, as the Statutory Auditors of the Company.

The Statutory Auditors have, in their report to the Board of Directors on the Standalone Financial Statements of the Company made the following comments which are self-explanatory:

Emphasis of Matter

We draw attention to note 18 to the financial statements regarding non-provision of proportionate premium on redemption of US Dollar 100,000,000 5% Foreign Currency Convertible Bonds due 2015 amounting to Rs. 986.62 lacs. Management has represented that the redemption premium will be offset against the securities premium account and accordingly, no adjustments have been considered in the accounts and more fully described in note 18 of the accompanying financial statements. Our opinion is not qualified in respect of this matter.

The Statutory Auditors have, in their report to the Board of Directors on the Consolidated Financial Statements of the Company, its subsidiaries and associates, made the following comments which are self-explanatory:

a) We draw attention to Note 12 (a) and (b) to the financial statements which describe the material uncertainty related to the outcome of certain tax demands against the Company aggregating Rs. 8,922.50 (after adjusting Rs. 14,046.56 lacs for which the subsidiary company has a legal right to claim from erstwhile promoters), related to the amalgamation of EHIRC, Delhi Society with EHIRC, Chandigarh Society and thereafter registration of EHIRC, Chandigarh Society as the Company. Pending settlement of the aforesaid matter no adjustments are considered necessary in these financial statements.

b) We draw attention to Note 11 to the financial statement which describes the material uncertainty related to the outcome of the lawsuit filed by the Company against Delhi Development Authority (DDA) for termination of certain land leases allotted by DDA and consequent eviction notices issued to the Company by the Estate Officer of DDA. Pending settlement of the aforesaid matter no adjustments are considered necessary in these financial statements.

c) We draw attention to non-provision of proportionate premium on redemption of US Dollar 100,000,000 5% Foreign Currency Convertible Bonds due 2015 amounting to Rs. 986.62 lacs. Management has represented that the redemption premium will be offset against the securities premium account and accordingly, no adjustments have been considered in these financial statements.

Our opinion is not qualified in respect of the aforesaid matters.

DISCLOSURES UNDER SECTION 217(1) & (2) OF THE COMPANIES ACT, 1956

Material Changes/Commitments

In May 2013, the Issue Committee of the Board of Directors, allotted 34,993,030 Equity Shares at an issue price of Rs. 92 per Equity Share aggregating Rs. 3,219.4 million under an institutional placement program ("IPP") undertaken by the Company in accordance with Chapter VIII-A of the SEBI (ICDR) Regulations.

In May 2013, the Company sold it''s entire equity stake (held through its subsidiary) in Dental Corporation to Bupa Dental Corporation Ltd for a total consideration of AUD 276.0 million. The Company, therefore, no longer hold any interest in the business of Dental Corporation.

In June 2013, the Issue Committee of the Board of Directors, allotted 18,833,700 Equity Shares to International Finance Corporation (IFC), on a preferential basis, at an issue price of Rs. 99.09 per Equity Share aggregating Rs. 1,866.2 million. Additionally, the Company also issued US$ 55,000,000 foreign currency convertible bonds to IFC.

Further the Company, through its subsidiary, recently entered into a definitive agreement to sell its equity stake in Fortis Hoan My Medical Corporation, Vietnam ("Hoan My") to Viva Holdings Vietnam (Pte.) Ltd., a wholly owned subsidiary of Chandler Holdings Limited, for an aggregate consideration of US$ 80.0 million. This transaction is expected to be completed in the second half of Fiscal 2014, subject to applicable shareholder and regulatory approvals. The Company will not hold any interest in the business of Hoan My upon completion of this transaction.

In July 2013, the High Court of Delhi has approved the merger of two subsidiaries of the Company - Fortis Health Management (North) with Fortis Hospitals Limited effective from the appointed date i.e. April 01, 2012.

In August 2013, the Issue Committee of the Board of Directors issued, by way of public subscription, Foreign Currency Convertible Bonds (FCCBs) aggregating US$ 30,000,000. These FCCBs are listed on Singapore Exchange Securities Trading Limited.

Further, the Company is in process of seeking the Member''s approval for preferential allotment to Standard Chartered Private Equity (Mauritius) III Limited.

Except as disclosed above or elsewhere in this Annual Report, during the financial year under review, no material changes have occurred in the nature of the Company''s business or that of its subsidiaries and generally in the classes of business in which the Company has an interest.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Particulars required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo, is given in Annexure II, forming part of this Directors'' Report.

PARTICULARS OF EMPLOYEES

The Statement containing particulars of the employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act,1956, the Report and Accounts are being sent to the members excluding this Statement. Copies of this statement may be obtained by the members by writing to the Company Secretary at the registered office of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

For the Financial Year 2012-13, the Directors hereby confirm:

(a) that in the preparation of the Annual Accounts for the year ended March 31, 2013, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) that 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 at the end of the financial year and of the profit or loss of the Company for that period;

(c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) that the Directors had prepared the Annual Accounts on a going concern basis.

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 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

Date : August 8, 2013 Malvinder Mohan Singh

Place : Gurgaon Executive Chairman


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting here the Fifteenth Annual Report of your Company together with the Audited Standalone and Consolidated Financial Accounts and the Auditors' Report thereon for the Year ended March 31, 2011. Your Company posted robust performance during the year and at the same time expanded its footprint enabling increasingly more people to experience "Fortis Care".

FINANCIAL RESULTS

The highlights of Consolidated Financial Results of your Company and its Subsidiaries are as follows:

[Rs. in Million]

Consolidated

Particulars Year ended Year ended

March 31, 2011 March 31, 2010

Operating Income 14,829.71 9,380.62

Other Income 4,587.53 491.88

Total Income 19,417.24 9,872.50

Total Expenditure 14,346.73 7,966.27

Operating Profit 5,070.51 1,906.23

Less: Finance Charges, 3,544.84 1172.32

Depreciation & Amortization

Profit before Tax & Prior 1,525.67 733.91

Period Items

Less: Tax Expenses 152.39 33.56

Less: Prior Period Items 10.31 0.30

Net Profit for the year 1,362.97 700.05

Profit attributable to Minority 44.23 20.85 Interest

Share in the (Loss)/Profit of (75.10) 15.61 Associates

Net Profit attributable to the 1,243.64 694.82 shareholders of the Company

The highlights of financial results of your Company as a Standalone entity are as follows:

[Rs. in Million]

Standalone

Particulars Year ended Year ended

March 31, 2011 March 31, 2010

Operating Income 2,582.71 2,098.16

Other Income 1,824.65 411.47

Total Income 4,407.36 2,509.63

Total Expenditure 2,349.27 1,874.89

Operating Profit 2,058.09 634.74

Less: Finance Charges and 640.46 330.61

Depreciation

Profit before Tax & Prior 1,417.63 304.13 Period Items

Less: Prior Period Items (0.47) 2.67

Net Profit/ (Loss) attributable to 1,418.10 301.46 the shareholders of the Company

OPERATING RESULTS AND PROFITS

The sound performance of your Company is manifested in the Operating Revenues and Net Profit posted for the year under review. During the year ended March 31, 2011, the Consolidated Revenues from Operations stood at Rs.14,829.71 Million as against Rs.9,380.62 Million for the corresponding previous Year registering a growth of 58%. The Profit before Depreciation, Interest and Tax stood at Rs. 5,070.51 Million as against Rs.1,906.23 Million for the corresponding previous Year, registering a growth of 166%. The Net Profit after Tax but before Profits attributable to Minority Interst and Share in the losses of Associates stood at Rs.1,362.97 Million, registering a growth of 95% over the previous year.

Your Company made further strides in implementing its strategic growth and development initiatives across various facets of the Organization. Expanding and deepening the footprint of network hospitals has helped us to touch increasing number of lives during the year and your Company continues to strive towards improving the value proposition it offers to the patients and general public.

A detailed discussion on Operational and Financial Performance of the Company for the year, is given in "Operations Reviews" and "Management Discussion and Analysis" Sections of this Annual Report.

CHANGE OF NAME

Over the last decade, your Company has made substantial progress towards establishing itself as a leading player in Indian Healthcare Market. With the current strength of 62 Network Hospitals and allied businesses in India, your Company is aggressively expanding its footprint and market share in the Indian Healthcare Industry, which is expected to grow at 15-16% over the foreseeable future.

Further, as the Fortis Group moves from a single country to a multi- country model, in order to ensure that there is clarity and alignment (both internally and externally), the Board of Directors of your Company had, on January 10, 2011, revisited the Company's corporate identity and proposed to change the name of the Company from "Fortis Healthcare Limited" to "Fortis Healthcare (India) Limited" and the same was approved by the Shareholders by way of Postal Ballot on February 21, 2011. With the approval of the Registrar of Companies, NCT of Delhi & Haryana, Ministry of Corporate Affairs, the name of the Company has been changed to "Fortis Healthcare (India) Limited" effective March 07, 2011.

CAPITAL RAISING AND CHANGES IN CAPITAL STRUCTURE

Capital Raising

In May 2010, the Company issued 1,000, 5 % Foreign Currency Convertible Bonds of US$ 1,00,000 each, aggregating US$ 100 Million. These bonds are listed on "Bourse de Luxembourg" (Luxembourg Stock Exchange) and are convertible at the option of the bondholders between May 2013 and May 2015.

Further, on June 24, 2010 , the Company, in terms of the Letter of Offer dated September 22, 2009, for the Rights Issue of Equity Shares with Detachable Warrants, issued 87.71 Million equity shares of Rs.10 each against conversion of Detachable Warrants, at an exercise price of Rs.153 per warrant, aggregating to Rs.13,420 Million.

In terms of "Employee Stock Option Plan 2007", the Company allotted 67,880 equity shares of Rs.10 each, against exercise of vested stock options by the eligible employees during the year.

Changes in Capital Structure

During the year under review, the issued and paid up Equity Share Capital of the Company increased from Rs.3173.24 Million divided into 317,323,609 Equity Shares of Rs.10 each to Rs.4,051.03 Million divided into 405,103,475 Equity Shares of Rs.10 each, by way of issue of Equity Shares against the conversion of warrants and exercise of vested stock options, as referred above.

LISTING OF EQUITY SHARES / BONDS

The Equity Shares of the Company continue to be listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). Further, the Foreign Currency Convertible Bonds (FCCBs) issued during the year are listed on on "Bourse de Luxembourg" (Luxembourg Stock Exchange). The requisite annual listing fees have been paid to these Exchanges.

SHARES UNDER COMPULSORY DEMATERIALIZATION

The Equity Shares of your Company are included in the list of specified scripts where delivery of shares in dematerialized (demat) form is compulsory, if the same are traded on a Stock Exchange, which is linked to a Depository. As of March 31, 2011, 99.74% Equity Shares of the Company were held in demat form.

STOCK OPTIONS

During the year under review, 1,302,250 Stock Options were granted under the "Employee Stock Option Plan 2007" to the eligible employees and Directors of the Company / its subsidiaries.

The relevant details of the Stock Options granted during the year and outstanding as on March 31, 2011 have been set out in Annexure II to this Directors' Report.

SUBSIDIARY COMPANIES

During the year under review:

- In order to provide holistic care to diabetes patients, your Company plans to set up speciality centres under the brand name "Fortis C- Doc" and has floated a step down subsidiary under the name and style of "Fortis C - Doc Healthcare Limited" - a 60:40 Joint Venture with Professor Anoop Misra, an internationally acclaimed diabetes expert and researcher.

- One of the subsidiary companies of your Company viz. Escorts Heart Institute and Research Centre Limited (EHIRCL), acquired 100% stake in Fortis Asia Healthcare Pte Ltd. (FAHPL) and thus, FAHPL has become a step down wholly-owned subsidiary of your Company w.e.f. January 07, 2011.

- By virtue of Share Subscription Agreement dated February 01, 2011, EHIRCL also acquired 29.39% stake in Fortis HealthStaff Limited (FHSL) and has also taken control over the composition of Board of Directors of FHSL, thereby making FHSL, a step down subsidiary of the Company in terms of Section 4(1)(a) of the Companies Act, 1956.

- On March 31, 2011, Fortis Global Healthcare Infrastructure Pte. Limited, Singapore (FGHIPL) was incorporated as a wholly-owned subsidiary of Fortis Healthcare International Limited.

Existing Subsidiaries- Changes during the year

In March 2011, your Company has, through one of its wholly-owned subsidiary viz. International Hospital Limited, further increased its stake in Fortis Malar Hospitals Limited (FMHL) from 50.02% to 63.20% by acquiring 2.45 Million Equity Shares from Oscar Investments Limited, through a block deal as inter-se transfer of shares between "Qualifying Promoters" in accordance with Regulation 3(1)(e)(iii) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

As a part of restructuring, the shareholding of various Companies under the Fortis Group, Fortis Hospotel Limited (FHTL), one of the wholly owned subsidiary of the Company, sold its entire stake in Fortis Health Management Limited (FHML) and FHML is currently being held by Kanishka Healthcare Ltd (49.98%), EHIRCL (0.04%) and FGHIPL (49.98%). Further, on March 04, 2011, entire stake in Escorts Heart Centre Limited was sold by EHIRCL to Fortis Healthcare Holdings Ltd., the Holding Company of the Company.

EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. Accordingly, in terms of general exemption, the Board of Directors of the Company, in its Meeting held on May 27, 2011, resolved that the Financial Statements and other required documents of the subsidiary companies are not required to be attached with the Balance Sheet of the Company for this fiscal.

The Annual Accounts of these subsidiary companies and the related information are open for inspection by any member including the members of subsidiary companies at the registered office of the Company and that of subsidiaries concerned, during the working hours on all working days. The Company will make available these documents to the members including members of subsidiary companies upon receipt of request from them. The members, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary companies.

GROUP

"Persons" constituting "Group" as defined under the Monopolies and Restrictive Trade Practices Act, 1969, for the purpose of Regulation 3(1)(e)(i) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended from time to time, include the following:

a. Mr. Malvinder Mohan Singh and his spouse;

b. Mr. Shivinder Mohan Singh and his spouse;

c. Escorts Heart and Super Speciality Hospital Limited;

d. Escorts Heart and Super Speciality Institute Limited;

e. Escorts Heart Centre Limited;

f. Escorts Heart Institute and Research Centre Limited;

g. Escorts Hospital and Research Centre Limited;

h. Fortis Asia Healthcare Pte Limited;

i. Fortis C - Doc Healthcare Limited;

j. Fortis Emergency Services Limited;

k. Fortis Global Healthcare (Mauritius) Limited;

I. Fortis Global Healthcare Infrastructure Pte Limited;

m. Fortis Health Management (East) Limited;

n. Fortis Health Management (North) Limited;

o. Fortis Health Management (South) Limited;

p. Fortis Health Management (West) Limited;

q. Fortis Health Management Limited;

r. Fortis Healthcare (India) Limited;

s. Fortis Healthcare Global Pte Limited;

t. Fortis Healthcare Holdings Limited;

u. Fortis Healthcare India Holdings Pte Limited;

v. Fortis Healthcare International Limited;

w. Fortis Healthcare International Pte Limited;

x. Fortis Hospital Management Limited;

y. Fortis Hospitals Limited;

z. Fortis Hospotel Limited;

aa. Fortis Malar Hospitals Limited;

bb. International Hospital Limited;

cc. Kanishka Healthcare Limited;

dd. Lalitha Healthcare Private Limited;

ee. Malar Stars Medicare Limited;

ff. Malav Holdings Private Limited;

gg. RHC Holding Private Limited;

hh. RHC Holding Pte Limited;

ii. Shivi Holdings Private Limited;

jj. Super Religare Laboratories Limited;

kk. Hospitalia Eastern Private Limited;

II. Fortis HealthStaff Limited;

mm. Religare Wellness Limited;

nn. Medsource Healthcare Private Limited;

oo. Hiranandani Healthcare Private Limited;

pp. RHC Finance Private Limited;

qq. RHC Financial Services (Mauritius) Limited;

rr. Today Holding Private Limited;

ss. Fortis Global Healthcare Limited;

tt. Fortis Medicare International Limited

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater 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 the Statutory Auditors of the Company regarding compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexed with the said Corporate Governance Report.

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 58A of the Companies Act, 1956, and therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as of the date of Balance Sheet.

DIVIDEND AND TRANSFER TO RESERVES

Keeping in view the aggressive growth strategy of the Company, the Board of Directors of your Company have decided to plough back the profits and thus, not recommended any dividend for the financial year under review. Also, during the said year, no amount has been transferred to reserves.

DIRECTORS

Dr. Brian William Tempest has been co-opted as an Additional Director on the Board of the Company w.e.f. August 02, 2011. Pursuant to the provisions of Section 260 of the Companies Act, 1956, ("the Act"), Dr. Brian holds the office upto the date of the ensuing Annual General Meeting and is eligible for appointment as a Director of the Company in terms of Section 257 of the Companies Act, 1956. The Company has received a notice under Section 257 of the Companies Act, 1956, proposing the appointment of Dr. Brian William Tempest as the Director, liable to retire by rotation.

Further, in accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Rajan Kashyap, Lt. Gen T S Shergill and Dr. P S Joshi are liable to retire by rotation at the ensuing Annual General Meeting.

Mr. Rajan Kashyap, in view of his pre-occupation, has not offered himself for re-appointment and accordingly, he will cease to be the Director of the Company with effect from the conclusion of the ensuing Annual General Meeting. Since, no proposal has been received for filling up the vacancy, it is decided not to appoint any Director in place of Mr. Rajan Kashyap. The Board of Directors extends their sincere appreciation for valuable contributions made by Mr. Kashyap during his tenure as a Director of the Company.

Lt. Gen T S Shergill and Dr. P S Joshi, being eligible have offered themselves for re-appointment.

Your Directors recommend the appointment/ re-appointment of Dr. Brian William Tempest, Lt. Gen T S Shergill and Dr. P S Joshi, as referred above, at the ensuing Annual General Meeting.

STATUTORY AUDITORS / AUDITORS' REPORT

M/s. S.R. Batliboi & Co., Chartered Accountants, Statutory Auditors of your Company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment as Statutory Auditors for the financial year 2011-12.

The Company has received a letter dated May 23, 2011 from them to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224(1B) of the Act, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Act.

Based on the recommendations of the Audit, Risk & Controls Committee, the Board of Directors of the Company proposes the re-appointment of M/s S.R. Batliboi & Co., Chartered Accountants, as the Statutory Auditors of the Company.

The Statutory Auditors have, in their report to the Board of Directors on the Consolidated Financial Statements of the Company, its subsidiaries and associates, made the following comments:

5. (a) The Delhi Development Authority ('DDA') had terminated the leases of certain land allotted by it to a society (later converted into the company) and then issued eviction notices to Escorts Heart Institute and Research Centre Limited (a subsidiary of the Company) for vacation of these lands. The subsidiary company is in appeal against these actions by DDA which is pending with the court of law and has accordingly not made any adjustments to the carrying value of these lands or to the other assets, as the eventual outcome cannot be estimated presently. Further, in a related case filed against Escorts Heart Institute and Research Centre Limited (a subsidiary of the Company) for provision of services from hospitals operated from these lands, no provisions are made by the subsidiary company as the amounts are currently unascertainable (also refer Note 8 of Schedule 25).

(b) Certain tax demands aggregating to Rs.9,604.30 lacs (without considering the demand of Rs.10,101.01 lacs raised twice in respect of certain years and after adjusting Rs.13,364.86 lacs for which the subsidiary company has a legal right to claim from erstwhile promoters as discussed in detail in Note 9 of Schedule 25), raised on Escorts Heart Institute and Research Centre Limited (a subsidiary of the Company) by the Income Tax Authorities are pending in appeals and the eventual outcome of the above matters cannot presently be estimated.

Accordingly, we are unable to express an opinion at this stage in respect of these matters reported in paragraphs (a) and (b) above and their consequential effect, if any, on the consolidated financial statements. The same were also the subject matter of qualification by us in the previous year as well.

As both the matters are sub-judice and appeals against the demands are pending at various stages, based on the advice received from the legal counsels, the Management is of the view that the matters shall get adjudicated in its favour.

DISCLOSURES UNDER SECTION 217 (1) & (2) OF THE COMPANIES ACT, 1956

Material Changes/Commitments

In May 2011, the Company completed the acquisition of 74.59% of Strategic stake in the equity share capital of Super Religare Laboratories Limited (SRL) for an aggregate amount of Rs.8,036.85 Million, one of India's largest and leading diagnostic services companies, offering diagnostic testing (including Pathology and Radiology), preventive care testing and clinical research testing.

In making SRL an integrated part of its delivery network, it is believed that Fortis will become an integrated heathcare delivery player including expertise in pathology and radiology. SRL has proposed to come out with an Initial Public Offering of its equity shares. During the current year, it has also made preferential allotment of its equity shares to Spring Healthcare India Trust, Spring Healthcare (P) Ltd. and Sabre Capital (Mauritius) Limited. Consequently, the Company's stake in SRL stands at 71.49%.

Except as disclosed above or elsewhere in this Annual Report, there have been no material changes and commitments, between the end of financial year and the date of this Report, which can affect the financial position of the Company.

Further, Kanishka Healthcare Limited (formerly Kanishka Housing Development Company Limited), one of the step down subsidiaries of the Company vide special resolution passed by its members on March 30, 2011, altered the object clause of its Memorandum of Association and decided to foray into healthcare business in line with the business carried on by its Holding Company.

Except as disclosed above or elsewhere in this Annual Report, during the financial year under review, no material changes have occurred in the nature of the Company's business or that of its subsidiaries and generally in the classes of business in which the Company has an interest.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Particulars required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo, is given in Annexure I, forming part of this Directors' Report.

PARTICULARS OF EMPLOYEES

The Statement containing particulars of the employees as required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act,1956, the Report and Accounts are being sent to the members excluding this Statement. Copies of this statement may be obtained by the members by writing to the Company Secretary at the registered office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

For the Financial Year 2010-11, the Directors hereby confirm:

i. that in the preparation of the Annual Accounts for the year ended March 31, 2011, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

ii. that 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 at the end of the financial year and of the profit or loss of the Company for that period;

iii. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. that the Directors had prepared the Annual Accounts on a going concern basis.

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 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

Date: August 12, 2011 Malvinder Mohan Singh

Place: New Delhi Chairman





 
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