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Directors Report of Fortis Healthcare Ltd.

Mar 31, 2023

Your Directors have pleasure in presenting herewith the Twenty Seventh Annual Report of your Company along with the Audited Standalone and Consolidated Financial Statements and the Auditors'' Report thereon for the Year ended March 31, 2023.

FINANCIAL RESULTS

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

('' in Lakhs)
Particulars		Consolidated
		Year ended March 31, 2023	Year ended March 31, 2022
1.	Revenue from operations	629,763	571,761
2.	Other income	6,172	2,734
3.	Total income (1 2)	635,935	574,495
4.	Expenses
(a) Purchases of medical consumable and drugs		145,465	140,337
(b) Changes in inventories of medical consumable and drugs		6	(4,614)
(c) Employee benefits expense		104,688	97,294
(d) Finance costs		12,909	14,685
(e) Professional charges to doctors		131,146	110,130
(f) Depreciation and amortisation expense		31,574	30,084
(g) Other expenses		138,324	121,718
Tota	expenses	564,112	509,634
5.	Net profit / (loss) from continuing operations before share in profit / (loss) of associates and joint ventures, exceptional items and tax (3-4)	71,823	64,861
6.	Add: Share in profit of associate companies and joint ventures	2,184	2,415
7.	Net profit / (loss) before exceptional items and tax (5 6)	74,007	67,276
8.	Exceptional gain (refer note 4)	7,361	31,503
9.	Profit / (loss) before tax from continuing operations (7 8)	81,368	98,779
10.	Tax expense / (credit)	18,070	19,784
11.	Net profit / (loss) for the period from continuing operations (9-10)	63,298	78,995
12.	Profit / (loss) before tax from discontinued operations	-	-
13.	Tax expense of discontinued operations	-	-
14.	Net profit / (loss) for the period from discontinued operations (12-13)	-	-
15.	Net profit / (loss) for the period (11 14)	63,298	78,995
16.	Profit / (loss) from continuing operations attributable to:
Owners of the Company		58,873	55,512
Non-Controlling Interest		4,425	23,483
17.	Profit / (loss) from discontinuing operations attributable to:
Owners of the Company		-	-
Non-Controlling Interest		-	-

Particulars	Consolidated
Particulars	Year ended March 31, 2023	Year ended March 31, 2022
18. Other Comprehensive Income (including OCI relating to associates and joint venture) (after tax)	(787)	(4,650)
19. Other comprehensive Income / (Loss) attributable to:
Owners of the Company	(771)	(4,640)
Non-Controlling interest	(16)	(10)
20. Total comprehensive Income / ( Loss) (15 18)	62,511	74,345
21. Total comprehensive Income / (Loss) attributable to:
Owners of the Company	58,102	50,872
Non-Controlling interest	4,409	23,473
The highlights of standalone financial performance are as follows:		('' in Lakhs)
Particulars	Standalone
Particulars	Year ended March 31, 2023	Year ended March 31, 2022
Continuing Operations
1. Operating Income	105,293	86,261
2. Other Income	14,957	13,410
3. Total Income (1 2)	120,250	99,671
4. Total Expenditure (Excluding finance cost, depreciation & tax expenses)	91,979	74,721
5. Operating Profit (EBITDA) (3-4)	28,271	24,950
6. Finance Charges, Depreciation & Amortisation	22,212	24,221
7. Profit before exceptional items and tax (5-6)	6,059	729
8. Exceptional items	4,829	(1,628)
9. Profit before tax (7 8)	10,888	(899)
10. Tax Expenses	1,264	426
11. Net Profit for the year (9-10)	9,624	(1,325)
12. Share in profits of associate companies		-
13. Profit for the year from continuing operations (11 12)	9,624	(1,325)
14. Discontinuing Operations
Profit / (Loss) before tax from discontinuing operations	-	-
Tax expense of discontinuing operations	-	-
Profit / (Loss) after tax and before minority interest from discontinuing operations	-	-
Share in profits / (losses) of associate companies	-	-
Profit for the year from discontinuing operations	-	-
15. Profit for the year (13 14)	9,624	(1,325)
Other comprehensive income	(127)	28
Total comprehensive income (15 16)	9,497	(1,297)

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

For the FY 23, the Company reported a consolidated revenue from operations of '' 6,298 Crores compared to '' 5,718 Crores reported for FY 22. Revenue from Hospital business stood at '' 5,107 Crores compared to '' 4,264 Crores reported during the corresponding year. Agilus Diagnostics Limited ("Agilus"), the diagnostic business of the Company, reported gross revenues of '' 1,347 Crores compared to '' 1,605 Crores in the previous financial year. Considering elimination of inter-company revenue (within the group), net revenue of Agilus was at '' 1,190 Crores compared to '' 1,453 Crores in FY 22.

The growth in hospital business was led by higher occupancy at 67% versus 63% in FY 22 and also due to 11.5% growth in ARPOB at '' 2.01 Crores compared to '' 1.80 Crores. The Company''s focus specialties comprising oncology, gastroenterology, neurosciences, renal sciences, orthopaedics and cardiac sciences grew 31.5% YoY. Revenue from International business recorded growth of 97.9% in FY 23 to reach '' 425 Crores compared to '' 215 Crores in FY 22.

Decline in diagnostics business revenue in FY 23 was primarily due to significant drop in covid volumes and associated revenues. Covid business revenues contributed 4% to overall diagnostic revenues in FY 23 compared to 28% in FY 22. However, Non Covid revenue witnessed 12% growth over FY 22.

The consolidated EBITDA of the Company stood at '' 1,163 Crores compared to '' 1,096 Crores for the previous corresponding year. EBITDA margin of the Company stood at 18.5% versus 19.2% in FY 22. Hospital business EBITDA for FY 23 was at '' 900 Crores (excluding the dividend income of 21.9 Crores) compared to '' 672 Crores reported for FY 22. EBITDA margin of the hospital business stood at 17.6% versus 15.8% in FY 22.

The diagnostic business of the Company reported EBITDA of '' 263 Crores compared to '' 425 Crores reported in the previous corresponding year. EBITDA margin of the diagnostic business stood at 19.5% versus 26.5% (basis gross revenue) for the year FY 22. The decline in EBITDA was primarily due to higher covid mix in 2021-22 and significantly lower contribution of Covid revenues in 2022-23.

Profit after tax for FY 23 stood at '' 633 Crores compared to '' 790 Crores in FY 22. PAT of '' 633 Crores include exceptional gain of '' 74 Crores which pertains to reversal of impairment in an associate Company while PAT of '' 790 Crores in FY 22 includes an exceptional gain of '' 306 Crores on remeasurement of the previously held equity interest of Agilus in the DDRC SRL Diagnostics Limited*- JV, at its fair value post acquisition of the balance 50% stake in the said JV in April 2021.

The Company maintained a comfortable liquidity position with net debt of '' 330 Crores as on March 31, 2023 compared to '' 549 Crores as on March 31,2022 (net debt to equity of 0.04x vs 0.08x, respectively). Gross debt of the Company stood at '' 703 Crores as on March 31, 2023 versus '' 966 Crores as of March 31, 2022.

All decisions at your Company are taken keeping in mind the patient at the center. Fortis'' primary objective is to become the most trusted healthcare provider in India. Accordingly, your Company makes efforts to consistently improve the quality of all its services. Your Company has put together ultra-modern healthcare facilities equipped with best-in-class diagnostic and therapeutic technology and a competent team comprising of some of the finest clinical and paramedical talent available in the country. All the Fortis facilities, whether owned or operated by your Company follow globally accepted medical protocols and procedures and are focused on delivering the best possible clinical outcomes. Your Company''s healthcare facilities provide high standards of secondary, tertiary and quaternary healthcare services in the specialties of Cardiac Sciences, Orthopaedics, Neurosciences, Oncology Sciences, Renal Sciences, Gastro Sciences and Mother and Child care.

During the year 2022-23, your Company further strengthened its prime medical programs in key facilities across India with addition of several eminent clinicians in Cardiac Sciences, Oncology, Neuro-Sciences, Gastroenterology and Orthopedics. The organisation invested heavily in high-end medical infrastructure and equipment including LINAC, PET CT, Gamma Knife, Da Vinci Surgical Robot, Cath Labs, Neuro-Navigation Systems and Ortho Robot.

Your Company continued to work on cluster synergies and focused its efforts towards developing synergies in Sales and Marketing, Supply Chain and Human resources. Also, several eminent clinicians were engaged with multiple units in a cluster, providing synergy to medical programs. The focus on cost transformation continued through our efforts on implementing a comprehensive program that aims to rationalise drugs and consumables cost and bring in capex efficiencies. Additionally, your Company endeavors to commission over 1,400 new

beds over the next 2 to 3 years in existing facilities to leverage economies of scale - majority of bed additions are planned in Noida, BG Road, Anandapur, Mulund, Shalimar Bagh, FMRI, and Mohali.

The healthcare vertical of the Company primarily comprise day care specialty, diagnostics and tertiary and quaternary care. As of March 31, 2023, the Company had a network of 27 healthcare facilities in India with approximately 4,500 operational beds including beds under the O&M model.

In addition, its Indian diagnostics business has a presence in over 1000 cities and towns, with an established strength of over 410 laboratories, 43 Accreditations (NABL/NABH/CAP) and a footprint spanning 3700 customer touch points.

There has been no change in the nature of business of the Company during the year under review. The Company continues its endeavor to provide quality healthcare services with an emphasis on high degree of clinical outcomes and an unparalleled patient experience.

Further information on Company performance is detailed in the Company section of the "Management Discussion and Analysis" in the Annual Report.

SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW

The Company strategically reviewed and prioritized key areas to drive revenues and operational performance. These include aspects related to evaluating the current portfolio of the Company''s facilities and planned bed expansion, initiating cost optimisation measures across the network, investing in technology and medical equipment and further strengthening its clinical excellence program. Details about which are mentioned in the Business Strategy section of the Management Discussion and Analysis Report (''MDA'').

Further, the Board has from time to time during the year under review updated its stakeholders regarding the key developments that took place by disseminating necessary information to the stock exchanges and through various means of communications to the investors. Some of key matters are mentioned below:

Post a successful bid, your Company had entered into share subscription Agreement dated July 13, 2018, for issuance of 235,294,1 17 Shares at a price of INR 170 per share for an aggregate consideration upto INR 4,000 Crores (Rupees Four Thousand Crores only) to Northern TK Venture Pte Limited ("NTK"), an indirect wholly owned subsidiary of IHH Berhad (''IHH''). Consequently, after obtaining regulatory and statutory approvals such as from Securities and Exchange Board of India,

Competition Commission of India and in terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, IHH made Mandatory Open Offer for acquisition of upto 197,025,660 Equity Shares representing additional 26% of the expanded voting share capital of your Company ("Fortis Open Offer") and another Mandatory Open Offer for acquisition of up to 4,894,308 fully paid up equity shares of face value of INR 10 each, representing 26% of the fully diluted voting equity share capital of Fortis Malar Hospitals Limited ("Fortis Malar Open Offer").

After the Preferential Allotment on November 13, 2018, public announcement was made on December 07, 2018 regarding Fortis Open Offer and Fortis Malar Open Offer, thereafter the Hon''ble Supreme Court of India had on December 14, 2018 passed an order ("Status Quo Order") directing "status quo with regard to sale of the controlling stake in Fortis Healthcare to Malaysian IHH Healthcare Berhad be maintained". In light of the Status Quo Order, Fortis Open Offer and Fortis Malar Open Offer were put on hold until further order(s)/ clarification(s)/ direction(s) issued by the Hon''ble Supreme Court of India. Vide its order dated November 15, 2019, the Hon''ble Supreme Court had issued suo-moto contempt notice to, among others, your Company, and directed its Registry to register a fresh contempt petition in regard to alleged violation of the Status Quo Order ("Contempt Petition").

Petitions before the Hon''ble Supreme Court including the suo-moto contempt have been disposed of vide judgement dated September 22, 2022 ("Judgement"). No finding of contempt has been made against either your Company, or its independent directors. Based on legal advice, the Company is of the clear view that the Status Quo Order dated 14^th December 2018 no longer exists. Therefore, your Company is continuing to pursue actions which are in the best interest of its shareholders and itself. Our promoter is simultaneously seeking legal counsel for pursuing and securing the Open Offer.

In the Judgement, it has been stated by the Hon''ble Supreme Court that RHT Transaction appeared prima facie to be an acquisition of proprietary interest to subserve the business structure of the Company. It also passed certain directions inter alia, that the High Court of Delhi may consider issuing appropriate process and appointing forensic auditor(s) to analyze the transactions entered into between FHL and RHT and other related transactions. Your Company plans to strenuously object to any contemplation of a forensic given that in the Judgment, no wrongdoing by the Company had even been alluded to. The Company''s stated position is that these

transactions were done in compliance with applicable laws, post requisite corporate and regulatory approvals and necessary disclosures/ announcements. Currently, Your Company, is vehemently opposing the application filed by Daiichi before the High court for appointment of forensic auditor.

OTHER RELEVANT MATTERS

Based on complaint filed by your Company with the Economic Offences Wing ("EOW") in November 2020 against the erstwhile promoters/ erstwhile promoters group company in respect of certain transactions, First Information Report (FIR) was registered on July 3, 2021, against them. EOW is investigating the matter. The said Complaint is also being investigated by the Enforcement Directorate and the Company is co-operating and providing requisitioned documents/information to it. Further, pursuant to the order dated 17^th February 2018 of MCA, SFIO has been investigating into the affairs of your Company/ its subsidiaries. The Company is co-operating in the said investigation.

Fortis Hospitals Limited had filed a civil suit for recovery of Rupees 52,019 lacs before Hon''ble Delhi High Court against the ex-promoters and certain entities which is sub-judice.

DIVIDEND AND TRANSFER TO RESERVES

The Board of Directors has recommended a final dividend '' 1 (One) per equity share at the rate of 10% of the face value of the shares of the Company for the year ended March 31, 2023, be paid subject to the approval of the shareholders, to those shareholders whose names appear in the register of members as on the record date in proportion to the paid up value of the equity shares.

Refer the Company''s policy on Dividend Distribution available on the website of the Company at https://www.fortishealthcare.com/ drupal-data/investors/Policy%2Bon%2BDividend%2BDistribution. pdf.

MATERIAL CHANGES

There are no material changes and commitments, affecting the financial position of your Company which have occurred between the end of the FY 23 and the date of this report.

Post closure of the financial year, as part of our inorganic growth strategy, your Company pursuant to the approval of the Board of Directors signed definitive agreements with the VPS Group for the acquisition of Medeor Hospital in Manesar, Gurugram,

Haryana which will add 350 beds to your Company''s network. The acquisition fits well within your Company''s strategic approach of expanding its presence in focus geographic clusters, including Delhi NCR.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Statutory Auditors in their report to the Board of Directors on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("The Act") have given the opinion that the Company and such companies incorporated in India which are its subsidiary companies and joint venture companies (jointly controlled company), have, in all material respects, adequate internal financial controls with reference to consolidated financial statements and the financial statements of the Company and such internal financial controls were operating effectively as at March 31, 2023, based on the internal financial controls with reference to consolidated financial statements and the financial statements of the Company, criteria established considering the essential components of such internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. The Auditor''s opinion on adequacy and operating effectiveness of internal control is self-explanatory.

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

During the year under review there has been no change in the subsidiaries / joint venture and associate Companies.

Further note that your Board of Directors have adopted a policy for determining "material subsidiary" pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said policy is available at https:// www.fortishealthcare.com/drupal-data/investors/ Policv%2BOn%2BMaterial%2BSubsidiarv.pdf

In terms of the said policy, as on April 01, 2023, Fortis Hospitals Limited (FHsL), International Hospital Limited (IHL), Fortis Hospotel Limited (FHTL) and Agilus Diagnostics Limited are considered as Material Subsidiary(ies). Necessary compliances w.r.t. material subsidiaries have been duly carried out. The copies of the Secretarial Audit Reports of the material subsidiaries issued by the Company Secretary in Practice forms part of this report.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The consolidated financial statements of your 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. Your 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 be available for inspection and are also available on the website of the Company. Performance and financial position of each of Subsidiaries, Associates and Joint Ventures included in the Consolidated Financial Statements of your Company is enclosed herewith as "Annexure - I" in the prescribed format (Form AOC-1).

The contribution of the subsidiary/associates/joint venture companies to the overall performance of your Company is outlined in Note No. 26 of the Consolidated Financial Statements for the year ended March 31, 2023.

LOANS/ADVANCES/INVESTMENTS/GUARANTEES

Particulars of Loans / Advances / Investments /guarantees given and outstanding during the FY 23 forms part of the Notes to the Financial Statements.

PUBLIC DEPOSITS

During the financial year under review, your Company has not invited or accepted any deposits from the public, pursuant to the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as of the date of Balance Sheet.

UTILISATION OF FUNDS

The details of utilisation of funds earlier raised through preferential allotment are mentioned in Notes to Financial Statements. During the year under review, no preferential allotment was made by the Company.

AUDITORS

M/s B S R & Co. LLP, (Registration No. 101248W/W- 100022), Chartered Accountants, were appointed as Statutory Auditors of your Company for a period of five years i.e. up to the conclusion of the Annual General Meeting to be held in the

year 2024.

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 selfexplanatory and are categorised as "Emphasis of Matter", hence no comments in this regard have been offered by your Board of Directors:

a) Note 27 and 28 of the consolidated financial statements which deals with various matters including the ongoing investigation by Serious Fraud Investigation Office ("SFIO on Fortis Healthcare Limited and its subsidiaries regarding alleged improper transactions and non-compliances with laws and regulations including Companies Act, 2013 (including matters relating to remuneration paid to managerial personnel). These transactions and noncompliances relate to or originated prior to take over of control by reconstituted board of directors of Fortis in the year ended March 31,2018. As mentioned in the note, the Group has been submitting information required by SFIO and is also cooperating in the regulatory investigations.

As explained in the said note, the Group had recorded significant adjustments/ provisions in its books of account during the year ended March 31, 2018. The Company has launched legal proceedings and has also filed a complaint with the Economic Offences Wing (''EOW'') against erstwhile promoters and their related entities based on the findings of the investigation conducted by the Group. Further, based on management''s detailed analysis and consultation with external legal counsel, a further provision has been made and recognised in the year ended March 31, 2021 for any contingency that may arise from the aforesaid issues. As per the management, any further Financial impact, to the extent it can be reliably estimated as at present, is not expected to be material.

b) Note 29 of the consolidated financial statements relating to the order dated September 22, 2022 of the Hon''ble Supreme Court, whereby it has directed the Hon''ble High Court of Delhi inter alia that it may also consider issuing appropriate process and appointing forensic auditor(s) to analyse the transactions entered into between the Company and RHT Health Trust and other related transactions. The above-mentioned Note also states that the Hon''ble Supreme Court has observed that prima facie, it appears to be acquisition of proprietary interest of RHT Health Trust by the Holding Company are to subserve the business structure of the Holding Company.

Further, as per the requirement of Companies Auditor Report Order (CARO), Rules, 2016, there was no fraud other than as disclosed pertaining to earlier years reported by the above stated auditors during the year under review.

â¢ Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by your Company in respect of its hospital activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Jitender, Navneet & Co., Cost Accountants to audit the cost accounts of your Company for the FY 23 at a remuneration of '' 3.5 Lakhs (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 in the Notice convening the ensuing Annual General Meeting. Further, in terms of the Companies (Accounts) Rules, 2014, it is confirmed that maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is applicable on your Company and accordingly such accounts and records are properly made and maintained.

â¢ 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 had appointed M/s. Sanjay Grover & Associates, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Company has complied with the provisions of Secretarial Standards. The Secretarial Audit Report is enclosed herewith as "Annexure - II".

Further, pursuant to the provisions of Regulation 24A, the secretarial audit reports of material subsidiaries are attached as Annexure- II(A).

â¢ Internal Auditors

Upon the recommendation of the Audit Committee, the Board of Directors has appointed Mr. Rajiv Puri, Head Risk and Internal Audit as the Chief Internal Auditor of your Company and authorised him to engage independent firm(s), if needed, for conducting the internal audit for the FY 23 to enable him to extend adequate coverage of internal audit checks.

For FY 23, Internal Audit(s) were performed in accordance with the Internal Audit plan approved by the Audit Committee. In addition to the internal IA team conducting audit(s) covering key business processes as per approved plan, Deloitte was engaged as an external service provider to perform Internal Audit for specific processes.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During FY 2017-18 the Company, the Securities and Exchange Board of India (SEBI), initiated investigation w.r.t. siphoning of approx. INR 5 billion by its ex-promoters. Post investigation, SEBI had issued two Show Cause Notices i.e., dated November 12, 2020 (SCN 1) and April 9, 2021 (SCN 2), respectively.

A Show-Cause Notice (SCN- 1) was issued by SEBI to various entities including the Company and FHsL on November 20, 2020. In the SCN- 1, it was inter-alia alleged that the consolidated financials of the Company at the relevant period were untrue and misleading for the shareholders of the Company and the Company had circumvented certain provisions of the SEBI Act, Securities Contracts (Regulation) Act, 1956, and certain SEBI regulations. In response, a joint representation/reply was filed by the Company and FHsL on December 28, 2020 praying for quashing of the SCN- 1 by inter alia reiterating that the Company and FHsL, were in fact victims of the schemes of the Erstwhile Promoters (Malvinder Mohan Singh and Shivinder Mohan Singh) and justice, equity and fairness demands that the victim ought not be punished for the offences of the wrongdoers. All acts impugned in the SCN- 1 relate to the period when the Erstwhile Promoters controlled the affairs of Company and FHsL and the erstwhile Promoters are no longer involved in the affairs of the Company and FHsL. The Erstwhile Promoters were responsible for financial misrepresentation and not the Company and FHsL. Post resignation of the Erstwhile Promoters in February 2018, the Board of Directors of the Company, solely comprising independent Directors looked after its welfare. The new promoter of the Company

(i.e. NTK Venture Pte. Ltd.) assumed control of the Company pursuant to a preferential allotment, which was approved by both Competition Commission of India and SEBI, which approved the open offer that had got triggered pursuant to such preferential allotment. Any adverse orders against the Company and FHsL would harm their existing shareholders, employees and creditors. The Company and FHsL have taken substantial legal actions against the Erstwhile Promoters and significant steps to recover the diverted amounts. SEBI passed an order dated 19.04.2022 w.r.t SCN -1 directing the Company & FHsL to pursue the measures taken to recover the amount of INR 397.12 Crores (approx.) along with the interest from Erstwhile Promoters; & Audit Committee to regularly monitor the progress of such measures and report the same to board of directors at regular intervals. SEBI had imposed a penalty of Rs. 50 lakh and Rs. 1 Crore on FHsL and the Company respectively.

On April 09, 2021, SEBI issued another Show cause notice (SCN - 2) to various noticees including Escorts Heart Institute and Research Centre Limited ("EHIRCL"). In the said show cause notice, with respect to EHIRCL, it was alleged that INR 567 crore was lent by the Company to EHIRCL in 2011, which was subsequently transferred by EHIRCL to Lowe Infra and Wellness Private Limited ("Lowe") in multiple transactions for the purchase of a land parcel. This land parcel, which was allegedly indirectly to be acquired by the Company through its subsidiary EHIRCL and another entity Lowe, was then transferred to RHC Holdings Private Limited ("RHC Holdings"). It was stated in the said Show cause notice that a structured rotation of funds was carried out to portray that the loan extended by the Company for the purchase of land had been paid back with interest in the year 2011. It is alleged that the Company was actually paid back by RHC Holding over a period of four years ending on July 31, 2015. In this respect, the Company and FHsL funds were allegedly routed through various layers in order to camouflage the transactions, and to circumvent legal provisions with respect to related party transactions.

In the Show cause Notice dated April 9, 2021 EHIRCL had been clubbed along with the other noticees, and had been painted with the same brush as the other noticees in alleging that certain noticees, including EHIRCL, were part of a fraudulent and deceptive device wherein they acted in fraudulent manner which led to the misuse and/or diversion of funds from a listed company i.e. FHL, amounting to approximately Rupees 397.12 crore for the ultimate benefit of RHC Holdings and the erstwhile promoters. Thereby, it is alleged that EHIRCL has aided and abetted the routing of funds from the Company, ultimately to RHC Holdings, for the benefit of the promoter entities.

Further, after adjudicating the Show Cause Notice dated April 9, 2021, SEBI passed an order dated 18.5.2022 wherein it held that EHIRCL is responsible for fraudulent scheme perpetrated at the behest of the then management of FHL/FHsL for the benefit of their then promoters and therefore has violated the relevant provisions of SEBI (PFUTP) Regulations. SEBI acknowledged the fact that EHIRCL working under a completely new management presently and the said revamped management has already taken steps against the erstwhile promoters for the fraud perpetrated under their watch, shall serve as a mitigating factor while computing the penalty under section 15HA of the SEBI Act. Having said this, SEBI vide order dated 18.5.2022 imposed a penalty of INR 1 crore on EHIRCL for violation of certain provisions of SEBI laws. The reasoning that was adopted for imposition of penalty on EHIRCL appears to be exactly on the same lines as the reasoning in the case of FHL and FHsL.

SEBI vide order dated May 18, 2022, passed in the Show Cause Notice dated April 9, 2021, imposed a penalty of INR 1 (one) Crore on EHIRCL after finding that there has been violation of certain provisions of SEBI laws. While imposing the said penalty, SEBI acknowledged that EHIRCL working under a completely new management presently and the said revamped management have already initiated civil and criminal actions against the erstwhile promoters for the fraud perpetrated under their watch.

Both the orders dated 19.4.2022 and 18.5.2022 passed by SEBI have been appealed against by the Company, FHsL and EHIRCL before Securities Appellate Tribunal, Mumbai ("SAT"). Pursuant thereto, SAT has stayed both the SEBI Orders dated 19.4.2022 and 18.5.2022 respectively subject to deposit of 50% of the penalty amount with SEBI, which has been deposited in compliance of SAT orders. Appeals are pending adjudication.

CAPITAL STRUCTURE/STOCK OPTION

During the year under review, there is no change in the capital structure of the Company.

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 '' 10 each of the Company. During the year under review, no option was granted by the Company. Disclosure pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 for the year ended March 31,2023 is available at the website of the Company at https://www.fortishealthcare.com/investors-Annual Report / ESOP Disclosure 2022-23.

During the year under review, "no stock options were granted or exercised under the terms of the "Employee Stock Option Plan 2007 and "Employee Stock Option Scheme 2011".

The certificate from the Secretarial Auditors of the Company stating that the Schemes have been implemented in accordance with the SEBI Regulations would be placed at the ensuing 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.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Company''s website at https://www.fortishealthcare.com/ drupal-data/2023-07/Annual%20Return%20MGT-7%20 2022-23 0.pdf.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The 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 - III", forming part of the Board''s Report. Further, details pertaining to Foreign Exchange Earnings and Outgo is as given below:

TOTAL FOREIGN EXCHANGE EARNED AND USED (BASED ON STANDALONE FINANCIAL STATEMENTS)

('' in Crores)
Particulars	Amount
Foreign Exchange earned in terms of Actual Inflows	10.79
Foreign Exchange outgo in terms of Actual Outflows	2.34
Note: Earning and expenditure in foreign currency is on accrual
basis.

CORPORATE SOCIAL RESPONSIBILITY - OUR JOURNEY THROUGH THE PAST YEAR

The Board of Director has approved the CSR policy for the Company. The said policy approaches this area under the philosophy that the Company efforts should strive towards building and sustaining a healthier humanity. The policy elucidates the concep t of growing our business in a socially and environmentally responsible manner through an active role in empowering communities and driving social development and positive change.

With the above in mind the policy seeks as an objective to bring focus, leveraging its inherent skills, experience and knowledge.

The policy holds itself out as a forward-looking aspirational charter which recommends liberal interpretation, promotes activity under the spirit of partnership and recommends that initiatives be targeted to the needs of the disadvantaged, vulnerable and marginalised sections of society. While the underlying guidance is to bring alignment of varied activities under the focus umbrella, it recognises the need to record presence and contribution in such weak links in society where its mere presence and support could drive significant social benefit. In keeping with such themes, program/s such as supporting charitable healthcare infrastructure, disaster relief, preventive healthcare awareness through different channels of communication, remain well within the range of the policy objectives.

The policy as approved by the Board is available on the Company''s web site at

https://www.fortishealthcare.com/drupal-data/investors/

Corporate%2BSocial%2BResponsibilitv%2BPolicv%2B2022.pdf

During the year, the Company has engaged Sattva Media and Consulting Private Limited ("Sattva Consulting") as an external agency/ advisor for undertaking CSR activities of the Company and its subsidiaries for the financial year 2022-23 to 20232024. Further, Sattva Consulting is engaged in the business of, inter alia, providing consultancy services in the social impact sector and implementation of corporate social responsibility programmes/initiatives.

This year Company and its subsidiaries contributed their CSR Fund to ICMR, Yova Unstoppable, IIT Madras as detailed hereinbelow:
Entity	CSR Obligation for FY 23	CSR PROJECT			Administrative Overheads (max. 5% of CSR Budget)
Entity	CSR Obligation for FY 23	IIT Madras	ICMR	YUVA	Administrative Overheads (max. 5% of CSR Budget)
Fortis Healthcare Limited	4,66,32,689	-	2,12,91,744	2,49,90,945	3,50,000*
Fortis Hospotel Limited	4,69,91,400	87,26,591	3,79,14,809	-	3,50,000*
Agilus Diagnostics Limited	2,84,60,639	2,83,60,639	-	-	1,00,000*
SRL Diagnostics Private Limited¹	73,14,615	72,14,615	-	-	1,00,000*
DDRC SRL Diagnostics Limited²	1,54,98,155	1,53,98,155	-	-	1,00,000*
Total CSR Spend	14,48,97,498	5,97,00,000	5,92,06,553	2,49,90,945	10,00,000*
*Actual amount paid to Sattva Con	suiting for FY 23.

Note: ¹ The new name of the said companies has been reserved by Registrar of Companies (''RoC'') as Agilus Pathlabs Private Limited vide letter dated June 08, 2023. The said company is in the process of making application to the RoC for seeking approval of the new name.

² The new name of the said company has been reserved by Registrar of Companies (''RoC'') as DDRC Agilus Pathlabs Limited vide letter dated June 07, 2023. The said company has made an application to the RoC seeking approval of the new name & the same is awaited.

Report pursuant to Clause O of Sub-Section 3 of Section 134 of the Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is given in "Annexure IV".

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of your Company as on date of this report comprises Eleven (11) directors, of which one (1) is a Managing Director and CEO (Executive Director), four (4) are Independent Directors and rest of the six (6) directors are NonExecutive & Non-Independent Directors. Pursuant to Sections 152 of the Companies Act, 2013, Mr. Joerg Ayrle and Mr. Heng Joo Joe Sim are liable to retire by rotation and being eligible offers themselves for re-appointment at the forthcoming Annual General Meeting of your Company.

During the year under review, Dr. Kelvin Loh resigned from the directorship w.e.f. February 22, 2023; and Mr. Takeshi Saito and Dr. Farid Bin Mohamed Sani resigned from the directorships of the Company w.e.f. March 28, 2023. The Board expressed its gratitude for the service provided by the aforementioned Directors and acknowledged that they took their Board duties with dedication, grace and seriousness. It may be noted that, pursuant to Shareholder Subscription Agreement ("SSA") with Northern TK Venture Pte. Ltd. ("NTK") dated July 13, 2018, NTK has a right to appoint 2/3rd of the Directors on the Board of the Company and accordingly, to fill the aforesaid vacancies, NTK nominated new candidates on the Board of the Company. The Board appointed, pursuant to the recommendation of the Nomination & Remuneration Committee, Mr. Mehmet Ali Aydinlar and Mr. Tomo Nagahiro, as Additional NonExecutive Directors, of the Company w.e.f. March 28, 2023. Further, pursuant to Regulation 17(1 C) of SEBI LODR, the Company obtained approval of shareholders for confirming

the appointment of Mr. Mehmet Ali Aydinlar and Mr. Tomo Nagahiro as Non-Executive Directors of the Company vide a postal ballot on May 10, 2023.

Post closure of the financial year, the Board of Directors has also appointed Mr. Lim Tsin-Lin as Additional Non-Executive Director on the Board w.e.f May 04, 2023. As per regulation 17(1C) of SEBI LODR, the Company is seeking approval of shareholders for confirming the appointment of Mr. Lim Tsin-Lin on the Board of the Company by way of postal ballot dated May 23, 2023.

During the FY 23, Six (6) 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 Key Managerial Personnel are as under:

Name	Designation
Dr. Ashutosh Raghuvanshi	Managing Director and Chief Executive Officer
Mr. Vivek Kumar Goyal	Chief Financial Officer
Mr. Murlee Manohar Jain*	Company Secretary
Mr. Sumit Goel**	Company Secretary
* Appointed with effect from April 05, 2022. **Resigned with effect from April 04, 2022.

Disclosures regarding the following are mentioned in report on Corporate Governance forming part of this report.

1. Composition of Committee(s) of the Board of Director and other details;

2. Details of establishment of Vigil Mechanism;

3. Details of remuneration paid to all the Directors including Stock options; and

4. Commission received by Independent Director; if any.

BOARD EVALUATION

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board and the respective committees are required to carry out performance evaluation of the Board as a body, the Directors individually, Chairman as well as that of its Committees.

The Nomination of Remuneration Committee ("NRC") and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, it''s committees and individual directors is required to be made.

The following process of evaluation was approved by the Nomination and Remuneration Committee and the Board of Directors:

Sr. No.	Process	Remarks	Criteria for Evaluation (including Independent Directors)
1.	Kick Off Board Evaluation Program	The NRC Chairperson kick starts the process. The relevant questionnaires were circulated to the Board members.
2.	Evaluation forms	The feedback so received from the members on the process was collated by Chief Human Resource Officer (CHRO).	This includes Board focus (Strategic inputs), Board Meeting Management, KPI''s, suggestions to improve Board performance Board Effectiveness Management Engagement, governance, risk management and addressing of follow up requests.
3.	Evaluation by the Board and of Independent Directors	A compilation of the individual self-assessments was placed at the meetings of the Independent Director''s (ID''s) and the Board of Directors (BoD) for them to review collectively.	This includes demonstration of integrity, commitment, attendance at the meetings, contribution and participation, professionalism, contribution while developing Annual Operating Plans, demonstration of roles and responsibilities, review of high risk issues & grievance redressed mechanism, succession planning, working of Board Committees etc.
4.	Final recording and reporting	Based on the findings of the assessment, CHRO circulated a report to the Board members for further discussion and action planning. Based on the above, a final report on Board Evaluation 2022-23 was presented at a meeting of the Board of Directors.	The report includes key highlights, a presentation of an analysis of each response, actionable insights and comments.

MANAGERIAL REMUNERATION

Disclosures pursuant to Rule 5 of the 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 FY 23*

Name of the Director		Designation	Remuneration of Director ('' in Crores)	Median Remuneration of Employees	Ratio
1.	Dr. Ashutosh Raghuvanshi*	Managing Directors & CEO	8.15		344:33
2.	Mr. Ravi Rajagopal#	Chairman (Independent Director)	1.03		43:1
3.	Dr. Kelvin Loh Chi Keon@	Non- Executive Director	0.05		2:1
4.	Mr. Dilip Kadambi	Non- Executive Director	0.09		3:1
5.	Dr. Farid Bin Mohamed Sani&	Non- Executive Director	0.00		-
6.	Mr. Heng Joo Joe Sim	Non- Executive Director	0.06		2:1
7.	Mr. Indrajit Banerjee#	Independent Director	0.92	0.0237	38:1
8.	Mr. Joerg Ayrle	Non- Executive Director	0.12		5:1
9.	Ms. Shailaja Chandra#	Independent Director	0.91		38:1
10.	Ms. Suvalaxmi Chakraborty#	Independent Director	0.83		35:1
11.	Mr. Takeshi Saito&	Non- Executive Director	0.03		0.42:1
12.	Mr. Mehmet Ali Aydinlarâ	Non-Executive Director	0.01		0.42:1
13.	Mr. Tomo Nagahiroâ	Non-Executive Director	0.01		0.42:1

* Annual Salary paid including the perquisites (if any) which is considered for taxation, however, does not include the reimbursements paid against the expense bills submitted.

# The Non-Executive/Independent Directors are paid sitting fees & commission on the basis of their attendance at the Board/ Committee Meetings. Any variation highlighted above in remuneration of these Directors is on account of number of meetings held or attended during the year.

@ Dr. Kelvin Loh Chi Keon resigned w.e.f. February 22, 2023

& Dr. Farid Bin Mohamed Sani and Mr. Takeshi Saito have resigned as Directors of the Company w.e.f. March 28, 2023.

$ Mr. Mehmet Ali Aydinlar and Mr. Tomo Nagahiro were appointed as Non-Executive Directors of the Company w.e.f. March 28, 2023.

(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:

Employee Name	Designation	% of increment
Dr. Ashutosh Raghuvanshi	Managing Director and Chief Executive Officer	0%
Mr. Vivek Kumar Goyal	Chief Financial Officer	6%
Mr. Sumit Goel*	Company Secretary	0%
Mr. Murlee Manohar Jain**	Company Secretary	0%
Resigned w.e.f April 04, 2022. *Appointed w.e.f April 05, 2022.

Increases in annual CTC of the employees between the current and last financial year are considered.

(d) The number of permanent employees on the rolls of the Company is 2975 as on March 31,2023.

(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 ¹

Particulars	For the FY 23
(A) Average percentile increases already made in the salaries of employees other than the managerial personnel	8.42%
(B) Percentile increase in the managerial remuneration	6%
Comparison of (A) and (B)	2.42%
Justification	8.42% is the Company average salary increment excluding KMPs. The increment rates vary based on the Job grades and performance ratings of the employees.
Any exceptional circumstances for increase in the managerial remuneration	-
Salary increases % (percentage) considered in comparison between salary as on 31/3/2022 and 31/3/2023 of the active employees as on 31/3/2023 * KMP Salary revision- only one member had a salary increase hence the increment rate applied with the same rate.

(f) During the financialyear 2022-23,''2,85,9 5,850.00variable pay was paid to Dr. Ashutosh Raghuvanshi, MD and CEO, '' 93,20,000.00 to Mr. Vivek Kumar Goyal, Chief Financial Officer, and '' 11,18,218.00 to Mr. Sumit Goel, erstwhile Company Secretary, and '' 5,00,000.00 to Mr. Murlee

Manohar Jain, Company Secretary for year 2022-23.

******

the industry in which your Company operates, business model of your Company, etc. The same is governed by a template viz Board of Directors Governance Standard and it is available on the website of the Company at https://www.fortishealthcare.com/drupal-data/investors/ Board%2Bof%2BDirectors%2BGovernance%2BStandards.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 your Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, 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.

RELATED PARTY TRANSACTIONS

Disclosures as required under Section 1 34(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in "Annexure - V" in Form AOC- 2 as specified under the Companies Act, 2013.

The Related Party Transactions are placed before the Audit Committee for approval as required under SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable 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 Committee for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at https://www.fortishealthcare.com/drupal-data/investors/ Policy%2Bon%2BRelated%2BParty%2BTransactions.pdf

None of the current Directors has any pecuniary relationship or transaction vis-a-vis your Company, except to the extent of sitting fees and remuneration/commission approved by the Board of Directors and/or shareholders of your Company and as disclosed in this Annual Report.

RISK MANAGEMENT POLICY

Your Company has designed a risk management policy and framework for risk identification, assessment, mitigation plan development and monitoring of action to mitigate the risks. The key objective of the Enterprise Risk Management Policy ("ERM Policy") policy is to provide a formalised framework to enable judicious allocation of resources on the critical areas which can adversely impact your Company''s ability to achieve its objectives. The policy is applicable to the Company and its subsidiaries. This framework enables the management to develop and sustain a risk-conscious culture, wherein, there is a high degree of organisation-wide awareness and understanding of external and internal risks associated with the business. The policy defines an architecture and oversight structure to assist effective implementation. By clearly defining terms and outlining roles and responsibilities, ERM promotes risk ownership, accountability, self-assessment and continuous improvement to minimise adverse impact on achievement of business objectives and enhance your Company''s competitive advantage. Your company has also defined quantitative key risk indicators (KRIs) to monitor the effectiveness of actions take to mitigate the identified risks. The details thereof are covered under the Management and Discussion Analysis Report which forms part of the Annual Report.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT

Your Company has adopted a Policy for Prevention, Prohibition and Redressal of Sexual Harassment. As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder,

your Company has constituted Internal Complaints Committees (ICC). During the year, your Company has received 5 complaints on sexual harassment and all 5 complaints have been resolved with appropriate action taken and no complaint was pending as on March 31, 2023. The same may also be read in terms of Companies (Accounts) Rules, 2014.

DISCLOSURE REQUIREMENTS

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report with Auditors'' certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

CODE OF CONDUCT

Declaration by Dr. Ashutosh Raghuvanshi, Managing Director and Chief Executive Officer confirming compliance with the ''Fortis Code of Conduct'' is enclosed with Corporate Governance Report.

CERTIFICATE BY STATUTORY AUDITORS FOR DOWNSTREAM INVESTMENT

A certificate from the Statutory Auditors of your Company stating that your Company has duly complied with the requirements of downstream investment made by your Company to second level entities in accordance with Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 would be available at the Annual General Meeting for inspection by members.

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, the applicable accounting standards have been followed along with proper explanations relating to material departures therefrom, if any;

(b) The selection and application of accounting policies were assessed for their consistent application and judgements and estimates were made that are reasonable and prudent so as to give a true and fair view of the state of the affairs of your Company at the end of the financial year and of the profit of your Company for the Financial Year ended March 31, 2023;

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(d) the Statements have been prepared on a going concern basis;

(e) Proper internal financial controls have been laid down and that such internal financial controls are adequate and are operating effectively; and

(f) There are proper systems in place to ensure compliance with the provisions of all applicable laws and that such systems are 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 in the Company.

Your Directors are glad to place on record that your Company has posted a strong financial performance during the year and greatly appreciate the commitment and dedication of all the employees, that has contributed to the growth and success of the Company. Your Directors also thank all the strategic partners, business associates, Banks, financial institutions for their assistance, co-operation and encouragement to the Company during the year.

Last but not the least your Directors thank the Shareholders of the Company for their continued faith in the Company.

By Order of the Board of Directors For Fortis Healthcare Limited

Sd/- Sd/-

Ashutosh Raghuvanshi Ravi Rajagopal

Managing Director & CEO Chairman (Independent Director)

DIN: 02775637 DIN: 00067073

Date: May 23, 2023 Date: May 23, 2023

Place: Gurugram Place: Gurugram

REMUNERATION POLICY

Your Company has from time to time familiarised the Board of Directors with the Company''s operations, their roles, rights, responsibilities in your Company, nature of

Mar 31, 2021

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

Your Directors have pleasure in presenting here the Twenty Fifth Annual Report of the Company along with the Audited Standalone and Consolidated Financial Statements and the Auditors'' Report thereon for the Year ended March 31, 2021.

FINANCIAL RESULTS

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

('' in Lakhs)
Particulars	Consolidated
Particulars	Year ended March 31, 2021	Year ended March 31, 2020
Continuing Operations
1 Operating Income	403,012	463,232
2 Other Income	4,656	5,264
3 Total Income (1 2)	407,668	468,496
4 Total Expenditure (Excluding finance cost, depreciation & tax expenses)	362,568	402,280
5 Operating Profit (EBITDA) (3-4)	45,100	66,216
6 Finance Charges, Depreciation & Amortisation	45,648	49,679
7 Profit/ (loss) before share of profit of equity accounted investees, exceptional items and tax (5-6)	(548)	16,537
8 Share in profits of associate companies	4,756	1,216
9 Profit/ (loss) before exceptional items and tax (7 8)	4,208	17,753
10 Exceptional items	121	6,183
11 Profit/ (loss) before tax (9 10)	4,329	23,936
12 Tax Expenses	9,946	14,787
13 Profit/ (Loss) for the year from continuing operations (11-12)	(5,617)	9,149
14 Discontinuing Operations
Profit/ (Loss) before tax from discontinuing operations	-	-
Tax expense of discontinuing operations	-	-
Profit/ (Loss) after tax and before minority interest from discontinuing operations	-	-
Share in profits/ (losses) of associate companies	-	-
Profit for the year from discontinuing operations (B)	-	-
15 Profit/ (loss) for the year (13 14)	(5,617)	9,149
Profit for the year attributable to:
Owners of the Company	(10,976)	5,794
Non-controlling interests	5,359	3,355
Profit for the year before other comprehensive income
16 Other comprehensive income	1,034	11
17 Total comprehensive income (15 16)	(4,583)	9,160
Total comprehensive income for the year attributable to:
Owners of the Company	(9,974)	5,947
Non-controlling interests	5,391	3,213

('' in Lakhs)
Particulars		Standalone
		Year ended March 31, 2021	Year ended March 31, 2020
Continuing Operations
1.	Operating Income	63,287	70,185
2.	Other Income	19,198	93,834
3.	Total Income (1 2)	82,485	164,019
4.	Total Expenditure (Excluding finance cost, depreciation & tax expenses)	60,495	63,390
5.	Operating Profit (EBITDA) (3-4)	21,990	100,629
6.	Finance Charges, Depreciation & Amortisation	25,223	25,698
7.	Profit before exceptional items and tax (5-6)	(3,233)	74,931
8.	Exceptional items	5,646	(12,863)
9.	Profit before tax (7 8)	2,413	62,068
1 0.	Tax Expenses	1,993	10,735
11.	Net Profit for the year (9-10)	420	51,333
12.	Share in profits of associate companies	-	-
13.	Profit for the year from continuing operations (11 12)	420	51,333
1 4.	Discontinuing Operations
Profit/ (Loss) before tax from discontinuing operations		-	-
Tax expense of discontinuing operations		-	-
Profit/ (Loss) after tax and before minority interest from discontinuing operations		-	-
Share in profits/ (losses) of associate companies		-	-
Profit for the year from discontinuing operations		-	-
15.	Profit for the year (13 14)	420	51,333
16.	Other comprehensive income	86	(12)
17.	Total comprehensive income (15 16)	506	51,321

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

Fiscal 2020-21 was a challenging year for the healthcare sector due to COVID-19 pandemic. The pandemic created a huge strain on the sector''s workforce, infrastructure, and supply chain. Fortis also witnessed these challenges and had to re-prioritise its key strategic areas earmarked for the year to focus on the management of the COVID crisis. The Company''s performance in both of its hospital and diagnostics businesses was significantly impacted during the first two quarters of the year due to country-wide lockdown in April and May 2020. However, the two businesses witnessed recovery during the latter half of the year. The Company was also successfully able to navigate the challenges by ensuring sustainability and continuity of business operations and maintaining a comfortable liquidity position through the year.

For the FY 2020-2021, the Company reported a consolidated revenue from operations of '' 4,030 Crores compared to '' 4,632 Crores reported for FY 2019-20. Revenue from Hospital business stood at '' 3,124 Crores compared to '' 3,753 Crores reported during the corresponding year. SRL Limited, the diagnostic business of the company, reported gross revenues of '' 1,035 Crores compared to '' 1,016 Crores in the previous financial year. The diagnostics business witnessed a healthy trend during H2 FY 2020-21 as the non-COVID business saw a significant recovery and also due to increase in demand for COVID and COVID related tests. Considering elimination of inter-company revenue (within the group), net revenue of

SRL Ltd was at '' 906 Crores compared to '' 879 Crores in FY

2019- 20.

The consolidated EBITDA of the Company stood at '' 451 Crores compared to '' 662 Crores for the previous corresponding year. EBITDA margin of the Company stood at 11.2% in FY 2020-21 versus 14.3% reported in FY 2019-20.

Hospital business EBITDA for FY 2020-21 was at '' 281 Crores compared to '' 476 Crores reported for FY 2019-20. EBITDA margin of the hospital business stood at 9.0% in FY 2020-21 versus 12.7% in FY 2019-20.

The diagnostic business of the Company reported EBITDA of '' 200 Crores compared to '' 197 Crores reported in the previous corresponding year. EBITDA margin of the diagnostic business stood at 19.3% (basis gross revenue) for the year FY

2020- 21 compared to 19.4% in FY 2019-20.

The consolidated EBITDA for the Company at '' 451 Crores in FY 2020-21 also accounts for the operational and finance / forex costs related to certain non-operational international entities.

At the consolidated level, the Company reported Profit Before Tax before and exceptional items of '' 42 Crores versus '' 178 Crores in the previous FY 2019-20. Profit after tax for FY 202021 stood at a loss of '' 56 Crores compared to a profit of '' 91 Crores in the previous financial year.

The Company has a comfortable liquidity position with net debt of '' 849 Crores as on March 31, 2021 versus '' 1,004 Crores as of March 31, 2020 (net debt to equity of 0.13x vs 0.14x, respectively). Gross debt of the Company stood at '' 1,271 Crores as on March 31, 2021 versus '' 1,354 Crores as of March 31, 2020. The Company''s Net Debt / EBITDA (annualised) stood at healthy 1.04x in Q4 FY 2020-21, down from 1.52x in FY 2019-20.

All decisions at your Company are taken with the patient at the center. In line with its objective of becoming the most trusted healthcare provider in India, your Company makes efforts to consistently improve the quality of all its services. Your Company has put together a winning combination of ultra-modern healthcare facilities equipped with best-in-class diagnostic and therapeutic technology and a competent team comprising of some of the finest clinical and paramedical talent available in the country. All facilities owned and operated by your Company follow globally accepted medical protocols and procedures and are focused on delivering the best possible clinical outcomes. Your Company''s healthcare facilities provide high standards of secondary, tertiary and quaternary healthcare services in the specialties of Cardiac Sciences, Orthopaedics, Neurosciences, Oncology Sciences, Renal Sciences, Gastro Sciences and Mother and Child care.

During the course of FY 2020-21, your Company launched several new medical programmes and clinical services at its various facilities across the country. A Home Isolation Support Programme for COVID -19 positive patients was launched by Forits Memorial Research Institute (FMRI) Gurugram, Fortis Anandapur, Kolkata, launched the city''s only Dual Source Dual Energy Somatom Drive CT scanner, which is 24 times faster than any other CT scan machine. Fortis Hospital, Mulund, introduced Central Mumbai''s first Tesla Advanced Biomatrix MRI to ramp up the Radiology offerings. Fortis Hospital, BG Road, Bengaluru installed the first state of the art Biplane Cath lab in the state of Karnataka which will provide advanced care for neurovascular disorders.

Your Company plans to launch a number of new projects aimed to fulfil the growing demand. The Company aims to further consolidate its position in Cardiac Sciences and Orthopaedics while focusing on high growth specialties such as Oncology, Neuro Sciences, Gastro Sciences and Renal Sciences. Furthermore, the Company plans to commission over 1,300 new beds over the next 3 to 4 years in existing facilities to leverage economies of scale - majority of bed additions are planned in Noida, BG Road, Anandapur, Mulund, Shalimar Bagh, FMRI, Mohali and Arcot Road.

The healthcare verticals of the Company primarily comprise day care specialty, diagnostics and tertiary and quaternary care. As of March 31, 2021, the Company had a network of 27 healthcare facilities in India with approximately 4,100 operational beds including beds under the O&M model.

In addition, its Indian diagnostics business has a presence in over 600 cities and towns, with an established strength of over 425 laboratories, 20 radiology / imaging centers; 48 Accreditations (NABL/NABH/CAP) and a footprint spanning 2250 customer touch points.

There has been no change in the nature of business of the Company during the year under review. The Company endeavors to provide high quality healthcare services with an emphasis on successful clinical outcomes and a superlative patient experience.

SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW

The Company undertook a comprehensive strategic review and prioritised key areas to drive revenues and operational performance. These include aspects related to evaluating the current portfolio of the Company''s facilities and planned bed expansion, initiating cost optimisation measures across the network, investing in technology and medical equipment and

further strengthening its clinical excellence program. Further details of this are mentioned in the Business Strategy section of the Management Discussion and Analysis Report (''MDA''). Further, the Board has from time to time during the year under review updated its stakeholders about the key developments that took place by disseminating necessary information to the stock exchanges and through various means of communications to the investors. Some of key activities are mentioned below:

â¢ Changed Board and Key Managerial Personnel-

During the year under review, the Board of Directors and Key Managerial Personnel underwent changes, details whereof are separately disclosed in this report.

â¢ Open Offer- The Board had at its meeting held on July 13, 2018, accepted the binding bid made by IHH Healthcare Berhad (IHH). Pursuant thereto your Company entered into subscription Agreement dated July 13, 2018 for issuance of 23,52,94,1 17 Shares at a price of '' 170 per share for an aggregate consideration upto '' 4,000 Crores (Rupees Four Thousand Crores only) to Northern TK Venture Pte Limited ("NTK"), an indirect wholly owned subsidiary of IHH. Consequently, after obtaining regulatory and statutory approvals such as from Securities and Exchange Board of India, Competition Commission of India and in terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, IHH made the Mandatory Open Offer for acquisition of upto 197,025,660 Equity Shares representing additional 26% of the expanded voting share capital of your Company ("Fortis Open Offer") and another Mandatory Open Offer for acquisition of up to 4,894,308 fully paid up equity shares of face value of '' 10 each, representing 26% of the fully diluted voting equity share capital of Fortis Malar Hospitals Limited ("Fortis Malar Open Offer").

After the Preferential Allotment on November 13, 2018, public announcement was made on December 7, 2018 regarding Fortis Open Offer and Fortis Malar Open Offer, thereafter the Hon''ble Supreme Court of India had on December 14, 2018 passed an order ("Order") directing "status quo with regard to sale of the controlling stake in Fortis Healthcare to Malaysian IHH Healthcare Berhad be maintained". In light of the Order, Fortis Open Offer and Fortis Malar Open Offer were put on hold until further order(s) / clarification(s) / direction(s) issued by the Hon''ble Supreme Court of India. Application was filed by your Company for modification of the Order and for proceeding with Fortis Open Offer and Fortis

Malar Open Offer. Vide its judgment dated November 15, 2019 ("Judgment"), the Hon''ble Supreme Court issued suo-moto contempt notice to, among others, your Company, and directed its Registry to register a fresh contempt petition in regard to alleged violation of the Order ("Contempt Petition"). In this respect, the Hon''ble Supreme Court sought an enquiry into:

(i) Whether the subscription by NTK for the Shares of your Company was undertaken after the Order, and accordingly if such subscription was in violation of the Order; and

(ii) The consummation of acquisition of healthcare assets from RHT Health Trust by your Company.

The Company has filed a reply to the show cause notice issued in the suo-moto contempt, praying inter alia, that the suo-moto contempt proceedings be dropped and Order be modified / vacated such that Fortis Open Offer and Fortis Malar Open Offer may proceed. Since the issuance of the Judgement, several other parties have filed applications before the Hon''ble Supreme Court, for seeking various remedies including (i) A minority shareholder of your Company ("Minority Shareholder") has sought resumption of the Fortis Open Offer; (ii) Daiichi Sankyo Co. Ltd has sought permission to be impleaded in the Suo- Moto Contempt; (iii) Securities and Exchange Board of India has sought resumption of the Fortis Open Offer citing larger public interest at stake; (iv) NTK has filed applications to intervene in the Supreme Court Proceedings, to be heard and for vacation of the Order that continues to stay the Fortis Open Offer and Fortis Malar Open Offer. On August 14, 2020 an application has been submitted before the Hon''ble Supreme Court of India seeking permission for change of name, brand and logo of your Company and its subsidiaries. The matter is sub-judice.

â¢ Other Matters: The Company''s Board of Directors initiated additional procedures/ enquiries of certain entities in the Group that were impacted in respect of the matters investigated by an appointed external legal firm. Pending completion of the additional procedures / enquiries ("Additional Procedures / Enquiries") and since the earlier investigation was subject to the limitations on the information available to the other external legal firm (being subject to their qualifications and disclaimers as described in their investigation report, as disclosed in the audited financial statements for the years ended March 31, 2018, March 31, 2019 and March 31, 2020) certain audit qualifications were made in respect of FHL''s financial statements for those financial years, as the statutory auditors were unable to comment on the nature of those matters, the provisions established thereof, or any further potential impact on the financial statements. In order to resolve the same, the Board mandated the management to undertake review of certain areas in relation to historical transactions for the period April 1,2014 to September 30, 2018 involving additional verification by engaging independent experts with specialised forensic skills to assist with the Additional Procedures/Enquiries and conduct data gathering exercise in connection therewith. The independent experts submitted their report which was discussed and considered by the Board in its meeting held on September 16, 2020.

The Board noted that the Additional Procedures / Enquiries, prima facie, revealed further instances of payments made to the erstwhile promoters or to their directly or indirectly related parties including erstwhile promoter group entities which were potentially improper. All of the amounts identified in the Additional Procedures / Enquiries had been previously provided for or expensed in the financial statements of FHL or its subsidiaries with full disclosures. There are no further improper transactions identified by the Additional Procedures / Enquiries or / by the management which had not been expensed or provided. In connection with the potentially improper transactions, your Company has undertaken a detailed review of each case to assess the Company''s legal rights and has initiated appropriate legal action. Complaint has been filed with the Economic Offences Wing ("EOW") in November 2020 against erstwhile promoters / erstwhile promoters group company in respect of certain transactions which is being investigated.

DIVIDEND AND TRANSFER TO RESERVES

The Board of Directors of the Company have not recommended any dividend for the FY 2020-21. Accordingly, there has been no transfer to general reserves and the Company would like to retain its profit this year to strengthen its business.

Refer the Company''s policy on Dividend Distribution available on the website of the Company at https:/www. fortishealthcare.com/investors - Corporate Governance / Policies / Codes / Policy on Dividend Distribution.

MATERIAL CHANGES

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the FY 2020-21 and the date of this report.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Statutory Auditors in their report to the Board of Directors on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("The Act") have given the opinion that the Company and such companies incorporated in India which are its subsidiary companies and joint venture companies (jointly controlled company), have, in all material respects, adequate internal financial controls with reference to consolidated financial statements and the financial statements of the Company and such internal financial controls were operating effectively as at March 31, 2021, based on the internal financial controls with reference to consolidated financial statements and the financial statements of the Company, criteria established considering the essential components of such internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. The Auditor''s opinion on adequacy and operating effectiveness of internal control is self-explanatory.

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

During the year under review there has been no change in the subsidiaries / joint venture and associate Companies.

Further note that your Board of Directors have adopted a policy for determining "material subsidiary" pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said policy is available at https:// www.fortishealthcare.com/investors - Corporate Governance / Policies / Codes / Policy for determination of Material Subsidiary.

In terms of the said policy, as on April 1,2021, Fortis Hospitals Limited (FHsL), International Hospital Limited (IHL), Fortis Hospotel Limited (FHTL) and SRL Limited are considered as Material Subsidiary(ies). Necessary compliances w.r.t. material subsidiaries have been duly carried out.

Further, during the year under review a material subsidiary of the Company i.e. SRL Limited ("SRL") executed SRL PE amendment agreement dated March 30, 2021 to amend the terms of the

existing Shareholder Agreement dated June 12, 2012 between SRL Limited and International Finance Corporation, Nylim Jacob Ballas India Fund III LLC, Resurgence PE Investments Limited (collectively referred as "PE Investors") and Fortis Healthcare Limited for incorporating new exit rights of the PE Investors. Simultaneously, to align with the amendment, the Exit Agreement dated June 12, 2012 executed amongst Fortis Healthcare Limited, SRL and the PE Investors was terminated. Post closure of the year under review, a material subsidiary of the Company i.e. SRL, acquired balance 50% stake in joint venture DDRC SRL Diagnostics Private Limited (''DDRC SRL'') in terms of Share Purchase Agreement dated March 24, 2021 and thereby DDRC SRL became a step-down subsidiary of the Company effective April 5, 2021.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The consolidated financial statements of your 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. Your 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 be available for inspection. Performance and financial position of each of Subsidiaries, Associates and Joint Ventures included in the Consolidated Financial Statements of your Company is enclosed herewith as "Annexure - I" in the prescribed format (Form AOC-1).

The contribution of the subsidiary/associates/joint venture companies to the overall performance of your Company is outlined in Note No. 27 of the Consolidated Financial Statements for the year ended March 31, 2021.

LOANS / ADVANCES / INVESTMENTS / GUARANTEES

Particulars of Loans / Advances / Investments / guarantees given and outstanding during the FY 2020-21 forms part of the Notes to the Financial Statements.

PUBLIC DEPOSITS

During the financial year under review, the Company has not invited or accepted any deposits from the public, pursuant to the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and

therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as of the date of Balance Sheet.

UTILISATION OF FUNDS

The details of utilisation of funds raised through preferential allotment during the year are mentioned in Notes to Financial Statements.

AUDITORS

â¢ Statutory Auditors

M/s B SR & Co. LLP, (Registration No. 101248W/W-100022), Chartered Accountants, were appointed as Statutory Auditors of your Company for a period of five years i.e. up to the conclusion of the Annual General Meeting to be held in the year 2024.

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 and are categorised as "Emphasis of Matter", hence no comments in this regard have been offered by your Board of Directors:

a) Note 28 and Note 29 of the consolidated financial statements which deal with various matters including the ongoing investigation by Serious Fraud Investigation Office ("SFIO") and ongoing adjudication proceedings by Securities and Exchange Board of India ("SEBI") on Fortis Healthcare Limited (hereinafter referred to as "the Company" or the "Holding Company") and its subsidiaries (Holding Company and its subsidiaries together referred to as "the Group") regarding alleged improper transactions and non-compliances with laws and regulations including Companies Act, 2013 (including matters relating to remuneration paid to managerial personnel) and SEBI laws and regulations. These transactions and non-compliances relate to or originated prior to take over of control by present board of directors in the year ended 31 March 2018. As mentioned in the note, the Group has been submitting information required by SFIO and has responded to the SEBI notice and is also cooperating in the regulatory investigations/ proceedings.

As explained in the said note, the Group had recorded significant adjustments/ provisions in its books of account during the year ended March 31, 701 R Thp Cnmnanv hpi<; l^i inrhprl IphpiI nrnrpprlinn<;

and has also filed a complaint with the Economic Offences Wing (''EOW'') against erstwhile promoters and their related entities based on the findings of the investigation conducted by the Group. Further, based on management''s detailed analysis and consultation with external legal counsel, a further provision has been made and recognised in the current year for any contingency that may arise from the aforesaid issues. As per the management, any further impact, to the extent it can be reliably estimated as at present, is not expected to be material.

b) Note 30 of the consolidated financial statements relating to the order dated 15 November 2019 of the Hon''ble Supreme Court, where it is stated that the Hon''ble Supreme Court has issued suo-moto contempt notice to, among others, the Company and directed its Registry to register a fresh contempt petition in regard to alleged violation of its order dated December 14, 2018. In this respect, the Hon''ble Supreme Court has sought an enquiry, into (i) whether the subscription by Northern TK Venture Pte Ltd., Singapore, a wholly owned subsidiary of IHH Healthcare Berhad, Malaysia, to the shares of the Company was undertaken after the status quo order was issued by the Hon''ble Court on December 14, 2018 and accordingly, if such subscription was in violation of this status quo order; and (ii) the consummation of the acquisition of healthcare assets from RHT Health Trust by the Company. As also explained in the said note, the management believes that it has a strong case on merits and as per the current position of the case, the liability, if any, arising out of this contingency cannot be determined at this stage. Accordingly, at present, no adjustment is required in the consolidated financial statements.

c) As explained in Note 14(I) of the consolidated financial statements, a Civil Suit claiming '' 25,344 lacs was filed by a third party against various entities including the Company and certain entities within the Group relating to "Fortis, SRL and La-Femme" brands. Based on legal advice of external legal counsel, the Management believes that the claims are without legal basis and not tenable. Further, as mentioned in Note 30 of the consolidated financial statements, the tenure of brand license agreement entered by the Company has expired

and the Company has filed an application before the Hon''ble Supreme Court of India seeking permission for change of company name, brand and logo. The matter is currently sub-judice.

d) Note 14(II)(i) and 14(II)(iii) of the consolidated financial statements, relating to the outcome of civil suit with regard to termination of certain land leases allotted by Delhi Development Authority (DDA) and the matter related to non-compliance with the order of the Hon''ble High Court of Delhi in relation to provision of free treatment/ beds to poor by EHIRCL. Based on the advice given by external legal counsel, no provision / adjustment has been considered necessary by the management with respect to the above matters in these consolidated financial statements, considering the uncertainty relating to the outcome of these matters.

e) Note 14(111) of the consolidated financial statements, which describes in detail the matter relating to the termination of hospital lease agreement by Navi Mumbai Municipal Corporation vide order dated January 18, 2017 of Hiranandani Healthcare Private Limited ("HHPL"), one of the subsidiaries in the Group. HHPL has filed a Writ Petition before the Hon''ble Supreme Court of India challenging the Termination Order, which is pending hearing and disposal. Based on the opinion obtained from the legal counsel, the management is confident that HHPL will be able to successfully defend the termination order. However, due to uncertainties involved, the ultimate outcome will be ascertained on disposal of the said petition.

f) Note 37 of the consolidated financial statements, which describes the economic and social consequences the Group is facing as a result of COVID-19 which is impacting supply chains / demand / personnel available for work and or being able to access of offices/ hospitals.

The statutory auditors have, in their report to Board of Directors on the consolidated financial statements of the Company given a qualified opinion as follows: â¢ Qualified opinion

We have audited the consolidated financial statements of Fortis Healthcare Limited (hereinafter referred to as "the Company" or the "Holding Company") and its subsidiaries (Holding Company and its subsidiaries together referred to as "the Group"), its associates and its joint ventures, which comprise the consolidated balance sheet as at March 31, 2021, and the consolidated statement of profit and loss (including other comprehensive income), consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated financial statements").

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of other auditors on separate financial statements of such subsidiary and joint ventures as were audited by the other auditors, and except for the possible effects, if any, of the matter described in the "Basis for Qualified Opinion" paragraph of our report, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and joint ventures as at March 31, 2021, of its consolidated loss, other comprehensive income, consolidated changes in equity and consolidated cash flows for the year then ended.

â¢ Basis for Qualified Opinion

We draw attention to Note 40 of the consolidated financial statements, which explains that due to a significant amount of dividend received during the previous year ended March 31, 2020 from a wholly owned overseas subsidiary, the ''income from financial assets'' of the Company was more than 50 percent of the gross income for the year then ended. Further, in view of the investments in subsidiaries and financing provided to them, the Company''s financial assets as at that date are also more than 50 percent of its total assets. Consequently, the Company technically meets the "principal business test" criteria for classification as a Non-Banking Financial Company (NBFC) as per press release by Reserve Bank of India (RBI) vide No. 1998-99/1269 dated April 08, 1999 as at April 01, 2020 and is required to obtain a certificate of registration as a NBFC. As per the Company, such dividend is non-recurring in nature and does not represent income from ordinary activities of the Company and the Company does not intend to carry on the business

as a NBFC. Accordingly, the Company, vide its letter dated November 08, 2019, had made a representation to the RBI that keeping in view the objective behind the principal business test criteria, its registration as a NBFC should not be required. Subsequent to the completion of audit of the standalone financial statements of the Company for the year ended March 31, 2020, we, as statutory auditors, have also intimated the RBI regarding the Company technically meeting the Principal Business Test and regarding the above referred representation by the Company to the RBI which inter alia stated that the Company is primarily engaged in the healthcare business, and that the Company has represented to the RBI that it does not presently or in future intend to undertake the business of non-banking financial institution. Further, in September 2020, the Company has written another letter to RBI with a request to confirm that no such registration as a NBFC is required. RBI advised the Company to submit to it the financial results for the quarters ended June 30, 2020, September 30, 2020 and December 31, 2020 which were duly submitted by the Company.

Pending resolution of the matter with RBI, we are unable to comment on the impact thereof, if any, on the consolidated financial statements for the year ended March 31, 2021.

â¢ Director''s response to comments of the statutory auditors in the Audit Report:

With regard to the comments of the statutory auditors in paragraph basis for qualified opinion of Audit Report, pertaining to NBFC registration, it has been explained in Note 40 of the consolidated financial statements, as per the RBI''s ''Master Direction- Non-Banking Financial Companies Auditor''s Report (Reserve Bank) Directions, 2016'', on the issue of NBFC registration, the statutory auditor is to examine whether the company has obtained a Certificate of Registration from the RBI when the "company is engaged in the business of nonbanking financial institution as defined in section 45-I(a) of the RBI Act and meeting the Principal Business Criteria (Financial Asset/ income pattern)". The Company has, in Note 40 of the consolidated financial statements, clarified that while it technically would meet the Principal Business Test due to this significant dividend on account of the one-off transaction, it does not, and does not intend to, carry on the business as ''non-banking financial institution''. The Board has also noted and confirmed by way of a board resolution that the significant dividend received

'' in Lakhs
Sl. No.	Particulars	Audited Figures (as reported before adjusting for qualification)	Adjusted Figures (audited figures after adjusting for qualification) $
1	Turnover / Total income	407,668	Not Determinable
2	Total Expenditure	408,216	---Do---
3	Share of profit of associates and joint ventures (net)	4,756	---Do---
4	Exceptional gain	121	---Do---
5	Tax expense	9,946	---Do---
6	Net Profit/(Loss)	(5,617)	---Do---
7	Earnings Per Share	(1.45)	---Do---
8	Total Assets	1,115,468	---Do---
9	Total Liabilities	443,687	---Do---
10	Net Worth*	671,781	---Do---

during the previous year ended March 31,2020 does not represent income from ordinary activities of the Company and that the Company does not intend to carry on the business as an NBFC. In this backdrop, the requirement for registration as a ''non-banking financial institution'' should not arise.

The Company also has made a representation to the RBI in November 2019, i.e. more than a year ago, that while the Company technically would meet the Principal Business Test due to this significant dividend on account of the one-off transaction, it does not, and does not intend to, carry on the business as an NBFC and hence keeping in view the objective behind the test, its registration as a NBFC should not be required. Subsequent to the completion of audit of the financial statements of the Company for the year ended March 31, 2020, the statutory auditor of the Company has also intimated the RBI regarding the Company technically meeting the Principal Business Test and regarding the above referred representation by the company to the RBI which inter alia stated that the Company is primarily engaged in the healthcare business, and that the Company has represented to the RBI that it does not presently or in future intend to undertake the business of non-banking financial institution. Further, during the current year the Company wrote a letter to RBI with a request to confirm that no such registration as a NBFC is required. It also requested for a meeting to give an opportunity to the Company to explain its position on the matter. During the current quarter ended March 31,2021 RBI advised the Company to submit to it the financial results for the quarter ended June 30, 2020, September 30, 2020 and December 31, 2020 which was duly submitted. Further, as evident from these financial statements, the criteria for principal business test is not met as at March 31, 2021. For more details, please refer to note 40.

The statement of impact of Audit Qualification as stipulated in regulation 33(3)(d) is placed below: Qualification in the Auditor''s Report

The Board of Fortis Healthcare Limited, has dealt with the matters stated in the qualification in statutory auditor''s report on the Consolidated Financial Statement of Fortis Healthcare Limited ("the Parent" or "the Company") and its subsidiaries (the Parent/Company and its subsidiaries together referred to as "the Group") and its share of profit /(Loss) of its joint ventures and associates for the year ended March 31, 2021 ("the Consolidated Annual Financial Statement") included in the Statement of Consolidated

Financial Statement ("the Consolidated Statement") to the extent information was available with them.

"$" for Qualification of the Auditor''s Report.

* Including non-controlling interest of '' 59,800 Lakhs.

â¢ Qualification of the Auditor''s Report

1. Details of Audit Qualification:

As per audit report para on "Basis for Qualified Opinion"

2. Type of Audit Qualification:

Qualified Opinion

3. Frequency of qualification:

First time

4. For Audit Qualification(s) where the impact is quantified by the auditor, Management''s Views:

Not Applicable

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Management''s estimation on the impact of audit qualification:

Not quantifiable.

(ii) If management is unable to estimate the impact, reasons for the same:

Please refer to Director''s response to comments of the statutory auditors in the Audit Report as stated in above Directors'' Report.

(iii) Auditors'' Comments on (i) or (ii) above:

The Company technically meets the "principal business test" criteria for classification as a Non-Banking Financial Company (NBFC). As per the Company, such significant dividend income recorded in the year ended March 31, 2020 is non-recurring in nature and does not represent income from ordinary activities of the Company and the Company does not intend to carry on the business as a NBFC. The Company has written letters to RBI with a request to confirm that no such registration as a NBFC is required. Pending resolution of the matter with RBI, we are unable to comment on the impact thereof, if any, on the financial statements for the year ended March 31,2021.

â¢ Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) 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 Committee, appointed M/s. Jitender, Navneet & Co., Cost Accountants to audit the cost accounts of the Company for the FY 2020-21 at a remuneration upto '' 3.5 Lakhs (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 in the Notice convening the ensuing Annual General Meeting. Further, in terms of the Companies (Accounts) Rules, 2014, it is confirmed that maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is applicable on the Company and accordingly such accounts and records are properly made and maintained.

â¢ 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 & Associates, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Company has complied with the provisions of Secretarial Standards,

to the extent feasible. The Secretarial Audit Report is enclosed herewith as "Annexure - II".

â¢ 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 authorised him to engage independent firm(s), if needed, for conducting the internal audit for the FY 2020-2021 to enable him to extend adequate coverage of internal audit checks. Accordingly, PWC was engaged to carry out certain aspects of Internal Audit for the Company / its subsidiaries to augment the in-house team of internal audit team led by the Chief Internal Auditor.

Besides, the matters mentioned in basis for qualified opinion in the Auditors Report, if any, as per the requirement of Companies Auditor Report Order (CARO), Rules, 2016, there was no fraud reported by the above stated auditors during the year under review.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During FY 2020-21, the Company received an order dated November 12, 2020 passed by the Securities and Exchange Board of India (SEBI) revoking its earlier interim orders read with confirmatory order qua Best Healthcare Private Limited, Fern Healthcare Private Limited and Modland Wears Private Limited and directed that the ongoing proceedings be substituted with adjudication proceedings. The order clarified that the Company and Fortis Hospitals Limited (FHsL) were at liberty to pursue remedies under law, as deemed appropriate by them, against the above mentioned entities in respect of their role in the diversion of funds.

Subsequently, a Show-Cause Notice (SCN) was issued by SEBI to various entities including the Company and FHsL on November 20, 2020, which alleged that the consolidated financials of FHL at the relevant period were untrue and misleading for the shareholders and the Company has circumvented certain provisions of the SEBI Act, Securities Contracts (Regulation) Act, 1956, and certain SEBI regulations.

In response, a joint representation / reply was filed by the Company and FHsL on December 28, 2020 praying for quashing of the SCN on various grounds, after which oral submissions in response to the SCN were made in a personal hearing before the SEBI Whole Time Member on January 20, 2021 and a written synopsis of the same was also filed thereafter. We await the outcome of the hearing before SEBI. Details of this matter is provided in note 29(a) of consolidated financial statements.

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 '' 10 each of the Company. During the year under review, no option was granted by the Company. Disclosure pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 for the year ended March 31, 2021 is available at the website of the Company at https://www.fortishealthcare.com/investors - Annual Report / ESOP Disclosure 2020-21.

During the year under review, "no stock options were exercised under the terms of the "Employee Stock Option Plan 2007 and "Employee Stock Option Scheme 2011".

The certificate from the Statutory Auditors of the Company stating that the Schemes have been implemented in accordance with the SEBI Regulations would be placed at the ensuing 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 enclosed herewith as "Annexure - III".

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The 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''s Report. Further, details pertaining to Foreign Exchange Earnings and Outgo is as given below:

Total Foreign Exchange Earned and Used (Based on Standalone Financial Statements) during the financial year ended March 31, 2021:

Particulars	Amount (in '' Crores)
Foreign Exchange earned in terms of Actual Inflows	2.10
Foreign Exchange outgo in terms of Actual Outflows	1.06
Note: Earning and expenditure in foreign currency is on	accrual basis.

CORPORATE SOCIAL RESPONSIBILITY - OUR JOURNEY THROUGH THE PAST YEAR

During FY 2020-21, Fortis Healthcare Limited along with its subsidiaries contributed a total of '' 14.25 Crores towards various Corporate Social Responsibility (CSR) initiatives.

As a responsible corporate member of the Indian healthcare ecosystem, Fortis Healthcare Limited strongly believes that we can meaningfully alleviate the problem of inequitable access to quality healthcare. By creating and supporting social sector programmes 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. Following a rigorous needs assessment, we have enabled initiatives & programmes aimed at creating social awareness and bringing about a positive change in the communities.

The Company''s CSR initiatives follow a ''need based'' program approach. CSR activities are carried out in a collaborative and inclusive manner not only to align and synergise the social enterprise work of the group companies but also to expand the circle of partnerships with Government, Non-Government Organisations (NGOs), other Corporates and Individuals. The CSR initiatives of the Company are in line with India''s Sustainable Development Goal (SDG) of ''Good health and well-being'' and also supporting Government initiative as per Schedule VII of Section 135 of the Companies Act, 2013.

The Company and its subsidiaries supported the efforts of the Government in the fight against COVID-19, Research & Development and Central Armed Police Forces (CAPF) & also supported Central Para Military Forces (CPMF) veterans and their dependents including widows.

Fortis Healthcare Limited and Fortis Hospotel Limited: This year Company and one of its wholly owned subsidiary viz Fortis Hospotel Limited contributed its CSR Fund to "Bharat Ke Veer" fund to support Central Armed Police Forces

(CAPF) & Central Para Military Forces (CPMF) veterans and their dependents including widows. A fund-raising initiative by the Ministry of Home Affairs, Govt. of India on behalf of members of the Indian paramilitary Forces. They are always on duty and have round the clock commitments throughout the year, without any consideration for leave, holidays, weekends, festivals and personal commitments. They work in a very hazardous conditions and stress compiled with unhygienic living conditions. Many lost their life in terrorist / Naxalite attacks. Our contribution will support the dependents and widows of Braveheart heroes.

Escorts Heart Institute and Research Centre Limited and SRL Limited:

This year Escorts Heart Institute and Research Centre Limited and SRL Limited contributed CSR fund to ICMR (The Indian Council of Medical Research) fund to support research and development projects in the field of science, technology, engineering and medicine. The fund to ICMR is duly approved CSR fund as per Schedule VII of Section 135 of the Companies Act. The ICMR has always attempted to address itself to the growing demands of scientific advances in biomedical research on the one hand, and to the need of finding practical solutions to the health problems of the country, on the other.

Particulars pursuant to Clause O of Sub-Section 3 of Section 134 of The Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is given in "Annexure V".

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company as on date of this report comprises twelve directors, of which one is a Managing Director and CEO (Executive Director), four are Independent Directors and rest of the seven directors are Non-Executive & Non-Independent Directors. Pursuant to Sections 152 of the Companies Act, 2013, Dr. Kelvin Loh Chi Keon and Mr Heng Joo Joe Sim are liable to retire by rotation and being eligible offers themselves for re-appointment at the forthcoming Annual General Meeting of the Company. During the year under review, the Board of Directors has appointed Mr. Dilip Kadambi and Ms Shailaja Chandra as Directors of the Company w.e.f. June 4, 2020 and June 28, 2020, respectively. The matter(s) related to their appointment was placed before the shareholders at the twenty fourth Annual General Meeting of the Company held on August 31, 2020.

During the year under review, the Board of Directors has co-opted Mr Takeshi Saito and Mr Joerg Ayrle as an additional director(s) w.e.f. September 1, 2020 & March 31, 2021 respectively. The matter(s) related to their appointment are being placed at the forthcoming Annual General Meeting. Further, during the year under review, Mr Low Soon Teck has resigned from directorship of the Company w.e.f. June 4, 2020. Your Board places on record its appreciation for the contribution made by Mr. Low Soon Teck during his association with the Company.

Dr. Ashutosh Raghuvanshi was appointed as Chief Executive Officer with effect from March 18, 2019 and Chief Executive Officer and Managing Director (''CEO & MD'') of the Company with effect from March 19, 2019 for a period of three years. The matter related to his re-appointment as CEO & MD for a further period of three years with effect from March 19, 2022 is being placed at the forthcoming Annual General Meeting. Brief resume of the directors being appointed and / or proposed to be regularised at the forthcoming Annual General Meeting is separately disclosed in the Notice of the ensuing 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 FY 2020-21, Ten (10) 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 Key Managerial Personnel are as under:

Name	Designation
Dr. Ashutosh Raghuvanshi	Managing Director and Chief Executive Officer
Mr Vivek Kumar Goyal	Chief Financial Officer
Mr Sumit Goel	Company Secretary

Disclosures regarding the following are mentioned in report on Corporate Governance forming part of this report.

1. Composition of Committee(s) of the Board of Director and other details;

2. Details of establishment of Vigil Mechanism;

3. Details of remuneration paid to all the Directors including Stock options; and

4. Commission received by Independent Director(s); if any.

S. No.	Process	Remarks	Criteria for Evaluation (including Independent Directors)
1.	Kick Off Board Evaluation Program	The Chairperson kick starts the process. Appointed and designated independent external agency as Process Coordinator
2.	Evaluation forms and One to One discussion	Process Coordinator interacted with the Board members to assess performance, invite direct feedback and seek inputs to identify opportunities for improvement. Process Coordinator circulated the feedback questionnaire to the board members and invited feedback from individuals, after collecting the key findings, one to one discussions were conducted to seek further clarity.	This includes Board focus (Strategic inputs), Board Meeting Management, KPI''s, suggestions to improve Board performance, Board Effectiveness, Management Engagement, Governance, Risk Management and addressing of follow up requests.
3.	Evaluation by the Board and of Independent Directors	A compilation of the individual self-assessments and one to one discussions were placed at the meetings of the Independent Director''s (ID''s) and the Board of Directors (BoD) for them to review collectively.	This includes demonstration of integrity, commitment, attendance at the meetings, contribution and participation, professionalism, contribution while developing Annual Operating Plans, demonstration of roles and responsibilities, review of high risk issues & grievance redressed mechanism, succession planning, working of Board Committees etc.
4.	Final recording and reporting	Based on the above, a final report on Board Evaluation 2020-21 was presented at a meeting of the Board of Directors held on May 29, 2021.	NA

Name of the Director	Remuneration of Director ('' in Crores)	Median Remuneration of Employees ('' in Crores)	Ratio
Dr. Ashutosh Raghuvanshi	6.22	0.021	283:1

The Board of Directors of the Company, in order to give objectivity to the evaluation process identified an independent third party for conducting board evaluation exercise for this financial year.

The following process of evaluation was approved by the Nomination and Remuneration Committee and the Board of Directors:

Particulars	For the FY 2020-21
(A) Average percentile increases already made in the salaries of employees other than the managerial personnel	During the year no increments were given across the Group due to COVID pandemic.
(B) Percentile increase in the managerial remuneration
Comparison of (A) and (B)
Justification
Any exceptional circumstances for increase in the managerial remuneration

BOARD EVALUATION

MANAGERIAL REMUNERATION

Disclosures pursuant to Rule 5 of the 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 FY 2020-21

(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: During the year there was no change in the remuneration / no increments were given across the Group due to COVID pandemic.

(d) The number of permanent employees on the rolls of the Company is 2,680 as on March 31, 2021 as compared to 2644 as on March 31, 2020.

(f) During the FY 2020-21, '' 2,50,10,160 variable pay was paid to Dr. Ashutosh Raghuvanshi, MD and CEO, '' 80,19,150 to Mr Vivek Kumar Goyal, Chief Financial Officer and '' 5,71,122 to Mr. Sumit Goel, Company Secretary for FY 2019-20.

(g) Remuneration 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. The same is governed by Board of Directors Governance Standard and it is available on the website of the Company at https://www. fortishealthcare.com/investors - Corporate Governance / Policies / Codes / Board Governance Document. Details of Remuneration Policy and changes, if any, are stated in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the 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.

RELATED PARTY TRANSACTIONS

Disclosures as required under Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given

in "Annexure - VI" in Form AOC- 2 as specified under the Companies Act, 2013.

The Related Party Transactions are placed before the Audit Committee for approval as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable 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 Committee for their review on a quarterly basis.

The Company has developed a Related Party Transactions Framework for the purpose of identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at https://www.fortishealthcare.com/investors - Corporate Governance / Policies / Codes / Policy on Related Party Transactions.

None of current Directors have had 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 as disclosed in this Annual Report.

RISK MANAGEMENT POLICY

The Company has designed a risk management policy and framework for risk identification, assessment, mitigation plan development and monitoring of action to mitigate the risks. The key objective of the ERM policy is to provide a formalised framework to enable judicious allocation of resources on the critical areas which can adversely impact the Company''s ability to achieve its objectives. The policy is applicable to the Company and its subsidiaries. This framework enables the management to develop and sustain a risk-conscious culture, wherein, there is a high degree of organisation-wide awareness and understanding of external and internal risks associated with the business. The policy defines an architecture and oversight structure to assist effective implementation. By clearly defining terms and outlining roles and responsibilities, ERM promotes risk ownership, accountability, self-assessment and continuous improvement to minimise adverse impact on achievement of business objectives and enhance the Company''s competitive advantage. The details thereof are covered under the Management and Discussion Analysis Report which forms part of the Annual Report

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT

The 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 and Rules made thereunder, the Company has constituted Internal Complaints Committees (ICC). During the FY 2020-21, the Company received Three (''3'') complaints on sexual harassment and Three (''3'') complaints were resolved with appropriate action taken and no complaint was pending as on March 31, 2021. The same may also be read in terms of Companies (Accounts) Rules, 2014.

DISCLOSURE REQUIREMENTS

CODE OF CONDUCT

Declaration by Dr. Ashutosh Raghuvanshi, Managing Director and Chief Executive Officer confirming compliance with the ''Fortis Code of Conduct'' is enclosed with Corporate Governance Report.

CERTIFICATE BY STATUTORY AUDITORS FOR DOWNSTREAM INVESTMENT

A certificate from the Statutory Auditors of the Company stating that the Company has duly complied with the requirements of downstream investment made by the Company to second level entities in accordance with Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 would be available at the Annual General Meeting for inspection by members.

DIRECTORS'' RESPONSIBILITY STATEMENT

(a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures therefrom, if any;

(c) except for the findings of the Investigation Report done earlier and the findings of the additional procedures/ enquiries concluded during the year, all of which pertained to earlier years, described in Note 28 in the Notes to the Consolidated Financial Statements and Note 27 in the notes to the Standalone Financial Statements, proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(d) the Statements have been prepared on a going concern basis for the reasons stated in Note 36 in the Notes to the Consolidated Financial Statements and Note 30 in the notes to the Standalone Financial Statements;

(e) except for certain control lapses identified in the Investigation Report done earlier and in the findings of the additional procedures/enquiries concluded during the year, all of which pertained to earlier years as described in Notes 28 in the Notes to the Consolidated Financial Statements and Note 27 in the Notes to the Standalone Financial Statements, proper internal financial controls have been laid down and that such internal financial controls are adequate and are operating effectively; and

(f) except for the matters on related parties and managerial remuneration, all of which pertained to earlier years described in Note 28 (A) (ii) and 28 (C) (vi) in the Notes to the Consolidated Financial Statements and Note 27 (A) (ii) and 27 (C) (vi) in the notes to the Standalone Financial Statements, there are proper systems in place to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank all doctors, nurses, technicians and staff members who have been battling COVID-19. Their heroic performance under enormous stress is what really makes us a world-class healthcare provider. Your Directors offer their deepest condolences to the bereaved families of Fortisians who lost their loved ones and pray for the early recovery of those who have been infected. Ensuring the health and well-being of our employees, especially the frontline healthcare workers, is paramount and the steps taken towards ensuring their protection during the COVID pandemic is praiseworthy. At the same time, the Fortis team is playing a significant role in the ongoing nation-wide vaccination drive in tandem with the Government directives, reaffirming our pivotal role as a trustworthy healthcare provider.

Your Directors are glad to place on record that Fortis has posted a strong financial performance in spite of the pandemic. This is truly amazing and the Board is proud of each one of you for this achievement. It speaks volumes about your dedication and commitment. Your Board is confident that the team will do much better, as the situation improves. Your Directors are very appreciative of the fantastic work being done and have high hopes that you will continue to deliver wonderful outcomes.

Your Directors also 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 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.

By Order of the Board of Directors For Fortis Healthcare LimitedSd/- Sd/-

Ashutosh Raghuvanshi Indrajit Banerjee

MD & CEO Independent Director

DIN: 02775637 DIN: 01365405

Date: May 29, 2021 Date: May 29, 2021

Place: Gurugram Place: New Delhi

Mar 31, 2018

DIRECTORSâ REPORT

Dear Members,

The Directors have pleasure in presenting here the Twenty Second Annual Report of your Company along with the Audited Standalone and Consolidated Financial Accounts and the Auditorsâ Report thereon for the Year ended March 31, 2018.

FINANCIAL RESULTS

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

(Rs, in Lacs)

Particulars	Consolidated
	Year ended March 31, 2018	Year ended March 31, 2017
Continuing Operations
1. Operating Income	456,081	457,371
2. Other Income	13,973	16,601
3. Total Income (1 2)	470,054	473,972
4. Total Expenditure (Excluding finance cost, depreciation & tax expenses)	428,769	422,083
5. Operating Profit (EBITDA) (3-4)	41,285	51,889
6. Finance Charges, Depreciation & Amortization	49,675	45,162
7. Loss before exceptional items and tax (5-6)	(8,390)	6,727
8. Exceptional items	(88,103)	(164)
9. Loss before tax (7 8)	(96,493)	6,563
10. Tax Expenses	2,265	7,240
11. Net Profit for the year (9-10)	(98,758)	(677)
12. Share in profits of associate companies	5,316	48,606
13. Profit/ (Loss) for the year from continuing operations (11 12)	(93,442)	47,929
14. Discontinuing Operations
Profit/ (Loss) before tax from discontinuing operations	-	-
Tax expense of discontinuing operations	-	-
Profit/ (Loss) after tax and before minority interest from discontinuing operations
Share in profits/ (losses) of associate companies	-	-

Particulars	Consolidated
Particulars	Year ended March 31, 2018	Year ended March 31, 2017
Profit for the year from discontinuing operations (B)	-	-
15. Profit for the year (13 14)	(93,442)	47,929
Profit for the year attributable to:
Owners of the Company	(100,921)	42,167
Non-controlling interests	7,479	5,762
Profit for the year before other comprehensive income	(93,442)	47,929
16. Other comprehensive income	367	(2,734)
17. Total comprehensive income (15 16)	(93,075)	45,195
Total comprehensive income for the year attributable to:
Owners of the Company	(100,541)	39,457
Non-controlling interests	7,466	5,738

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

(Rs, in Lacs)

Particulars	Standalone
Particulars	Year ended March 31, 2018	Year ended March 31, 2017
Continuing Operations
1. Operating Income	65,948	64,511
2. Other Income	13,789	16,920
3. Total Income (1 2)	79,737	81,431
4. Total Expenditure (Excluding finance cost, depreciation & tax expenses)	69,710	79,164
5. Operating Profit (EBITDA) (3-4)	10,027	2,267
6. Finance Charges, Depreciation & Amortization	9,262	13,298
7. Loss before exceptional items and tax (5-6)	765	(11,031)
8. Exceptional items	(6,794)	(373)
9. Loss before tax (7 8)	(6,029)	(11,404)
10. Tax Expenses	343	(3,934)
11. Net Profit for the year (9-10)	(6,372)	(7,470)
12. Discontinuing Operations
Profit/ (Loss) before tax from discontinuing operations	-	-
Tax expense of discontinuing operations	-	-
Profit/ (Loss) after tax and before minority interest from discontinuing operations

Particulars	Standalone
Particulars	Year ended March 31, 2018	Year ended March 31, 2017
Share in profits/ (losses) of associate companies	-	-
Profit for the year from discontinuing operations (B)	-	-
13. Profit for the year (11 12)	(6,372)	(7,470)
14. Other comprehensive income	32	107
15. Total comprehensive income (13 14)	(6,340)	(7,363)

STATE OF COMPANYâS AFFAIR, OPERATING RESULTS AND PROFITS

The Financial Performance of the business during FY 2017-18 was impacted by external headwinds related to the healthcare sector and internal challenges. Factors that impacted the performance include i) Regulatory changes with respect to pricing on certain medical consumables, ii) Management bandwidth constraints due to distraction arising from promoter related issues leading to change in controlling interest, iii) Prolonged transaction and due diligence process to augment capital resources along with restructuring of ownership, iv) Constraints in capex resulting in delay of certain significant business initiatives and v) Impact on the hospital business, specifically in North India, over a few months during the year arising from several highly publicized patient related incidents in a few hospitals.

For the Financial Year 2017-18, the Company recorded a consolidated revenue from operations of Rs, 4,561 Crore compared to Rs, 4,574 Crore reported during the previous year. Consolidated total income (including other income) from the operations for the Financial Year 2017-18 was at Rs, 4,701 Crore compared to Rs, 4 ,740 Crore in the previous year. Operating Profit (EBITDA) for the year stood at Rs, 413 Crore compared to Rs, 519 Crore in the previous year. The Net Profit after Tax for the Financial Year 2018 stood at Rs, (1009) Crore as against Rs, 422 Crore for the corresponding previous year. FY2018 PAT after Minority Interest and Share in Associates (PATMI) was primarily impacted by certain provisions and impairment losses.

Your Company accords the highest priority to providing world-class quality and affordable healthcare services to all patients. During the year, your Company commenced several new medical programmes and specialities across various facilities whilst strengthening the existing medical offerings. Patient centricity and clinical excellence continue to drive your Company while it makes all efforts to bridge the expanding demand-supply gap in the delivery of healthcare services in the country. Your Company also has a number of ambitious projects on the anvil, aimed at spurring growth and development.

The healthcare verticals of the Company primarily comprise day care specialty, diagnostics and tertiary and quaternary care. As of March 31, 2018,

the Company had a network of 43 healthcare facilities (including projects under development in India and abroad, with approximately 4,800 operational beds. In India, the Company is one of the largest private healthcare chains comprising a network of 39 healthcare facilities, including 31 operating facilities, 3 satellite and heart command centres located in public and private hospitals and 5 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 368 laboratories including 197 self-operated laboratories (includes 23 Wellness Centres which are in addition to Standalone Wellness Centres), 118 laboratories inside Hospitals including 27 labs located in Fortis facilities, 42 Franchisee labs, 7 wellness centres and 4 international laboratories. It also has over 5,539 Direct points, 1062 Collection Centers which includes 88 collection centers that are owned and 67 collection centres at International locations. Your Company is driven by the vision of becoming a leader in the integrated healthcare delivery space and of serving the larger purpose of saving and enriching lives through clinical excellence.

There has been no change in the nature of business of the Company during the year under review.

SIGNIFICANT MATTERS DURING THE YEAR UNDER REVIEW

The Board has from time to time during the year under review updated its stakeholders about the key developments that took place by disseminating necessary information to the stock exchanges and through various means of communications to the investors. Some of key activities are mentioned below:

- Investigation initiated by the erstwhile Audit and Risk Management Committee- Basis the reports in the media and enquiries from, inter alia, the stock exchanges received by the Company about certain inter-corporate loans (âICDsâ) given by a wholly owned subsidiary of the Company, the erstwhile Audit and Risk Management Committee of the Company in its meeting on February 13, 2018 decided to carry out an independent investigation through an external legal firm. The details as to the terms of reference of the investigation are detailed in the Notes to Financial Statements forming part of this Annual Report. Subsequent to the close of the Financial Year, the investigation report (âInvestigation Reportâ) was submitted to the current Board on June 8, 2018. The current Board discussed and considered the Investigation Report and noted certain significant findings of the external legal firm, which are subject to the limitations on the information available to the external legal firm and their qualifications and disclaimers as described in their Investigation Report are also detailed in the Notes to Financial Statements forming part of this Annual Report.

- Delay in submission of financial results for the Quarter ended September 30 and December 31, 2017 and Financial Year 2017-18- There have been many media news released relating to the Company during the period February and March, 2018, the necessary intimations of which have been made to the stock exchanges from time to time. This had resulted in enhancing the scope of limited review audit by the statutory auditors for the quarters ended September 30, 2017 and December 31, 2017, which, was considered just and equitable in the interest of governance and investors at large. In view of the above situation, the un-audited financial results for the quarter ended September 30 and December 31,

2017 were submitted to the stock exchanges beyond the stipulated period as per SEBI Regulations. Also, in view of the ongoing investigations coupled with promoter related issues, the un-audited financial results for the quarter and Financial Year ended March 31, 2018 were also submitted to the stock exchanges beyond the stipulated period. References to the above non-compliances have been explained in Corporate Governance Report forming part of this Annual report.

- RHT Acquisition- The Board of Directors in their meeting held on November 14, 2017 approved a significant restructuring initiative aimed at consolidating the entire India asset portfolio of RHT Health Trust (âRHTâ) into the Company and its subsidiaries. The Company and the Trustee Manager of RHT signed a binding Term Sheet on November 14, 2017 and entered into an exclusivity arrangement for the acquisition of all the securities of RHTâs entities in India, directly or indirectly holding the clinical establishments and businesses for an enterprise value of approximately Rupees 465,000 lacs (âthe Proposed Transactionâ). On February 12, 2018, parties to the Term Sheet entered into definitive agreement(s) with respect to the Proposed Transaction. The completion of the Proposed Transaction is subject to the satisfaction of conditions precedent enumerated in the definitive agreement(s) which includes regulatory approvals. The Company and RHT are in process of applying for regulatory approvals. Requisite approval of the shareholders of the Company have been obtained.

- Fortis and SRL Brand-The âFortisâ trademark was owned by RHC Holding Pvt Ltd. (RHCPL)- erstwhile ultimate holding company of Fortis Healthcare Limited ( FHL) and FHL used to pay the license fees to RHCPL for use of the trademark âFortisâ as per the various terms of the Brand License Agreement entered between FHL and RHCPL. RHCPL during the Financial Year 2017-18 assigned all the rights, title and interest in the âFortisâ trademark to RHC Healthcare Management Services Private Limited (RHMSL) and subsequent to that the license fees for use of the trademark âFortisâ has been accrued and paid by FHL to RHMSL till March 2018.

SRL Limited (SRL) entered into a Brand License Agreement with RHC Holding Private Limited (RHCPL) in November 2015 valid until May 2021 according to which SRL paid a fee as per the various terms of the Brand License Agreement entered between SRL and RHCPL. RHCPL, assigned all the rights, title and interest in the âSRLâ trademark to Headway Marketing Private Limited (HMPL) in December 2017 and intimated SRL in February 2018. SRL has accrued the fee payable to Headway Marketing Private Limited.

DIVIDEND AND TRANSFER TO RESERVES

Keeping in view the losses for the year under review, the Board of Directors of your Company have not recommended any dividend for the Financial Year 201718. Accordingly, there has been no transfer to general reserves.

The Company has formulated a Dividend Policy in terms of SEBI Circular No. SEBI/LAD-NRO/6N/2016-17/008 and the same is available on the website of the Company at http://cdn.fortishealthcare. com/0.06032700_1507627501_Dividend-Distribution-Policy.pdf .

MATERIAL CHANGES

The following are the material changes and commitments, affecting the financial position of the Company which have occurred between the end of the Financial Year 2017-18 and the date of this report:

- Fund-raising proposal- The Board of Directors, at its meeting on March 27, 2018, approved a Composite Scheme of Arrangement with Manipal Health Enterprises Private Limited. Owing to concerns raised by certain shareholders of the Company, binding bids were invited from interested parties viz IHH Healthcare Berhad, Hero-Burman Consortium, Radiant and TPG-Manipal Consortium. The Board decided to appoint an Expert Advisory Committee (EAC) & an additional financial advisor to evaluate all binding offers. Subsequently, in the Board Meeting held on May 10, 2018, the Board, by majority, approved a preferential allotment of equity shares for Rupees 800 Crores and preferential allotment of warrants for Rupees 1,000 Crores to Hero-Burman Consortium. Consequent upon this agreement, the agreement with TPG-Manipal Consortium was terminated. Further on the May 28, 2018 the Board received a letter from Hero-Burman Consortium giving its consent to initiate a fresh bidding process; consequently the Hero-Burman Consortiumâs offer, accepted by the Board on May 10, 2018, was mutually terminated. The Board at its meeting held on May 28-29, 2018 decided to initiate a fresh, time-bound process for receiving bids from interested parties. The details of the process were disclosed to the National Stock Exchange of India Limited and BSE Limited. Pursuant to the above, the Board of Directors of the Company received binding bids on July 3, 2018 from IHH Healthcare Berhad and TPG-Manipal Consortium. The Board on July 13, 2018, unanimously accepted the proposal of IHH Healthcare Berhad, which included an infusion of '' 4000 crore in the Company through additional equity capital and recommended for shareholder approval. The proceeds of the issue shall primarily be used for: (i) acquisitions contemplated under the master purchase agreement dated 12 February

2018 among, inter alia, the RHT Health Trust Manager Pte. Ltd and the Company in relation to the proposed disposal of the entire asset portfolio of

RHT Health Trust; (ii) providing exit to the private equity investors of SRL Limited; and (iii) other short term liquidity needs of the Company (i.e. to meet the Companyâs working capital requirements, capital expenditure for identified infrastructure upgrades, salary payments, statutory dues, immediate creditors, other corporate expenses, and cost of raising funds and retiring high cost debt). The same is currently subject to the approval of the regulatory authorities. Upon approval of transaction pursuant to acceptance of the binding bids, there will be consequential change in the capital structure and board composition.

- Changed Board- The Company appointed Mr. Rohit Bhasin as Additional Independent Director w.e.f. April 19, 2018 (who thereafter resigned w.e.f. June 26, 2018). Also the Company received a requisition from National Westminster Bank Plc as Trustee of Jupiter India Fund (as represented by Jupiter Asset Management Limited), East Bridge Capital Master Fund Ltd. and East Bridge Capital Master Fund I Ltd., the shareholders of Company, for induction of Ms. Suvalaxmi Chakraborty, Mr. Ravi Rajagopal and Mr. Indrajit Banerjee as members of the Board and removal of Mr. Harpal Singh, Ms. Sabina Vaisoha, Dr. Brian William Tempest and Lt. Gen. Tejinder Singh Shergill from the directorship of the Company. Considering the profiles of the proposed board members, the Board at its meeting held on April 26, 2018, decided to appoint the new board members on immediate basis. Accordingly, Ms. Suvalaxmi Chakraborty, Mr. Ravi Rajagopal and Mr. Indrajit Banerjee were appointed as Additional Independent Directors w.e.f. April 27, 2018. Subsequently, Mr. Harpal Singh, Ms. Sabina Vaisoha and Lt. Gen. Tejinder Singh Shergill resigned from the directorship w.e.f. May 20, 2018 and the shareholders at its meeting held on May 22, 2018, regularized Ms. Suvalaxmi Chakraborty, Mr. Ravi Rajagopal and Mr. Indrajit Banerjee as directors of the Company and removed Dr. Brian William Tempest from directorship. On June 1, 2018, the board unanimously decided to appoint Mr. Ravi Rajagopal as Chairman of the Company.

- Withdrawal of the Scheme of Amalgamation and Demerger amongst SRL Limited and Fortis Malar Hospitals Limited- The Company had at its board meeting held on August 19, 2016 approved the composite scheme of arrangement and amalgamation involving (a) transfer of the hospital business undertaking of Fortis Malar Hospitals Limited (âFMHLâ) to the Company, as a going concern, by way of slump sale, in lieu of payment of a lump sum consideration by the Company to FMHL (âSlump Saleâ), (b) transfer of the undertaking of the Company pertaining exclusively to the diagnostics business as identified in the Scheme to FMHL by way of a demerger in lieu of issuance of equity shares by FMHL to shareholders of the Company as per approved share entitlement ratio (âDemergerâ); (c) the amalgamation of SRL Limited (âSRLâ) into FMHL and dissolution of SRL without winding up, and the consequent issue of equity shares by FMHL to the shareholders of SRL and the cancellation of equity shares of SRL held by FMHL (âAmalgamationâ), and various other matters consequential or otherwise integrally connected therewith. The Company had obtained necessary approvals/ no objection from BSE Limited, National Stock Exchange of India Limited, equity shareholders and unsecured creditors of the Company. Also, the Board had through circulation on December 14, 2017, approved extension of the Long Stop Date of the Scheme from December 31, 2017 to June 30, 2018. Considering that the entire process, due to reasons beyond the Companyâs control, has been continuing for over 18 months without a completion, it was agreed to abort the Scheme. Accordingly, the Company at its hearing on June 15, 2018 presented the matter before NCLT and the same was duly approved. The said Scheme has thus been terminated by the Company, SRL and FMHL.

- Sale of certain units held in RHT Health Trust- In order to meet urgent cash requirement, the Company had sold 18.2 million units of RHT Health Trust (an associate of the Company) held through the wholly owned subsidiary Fortis Healthcare International Limited on May 30, 2018 for a consideration of 13.65 million Singapore Dollars.

- Disinvestment of shareholding held in Lalitha Healthcare Private Limited (LHPL)- The Company has through its subsidiary- Fortis Cancer Care Limited divested its entire shareholding in LHPL (79.43% equity stake) on June 29, 2018 due to recurring financial losses and infrastructure constraints.

- Re-classification of category of shareholders- The Company is in process of seeking regulatory approvals for re-classification of Mr. Malvinder Mohan Singh, Malvinder Mohan Singh- Trust, Dr. Shivinder Mohan Singh, Mr. Harpal Singh, Mr. Abhishek Singh, Fortis Healthcare Holdings Private Limited, Malav Holdings Private Limited and RHC Holding Private Limited, from the âPromoter and Promoter Groupâ to the âPublicâ shareholding of the Company and classification of Northern TK Venture Pte Ltd as âPromoterâ subsequent to the completion of the preferential allotment of Equity Shares to Northern TK Venture Pte Ltd.

- Other key movements- The Board terminated the employment of Mr. Malvinder Mohan Singh as Lead- Strategic Initiatives w.e.f. June 26, 2018. The details in this regard have been duly incorporated in the notes to financial statement for FY 2017-18. Updates w.r.t. ongoing regulatory investigations (viz. SEBI and SFIO), outcome of the Luthra and Luthra Investigation Report and other legal matters are also detailed in the notes to financial statement for FY 2017-18.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Statutory Auditors have, in their report to the Board of Directors on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) made the following Adverse Opinion and are categorized as âAdverse Opinionâ. The directors response to the comments of the auditors is given below :

Basis for Adverse Opinion

The matters described in the Basis for Qualified Opinion paragraphs and in paragraph 1 of the section âReport on Other Legal and Regulatory Requirementsâ of our Audit Report on the Consolidated Ind AS Financial Statements for the year ended March 31, 2018, and the control weaknesses observed in the Companyâs financial closing and reporting process in regard to assessment of the impairment of goodwill where the Company did not have adequate internal controls for identifying impairment indicators, selection and application of various inputs to be used in testing, review and maintaining documentation for workings used in testing and concluding whether there is any impairment, have resulted in material weaknesses in the internal financial controls over financial reporting as the Company and its subsidiaries have not (a) adhered to their internal control policies (b) safeguarded their assets (c) prevented and detected possible frauds and errors (d) ensured the accuracy and completeness of the accounting records, and (e) prepared reliable financial information on a timely basis.

A âmaterial weaknessâ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companyâs annual or interim financial statements will not be prevented or detected on a timely basis.

Adverse Opinion

In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors referred to in the Other Matters paragraph below, because of the effect/possible effect of the material weaknesses described in the Basis for Adverse Opinion paragraph above on the achievement of the objectives of the control criteria, the Company, its subsidiary companies, its associate companies and a jointly controlled company, which are companies incorporated in India, have not maintained adequate internal financial controls over financial reporting and the internal controls were also not operating effectively as of March 31, 2018 based on the internal financial control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Control Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the Consolidated Ind AS Financial Statements of the Company for the year ended March 31, 2018 and these material weaknesses have, inter alia, affected our opinion on the said Consolidated Ind AS Financial Statements and we have issued a qualified opinion on the said Consolidated Ind AS Financial Statements.

Directorâs response to comments of the statutory auditors in the Audit Report:

In relation to the deficiencies identified in impairment of goodwill, the Company will strengthen the appropriate internal controls for identifying impairment indicators, selection and application of various inputs to be used in testing, review and maintaining documentation for workings used in testing and concluding whether there is any impairment, which could potentially result in material misstatement in the financial statements arising from inaccurate carrying value of goodwill and impairment thereof reported in the financial statements. Further, in order to strengthen the testing of control under ICFR a direction has been given to the management to develop a process of quarterly testing plan to cover sample hospitals every quarter with the help of an external firm to ensure independence.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES

During the year under review:

- The aggregate shareholding of Fortis Healthcare Holdings Private Limited (FHHPL) has been reduced to less than 51% and thereby FHHPL ceases to be the Holding Company of your Company (as per the definition given under Companies Act, 2013);

- The Company acquired additional 15% stake in M/s. Hiranandani Healthcare Private Limited, a subsidiary company from M/s. Fortis Healthcare Holdings Private Limited, a promoter company w.e.f. July 28, 2017 at a consideration of Rs, 61 crore;

- M/s. Fortis Hospitals Limited acquired additional 51% stake in M/s. Fortis Emergency Services Limited, its associate company from M/s. Fortis Healthcare Holdings Private Limited, a promoter company w.e.f. July 28, 2017 at a consideration of Rs, 25500. Consequently, it became a wholly owned subsidiary;

- M/s. Escorts Heart Institute and Research Centre Limited acquired additional 70.61% stake in M/s. Fortis HealthStaff Limited, its subsidiary company from M/s. Fortis Healthcare Holdings Private Limited and M/s. RHC Holding Private Limited, promoter companies w.e.f. July 28, 2017 at an aggregate consideration of Rs, 3,46,000. Consequently, it became a wholly owned subsidiary. Subsequently, EHIRCL advanced a loan to Fortis Healthstaff Limited, which was used to repay the outstanding unsecured loan amount of Rs, 794.50 lacs to a promoter group company, the details of which are disclosed under Notes to Financial Statements forming part of this Annual report ; and

- The Company sold its entire stake (49% in aggregate) in M/s. Fortis Medicare International Limited, an associate company, to M/s. Fortis Global Healthcare Private Limited, a promoter company on August 30,

2017 at 1 USD, as part of business strategy and with a view of de-linkage from the promoters .

Further note that your Board of Directors have adopted a policy for determining âmaterial subsidiaryâ pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The said policy is available at http:// cdn.fortishealthcare.com/Policy-on-material-subsidiary. pdf .

In terms of the said policy, Fortis Hospitals Limited (FHsL) and SRL Limited (SRL) are considered as Material Subsidiary(ies). Necessary compliances w.r.t. material subsidiaries have been duly carried out except that the Company is yet to appoint an Independent Director from the Board of Fortis Healthcare Limited on the Boards of FHsL.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The consolidated financial statements ofthe 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. 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/GUARANTEES

Particulars of Loans/Advances/Investments/guarantees given and outstanding during the Financial Year 2017-18 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 by members at every Annual General Meeting.

Though the Ministry of Corporate Affairs has vide Companies Amendment Act, 2017, (effective May 7, 2018) removed the requirement of placing the matter relating to appointment of statutory auditors for ratification by members at every annual general meeting, your Company as a matter of good governance, and based on the recommendations of the Audit and Risk Management Committee, 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 ofthe Company made the following comments which are self-explanatory and are categorized as âMatter of Emphasisâ, hence no comments in this regard have been offered by your Board of Directors.

a) Notes 14 (II) (A) and (B) relating to outcome of income tax assessments in respect of Escorts Heart Institute and Research Centre Limited (EHIRCL), one of the subsidiaries in the Group, regarding amalgamation of two Societies and its subsequent conversion to EHIRCL.

b) Notes 14 (II)(C), (D) and (E) relating to the outcome of the civil suit / arbitrations with regard to termination of certain land leases allotted by Delhi Development Authority (DDA) and the matter related to non-compliance with the order of the Honâble High Court of Delhi in relation to provision of free treatment / beds to poor by Escorts Heart Institute and Research Centre Limited.

c) Note 14 (III) regarding matter relating to termination of Hospital lease agreement of Hiranandani Healthcare Private Limited, one of the subsidiaries in the Group, by Navi Mumbai Municipal Corporation (âNMMCâ) vide order dated January 18, 2018.

Based on the advice given by external legal counsel, no provision/ adjustment has been considered necessary by the Management with respect to the above matters in these Consolidated Ind AS Financial Statements.

The existing Statutory Auditors have, in their report to the Board of Directors on the Consolidated Financial Statements of the Company made the following qualification:

Basis for Qualified Opinion

1. As explained in Note 38 of the Consolidated Ind AS Financial Statements, pursuant to certain events/transactions, the erstwhile Audit and Risk Management Committee (the âARMCâ) of the Company decided to carry out an independent investigation by an external legal firm on certain matters more fully described in the said Note. The terms of reference for the investigation, the significant findings of the external legal firm (including identification of certain systemic lapses and override of internal controls), which are subject to the limitations on the information available to the external legal firm and their qualifications and disclaimers as described in their Investigation Report, are summarized in the said Note.

Also, as explained in the said Note:

a) As per the assessment of the Board, based on the investigation carried out through the external legal firm, and the information available at this stage, all identified/required adjustments/ disclosures arising from the findings in the Investigation Report, have been made in these Consolidated Ind AS Financial Statements.

b) With respect to the other matters identified in the Investigation Report, the Board intends to appoint an external agency of repute to undertake a scrutiny of the internal controls and compliance framework in order to strengthen processes and build a robust governance framework. They will also assess the additional requisite steps to be taken in relation to the significant matters identified in the Investigation Report including, inter alia, initiating an internal enquiry.

c) At this juncture the Board is unable to make a determination on whether a fraud has occurred on the Company in respect of the matters covered in the investigation by the external legal firm, considering the limitations on the information available to the external legal firm and their qualifications and disclaimers as described in their Investigation Report.

d) Various regulatory authorities are currently undertaking their own investigation (refer Note 39 of the Consolidated Ind AS Financial Statements), and it is likely that they may make a determination on whether any fraud or any other non-compliance/ illegalities have occurred in relation to the matters addressed in the Investigation Report.

e) Any further adjustments/disclosures, if required, would be made in the books of account pursuant to the above actions to be taken by the Board / regulatory investigations, as and when the outcome of the above is known.

In view of the above, we are unable to comment on the regulatory non-compliances, if any, and the adjustments / disclosures which may become necessary as a result of further findings of the ongoing or future regulatory / internal investigations and the consequential impact, if any, on these Consolidated Ind AS Financial Statements.

2. As explained in Notes 36 and 37 (b) of the Consolidated Ind AS Financial Statements, the Group has recognized a provision aggregating to Rupees 44,502.62 lacs against the outstanding ICDs placed (including interest accrued thereon of Rupees 4,259.62 lacs) and Rupees 2,549.02 lacs against property advance (including interest accrued thereon of Rupees 174.02 lacs), due to uncertainty of recovery of these balances. The recognition of interest income aggregating to Rupees 4,433.64 lacs as at March 31, 2018 on these doubtful ICDs and property advance is not in compliance with Ind AS 18 âRevenueâ and consequently interest income and exceptional items (net) are overstated to that extent.

3. As explained in Note 14 (I) of the Consolidated Ind AS Financial Statements, a Civil Suit has been filed by a third party (to whom the ICDs were assigned -refer Note 36 of the Consolidated Ind AS Financial Statements)(âAssigneeâ or âClaimantâ) against various entities including the Company (together âthe Defendantsâ), before the District Court, Delhi and have, inter alia, claimed implied ownership of brands âFortisâ, âSRLâ and âLa-Femmeâ in addition to certain financial claims. In connection with this, the District Court passed an ex-parte order directing that any transaction undertaken by defendants, in favour of any other party, affecting the interest of the Claimant shall be subject to orders passed in the said suit.

The Company has filed written statement denying all allegations made against it and prayed for dismissal of the Civil Suit on various legal and factual grounds. The Company has in its written statement also stated that it has not signed the alleged Term Sheet with the said certain party.

Whilst this matter was included as part of the investigation carried out by the external legal firm referred to in paragraph 1 above, the external legal firm did not report on the merits of the case since the matter was sub judice.

In addition to the above, the Company has also received four notices from the Claimant claiming (i) '' 1,800 lacs as per notices dated 30 May, 2018 and 1 June, 2018 (ii) Rupees 21,582 lacs as per notice dated 4 June, 2018; and (iii) and Rupees 1,962 lacs as per notice dated 4 June, 2018. All these notices have been responded to by the Company denying any liability whatsoever.

Separately, the certain party has also asserted rights to invest in the Company as part of the alleged transaction involving the Claimant. It has also alleged failure on part of the Company to abide by the aforementioned Term Sheet and has claimed ownership over the brands as well.

Since the Civil Suit is sub-judice, the outcome of which is not determinable at this stage, we are unable to comment on the consequential impact, if any, of the above matters on these Consolidated Ind AS Financial Statements.

4. As explained in Note 9(4) of the Consolidated Ind AS Financial Statements, related party relationships as required under Ind AS 24 - Related Party Disclosures and the Companies Act, 2013 are as identified by the Management taking into account the findings and limitations in the Investigation Report (Refer Notes 38 (d) (iv), (ix) and (x) of the Consolidated Ind AS Financial Statements) and the information available with the Management. In this regard, in the absence of specific declarations from the erstwhile directors on their compliance with disclosures of related parties, especially considering the substance of the relationship rather than the legal form, the related parties have been identified based on the declarations by the erstwhile directors and the information available through the known shareholding pattern in the entities. Therefore, there may be additional related parties whose relationship may not have been disclosed to the Group and, hence, not known to the Management.

In the absence of all required information, we are unable to comment on the completeness/accuracy of the related party disclosures/details in these Consolidated Ind AS Financial Statements and the compliance with the applicable regulations and the consequential impact, if any, of the same on these Consolidated Ind AS Financial Statements.

5. As explained in Note 37 (c) of the Consolidated Ind AS Financial Statements, the Company through its overseas subsidiaries made investments in an overseas fund. Subsequent to the year end, investments held in the fund were sold at a discount of 10%. As at March 31, 2018, the consequential foreseeable loss of Rupees 5,510.14 lacs (between the previously recorded carrying value of the investment and the amount subsequently realized) has been considered in these Consolidated Ind AS Financial Statements.

In absence of sufficient information available with the Group demonstrating the reasonability of the discount recorded as provision for foreseeable loss in the value of the investment in the overseas fund, we are unable to comment on the same.

6. As explained in Note 43 of the Consolidated Ind AS Financial Statements, the Company having considered all necessary facts and taking into account external legal advice, has decided to treat as non est the Letter of Appointment dated September 27, 2016, as amended, (âLoAâ) issued to the erstwhile Executive Chairman in relation to his role as âLead: Strategic Initiativesâ in the Strategy Function. The external legal counsel has also advised that the payments made to him under this LOA would be considered to be covered under the limits of section 197 of the Companies Act, 2013. The Company is in the process of taking suitable legal measures to recover the payments made to him under the LoA as also to recover all the Companyâs assets in his possession. The Company has sent a letter to the erstwhile Executive Chairman seeking refund of the excess amounts paid to him.

In view of the above, the amounts paid to him under the aforesaid LoA and certain additional amounts reimbursed in relation to expenses incurred (in excess of the amounts approved by the Central Government under section 197 of the Companies Act 2013 for remuneration & other reimbursements), aggregating to Rupees 2,002.39 lacs is shown as recoverable in the Consolidated Ind AS Financial Statements of the Company for the year ended March 31 2018. However, considering the uncertainty involved on recoverability of the said amounts a provision of '' 2,002.39 lacs has been made which has been shown as an exceptional item.

As stated above, due the nature of dispute and uncertainty involved, we are unable to comment on the tenability of the refund claim, the provision made for the uncertainty in recovery of the amounts, the recovery of the assets in possession of the erstwhile Director and other non-compliances, if any, with the applicable regulations and the consequential impact, if any, of the same on these Consolidated Ind AS Financial Statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of the subsidiaries, associates and joint ventures referred to in the Other Matters paragraphs below, except for the effects / possible effects of the matters described in the Basis for Qualified Opinion paragraphs above, which are not quantifiable, and our comments in paragraph

1 under the section âReport on Other Legal and Regulatory Requirementsâ below, the aforesaid Consolidated Ind AS Financial Statements give the information required by the Act in the manner so required and, give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the Consolidated state of affairs of the Group as at March 31, 2018, and their Consolidated loss, Consolidated total comprehensive loss, their Consolidated cash flows and Consolidated statement of changes in equity for the year ended on that date.

Directorâs response to comments of the statutory auditors in the Audit Report:

(a) With regard to the comments of the statutory auditors in paragraph 1 of the Basis for Qualified Opinion of Audit Report, pertaining to the Investigation Report, it is submitted that, based on the investigation carried out by the external legal firm, and the information available at this stage, all identified / required adjustments/ disclosures arising from the findings in the Investigation Report, have been made. However, the Board will be assessing additional requisite steps to be taken to address various matters identified in the report. Further, various regulatory authorities are currently undertaking their own investigation. Any further adjustments/ disclosures, if required, would be made in the books of account, pursuant to the actions to be taken by the Board and as and when the results of the various investigations are known. For more details please refer to Note 38 of consolidated financial.

(b) With regard to the comments of the statutory auditors in paragraph 2 of the Basis for Qualified

Opinion of Audit Report, pertaining to the recognition of interest income, please refer to Notes 28 and 36 of consolidated financial.

(c) With regard to the comments of the statutory auditors in paragraph 3 of the Basis for Qualified Opinion of Audit Report, pertaining to certain claims against the Company, the Company has filed appropriate submissions in the court denying all allegations and praying for dismissal of the suit. For more details, please refer to Note 14 of consolidated financial.

(d) With regard to the comments of the statutory auditors in paragraph 4(a) of the Basis for Qualified Opinion of Audit Report, pertaining to matters relating to grant of loans in the form of ICDâs to three borrower companies, this is a part of the investigation referred to in point no.1 above. Please refer to Notes 36 and 38of consolidated financial for more details.

(e) With regard to the comments of the statutory auditors in paragraph 4(b) of the Basis for Qualified Opinion of Audit Report, pertaining to the roll-over of ICDs, this is a part of the investigation referred to in point no.1 above. Please refer to Notes 36 and 38of consolidated financial for more details.

(f) With regard to the comments of the statutory auditors in paragraph 4(c) of the Basis for Qualified Opinion of Audit Report, pertaining to the acquisition of equity interest in Fortis Health staff Limited, this is a part of the investigation referred to in point no.1 above. Please refer to 38 for more details.

(g) With regard to the comments of the statutory auditors in paragraph 4(c) of the Basis for Qualified Opinion of Audit Report, pertaining to matters relating to acquisition of equity interest in Fortis Emergency Services Limited, please refer to 38.

(h) With regard to the comments of the statutory auditors in paragraph 5 of the Basis for Qualified Opinion of Audit Report, pertaining to related party transactions, please refer to Note 38.

(i) With regard to the comments of the statutory auditors in paragraph 6 of the Basis for Qualified Opinion of Audit Report, pertaining to the foreseeable loss in the value in the overseas fund, please note that the consequential foreseeable loss of Rupees 5,510.14 lacs, has been recorded and considered in the consolidated financial statements. For more details, please refer to Note 37(c) of consolidated financial.

(j) With regard to the comments of the statutory auditors in paragraph 7 of the Basis for Qualified Opinion of Audit Report, pertaining to the LoA issued to the erstwhile Executive Chairman, please note that the Company, having considered all necessary facts, has decided to treat as non est the LoA issued to the erstwhile Executive Chairman and is taking suitable legal measures to recover the payments made to him under the LoA as well as all the Companyâs assets in this possession. For more details, please refer to Note 43 of consolidated financial.

The Statement on Impact of Audit Qualifications as stipulated in regulation 33(3)(d) is placed below:

Qualifications in the Auditorâs Report

The re-constituted Board of Fortis Healthcare Limited, wherein all the Board members have been appointed subsequent to the year-end i.e. March 31, 2018, have dealt with the matters stated in the qualifications in statutory auditorâs report on the Consolidated Financial Results of Fortis Healthcare Limited (âthe Parentâ or âthe Companyâ) and its subsidiaries (the Parent/Company and its subsidiaries together referred to as âthe Groupâ) and its share of profit /(Loss) of its joint ventures and associates for the year ended March 31, 2018 (âthe Consolidated Annual Resultsâ) included in the Statement of Consolidated Financial Results (âthe Consolidated Statementâ) to the extent information was available with them.

(Rs, in Lacs)

Sl. No.	Particulars	Audited Figures (as reported before adjusting for qualifications)	Adjusted Figures (audited figures after adjusting for qualifications)#	Adjusted Figures (audited figures after adjusting for qualifications)$
1	Turnover / Total income	470,054	465,620	Not Determinable
2	Total Expenditure	563,496	559,062	---Do---
3	Net Profit/(Loss)	(93,442)	(93,442)	---Do---
4	Earnings Per Share	(19.46)	(19.46)	---Do---
5	Total Assets	862,169	862,169	---Do---
6	Total Liabilities	330,473	330,473	---Do---
7	Net Worth	531,696	531,696	---Do---
8	Any other financial item(s) (as felt appropriate by the management)	-	-	-

# for Qualification D.2 of the Auditorâs Report.

$ for Qualifications D.1, D.3 to D.7 of the Auditorâs Report.

Qualification D.1 of the Auditorâs Report

1. Details of Audit Qualification: As explained in basis of qualification-1 above

2. Type of Audit Qualification :

Qualified Opinion

3. Frequency of qualification:

4. For Audit Qualification(s) where the impact is quantified by the auditor, Managementâs Views:

Not Applicable

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Managementâs estimation on the impact of audit qualification:

Not quantifiable.

(ii) If management is unable to estimate the impact, reasons for the same:

There were reports in the media and enquiries from, inter alia, the stock exchanges received by the Company about certain inter-corporate loans (âICDsâ) given by Fortis Hospitals Ltd (âFHsLâ) a wholly owned subsidiary of Fortis Healthcare Ltd. The erstwhile Audit and Risk Management Committee of the Company in its meeting held on February 13, 2018 decided to carry out an independent investigation through an external legal firm. Based on the investigation carried out by the external legal firm, and the information available at this stage, all identified / required adjustments/ disclosures arising from the findings in the Investigation Report, have been made. However, the Board will be assessing additional requisite steps to be taken to address various matters identified in the report. Further, various regulatory authorities are currently undertaking their own investigation. Any further adjustments/ disclosures, if required, would be made in the books of account, pursuant to the actions to be taken by the Board and as and when the results of the various investigations are known.

(iii) Auditorsâ Comments on (i) or (ii) above:

In view of the fact that the Board will be assessing additional requisite steps to be taken to address various matters identified in the report and various regulatory authorities are currently undertaking their own investigation, we are unable to comment on the regulatory noncomplianceâs, if any, and the adjustments/ disclosures which may become necessary as a result of further findings of the ongoing or future regulatory / internal investigations and the consequential impact, if any, on the Consolidated Annual Results/the Consolidated Statement for the year ended March 31, 2018. This has resulted in an audit qualification.

Qualification D.2 of the Auditorâs Report

1. Details of Audit Qualification:

As explained in basis of qualification-2 above

2. Type of Audit Qualification :

Qualified Opinion

3. Frequency of qualification:

First time

4. For Audit Qualification(s) where the impact is quantified by the auditor, Managementâs Views:

Fortis Hospitals Ltd (âFHsLâ), a wholly owned subsidiary of Fortis Hospitals Ltd, has recognized interest income aggregating to Rupees 4,434 lacs as at March 31, 2018 on doubtful ICDs and property advance since they were due from the respective parties and for the purpose of including the same in the legal claim on the borrowers/entity. In view of the uncertainty in reliability, the interest accrued has been provided for in the Consolidated Annual Results/the Consolidated Statement.

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Managementâs estimation on the impact of audit qualification:

Not Applicable

(ii) If management is unable to estimate the impact, reasons for the same:

Not Applicable

(iii) Auditorsâ Comments on (i) or (ii) above:

Not Applicable Qualification D.3 of the Auditorâs Report

1. Details of Audit Qualification:

As explained in basis of qualification-3 above

2. Type of Audit Qualification :

Qualified Opinion

3. Frequency of qualification:

4. For Audit Qualification(s) where the impact is quantified by the auditor, Managementâs Views:

Not Applicable

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Managementâs estimation on the impact of audit qualification:

Not quantifiable.

(ii) If management is unable to estimate the impact, reasons for the same:

A third party (to whom the ICDs were assigned by a subsidiary, Fortis Hospitals Limited (âFHsLâ) (âAssigneeâ or âClaimantâ) has filed Civil Suit before the District Court, Delhi in February

2018 against various entities including the Company and have, inter alia, claimed implied ownership of brands âFortisâ, âSRLâ, âLa Femmeâ in addition to certain financial claims and for passing a decree that consequent to a Term Sheet dated December 6, 2017 with a certain party, the Company is liable for claims owned by the Claimant to the certain party.

In additions to the above, the Company has also received four notices from the Claimant claiming financial claims which has been duly responded to by the Company denying any liability whatsoever.

Separately, certain party has alleged rights to invest in the Company. It has also alleged failure on the part of the Company to abide by the aforementioned Term Sheet and has claimed ownership over the brand as well.

Allegations made by the aforesaid party has been duly responded to by the Company denying (i) execution of any binding agreement with the certain party and (ii) liability of any kind whatsoever. Company has also filed caveats before Honâble High Court of Delhi in this regard.

(iii) Auditorsâ Comments on (i) or (ii) above:

As explained in (ii) above, since the matter is sub- judice, the outcome of which is not determinable at this stage, we are unable to comment on the consequential impact, if any, on the Consolidated Annual Results/ the Consolidated Statement for the year ended March 31, 2018. This has resulted in an audit qualification.

Qualification D.4 of the Auditorâs Report

1. Details of Audit Qualification:

As explained in basis of qualification-4 above

2. Type of Audit Qualification:

Qualified Opinion

3. Frequency of qualification:

First time

4. For Audit Qualification(s) where the impact is quantified by the auditor, Managementâs Views:

Not Applicable

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Managementâs estimation on the impact of audit qualification:

Not quantifiable

(ii) If management is unable to estimate the impact, reasons for the same:

a) With regard to Qualification 4 (a) and 4 (b):

Fortis Hospitals Ltd (âFHsLâ), a wholly owned subsidiary of Fortis Healthcare Ltd (âFHLâ) had placed secured short-term investments in the nature of Inter Corporate Deposits (ICDs) with three companies (borrowersâ) aggregating to Rs, 49,414 lacs on July 1, 2017 for a term of 90 days.

There were reports in the media and enquiries from, inter alia, the stock exchanges received by the Company about certain intercorporate loans (âICDsâ) given by a wholly owned subsidiary of the Company. The erstwhile Audit and Risk Management Committee of the Company in its meeting on February 13, 2018 decided to carry out an independent investigation through an external legal firm.

Please refer to Notes 8 and 23 of Consolidated Statement for more details.

b) With regard to Qualification 4(c):

The Company through its subsidiary (i.e. Escort Heart Institute andResearch Centre Limited (âEHIRCLâ)) acquired 71% (approx.) equity interest in Fortis Healthstaff Limited. Subsequently, EHIRCL advanced a loan to Fortis Healthstaff Limited, which was used to repay the outstanding unsecured loan amount of Rs, 794.50 lacs to a promoter group company. Please refer to 23 (d) (viii) of Consolidated Statement for more details.

The Company through its subsidiary (i.e. Fortis Hospitals Ltd (âFHsLâ)) has acquired equity interest in Fortis Emergency Services Limited from a promoter group company. On the day of share purchase transaction, FHsL advanced a loan to Fortis Emergency Services Limited which was used to repay an outstanding unsecured loan amount to the said promoter group company. Please refer to 23 (e) of Consolidated Statement for more details.

(iii) Auditorsâ Comments on (i) or (ii) above:

As explained in (ii) above, with respect to:

a) Granting of loans in the form of ICDs to three borrower companies -we are unable to comment whether aforesaid loans and advances made by the subsidiary on the basis of security have been properly secured or whether they are prejudicial to the interests of the Group. The Group has recognized a provision aggregating to Rupees 44,503 lacs against outstanding ICDs placed (including interest accrued thereon of Rupees 4,260 lacs).

b) Roll-over mechanism devised for granting of ICDs to three borrower companies - we are unable to determine whether these transactions in substance represent book entries or whether they are prejudicial to the interests of the Group as these were simultaneously debited and credited to the bank statement.

c) Acquisition of equity interests in and advancing of loan to Fortis Healthstaff Limited and Fortis Emergency Services Limited - we are unable to determine whether these transactions are prejudicial to the interests of the Group.

The above matters have resulted in audit qualifications.

Qualification D.5 of the Auditorâs Report

1. Details of Audit Qualification:

As explained in basis of qualification-5 above

2. Type of Audit Qualification:

Qualified Opinion

3. Frequency of qualification:

4. For Audit Qualification(s) where the impact is quantified by the auditor, Managementâs Views:

Not Applicable

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Managementâs estimation on the impact of audit qualification:

Not quantifiable

(ii) If management is unable to estimate the impact, reasons for the same:

The related party relationship as required under Ind AS 24 - Related Party Disclosures and the Companies Act, 2013 are as identified by the Management taking into account the findings and limitations in the Investigation Report and the information available with the Management. In the absence of specific declarations from the erstwhile Directors on their compliance with disclosures of related parties, especially considering the substance of the relationship rather than the legal form, the related parties have been identified based on the declarations by the erstwhile Directors and the information available through the known shareholding pattern in the entities. Therefore, there may be additional related parties whose relationship may not have been disclosed to the Company and, not known to the Management.

(iii) Auditorsâ Comments on (i) or (ii) above:

As explained in (ii) above, in the absence of all required information, we are unable to comment on the completeness/ accuracy of the related party relationships as required under Ind AS 24 - Related Party Disclosures, the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) and the compliance with the other applicable regulations and the consequential impact, if any, of the same on Consolidated Annual Results/ the Consolidated Statement for the year ended March 31, 2018. This has resulted in an audit qualification.

Qualification D.6 of the Auditorâs Report

1. Details of Audit Qualification:

As explained in basis of qualification-6 above

2. Type of Audit Qualification :

Qualified Opinion

3. Frequency of qualification:

First time

4. For Audit Qualification(s) where the impact is quantified by the auditor, Managementâs Views:

Not Applicable

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Managementâs estimation on the impact of audit qualification:

Not quantifiable

(ii) If management is unable to estimate the impact, reasons for the same:

The Company through its overseas subsidiaries [i.e. Fortis Asia Healthcare Pte Ltd, Singapore and Fortis Global Healthcare (Mauritius) Limited] made investments in Global Dynamic Opportunity Fund, an overseas funds. Subsequent to the year end, investments held in Global Dynamic Opportunity Fund were sold at a discount of 10%. As at March 31, 2018 the carrying value of the investment in the overseas fund has been recorded at the net recoverable value based on subsequent realization. The consequential foreseeable loss of Rupees 5,510 lacs (the difference between the previously recorded carrying value of the investment and the amount subsequently realized) has been considered in the Consolidated Annual Results.

The investigation report of external legal firm (appointed by the erstwhile Audit and Risk Management Committee of the Company) noted that there were significant fluctuations in the NAV of the investments in overseas funds by the overseas subsidiaries during a short span of time. Further, in the internal correspondence within the Company the investment in the overseas funds have been referred to as related party transactions.

(iii) Auditorsâ Comments on (i) or (ii) above:

As explained in (ii) above, in absence of sufficient information available with the Group demonstrating the reasonability of the discount recorded as provision for foreseeable loss in the value of the investment in the overseas fund, we are unable to comment on the same. This has resulted in an audit qualification.

Qualification D.7 of the Auditorâs Report

1. Details of Audit Qualification:

As explained in basis of qualification-7 above

2. Type of Audit Qualification :

Qualified Opinion

3. Frequency of qualification:

First time

4. For Audit Qualification(s) where the impact is quantified by the auditor, Managementâs Views:

Not Applicable

5. For Audit Qualification(s) where the impact is not quantified by the auditor:

(i) Managementâs estimation on the impact of audit qualification:

Not quantifiable.

(ii) If management is unable to estimate the impact, reasons for the same:

The Company having considered all necessary facts and taking into account legal advice, has decided to treat as

non-Est the Letter of Appointment dated September 27, 2016, as amended, (âLoAâ) issued to the erstwhile Executive Chairman of the Company in relation to his role as âLead: Strategic Initiativesâ in the Strategy Function. Basis legal advice taken by the Company, the payments made to him under this LoA would be considered to be covered under the limits of section 197 of the Companies Act, 2013. The Company is in the process of taking suitable legal measures to recover the payments made to him under the LoA as also to recover all the Companyâs assets in his possession. The Company has sent a letter to the erstwhile Executive Chairman seeking refund of the excess amounts paid to him.

In view of this, the amount paid to him under the aforesaid LOA and certain additional amount reimbursed in relation to expenses incurred (in excess of the amounts approved by the Central Government under section 197 of the Companies Act, 2013 for remuneration & other reimbursements), aggregating to Rupees 2,002 lacs is shown as recoverable in the Consolidated Annual Results for the year ended March 31, 2018. However, considering the uncertainty involved on recoverability of the said amounts a provision of Rupees 2,002 lacs has been made.

(iii) Auditorsâ Comments on (i) or (ii) above:

As explained in (ii) above, due the nature of dispute and uncertainty involved, we are unable to comment on the tenability of the refund claim, the provision made for the uncertainty in recovery of the amounts, the recovery of the assets in possession of the erstwhile Director and other noncomplianceâs, if any, with the applicable regulations and the consequential impact, if any, of the same on Consolidated Annual Results/the Consolidated Statement for the year ended March 31, 2018. This has resulted in an audit qualification.

- Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) 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 2017-18 at a remuneration of '' 3 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 Memberâs ratification for the remuneration payable to M/s Jitender, Navneet & Co., Cost Auditors is included in the Notice convening the Annual General Meeting. Further, in terms of Companies (Accounts) Rules, 2014, it is confirmed that maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is applicable on your Company and accordingly such accounts and records are properly made and maintained .

- 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 & Associates, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Company has complied with the provisions of Secretarial Standards, to the extent feasible. The Report of the Secretarial Audit Report is annexed herewith as âAnnexure IIâ. The adverse remarks and management response to the same is as given below:

S. No.	Remarks by auditors	Management Response
1	The financial results for the quarter(s) ended on September 30, 2017, December 31, 2017 and March 31, 2018, were not submitted with Stock Exchange(s) within the specified period as required under Regulation 33 of SEBI LODR	Due to non-completion of audit coupled with ongoing investigations, the financial results for the quarter(s) ended on September 30, 2017, December 31, 2017 and March 31, 2018 were submitted after the stipulated timelines.
2	Reports on transfer of physical shares for the half year(s) ended on September 30, 2017 and March 31, 2018 were placed before the Board of Directors of the Company but not reviewed as required under Regulation 40 of SEBI LODR within the stipulated time period	Due to paucity of time, the reports on transfer of physical shares for the half year(s) ended on September 30, 2017 and March 31, 2018 were not discussed at the scheduled board meetings. The same were duly noted in subsequent board meetings.
3	Reports on corporate governance for the quarter(s) ended on September 30, 2017, December 31, 2017 and March 31, 2018, were placed before the Board of Directors of the Company but not reviewed as required under Regulation 27 of SEBI LODR within the stipulated time period	Due to paucity of time, the reports on corporate governance for the quarter(s) ended on September 30, 2017, December 31, 2017 and March 31, 2018, were not discussed at the scheduled board meetings. The same were duly noted in subsequent board meetings.
4	Compliance reports pertaining to all laws applicable to the Company, prepared by the Company as well as steps taken by the Company to rectify instances of non-compliances, for the quarter(s) ended on September 30, 2017, December 31, 2017 and March 31, 2018, were not reviewed by the Board of Directors of the Company periodically	Due to paucity of time, the compliance reports were not discussed at the scheduled board meetings. The same were duly noted in subsequent board meetings.

S. No.	Remarks by auditors	Management Response
5	Statements detailing the number of investor complaints for the quarter(s) ended on September 30, 2017, December 31, 2017 and March 31, 2018 were placed before the Board of Directors of the Company but not reviewed as required under Regulation 13 of SEBI LODR within the stipulated time period	Due to paucity of time, the Statements detailing the number of investor complaints for the quarter(s) ended on September 30, 2017, December 31, 2017 and March 31, 2018 were not discussed at the scheduled board meetings. The same were duly noted in subsequent board meetings.
6	There was gap of more than one hundred and twenty days between the two meetings of the Audit Committee held on August 03, 2017 and February 13, 2018, which is not in compliance with the requirements of Regulation 18 of SEBI LODR	The Audit and Risk Management Committee was not held during the quarter ended December 31, 2017, due to non-finalisation of audit and the financial results for the quarter ended September 30, 2017. The agenda and complete notes for the same were duly circulated.
7	As on March 31, 2018, the Nomination and Remuneration Committee does not comprise of at least three members as per the requirements of Section 178 of the Act and Regulation 19 of SEBI LODR	The Nomination and Remuneration as on February 13, 2018 was re-constituted by the Board to include Lt. Gen. Tejinder Singh Shergill (Chairperson); Ms. Joji Sekhon Gill; Dr. Brian William Tempest; and Dr. Preetinder Singh Joshi. Post the resignations tendered by Ms. Joji Sekhon Gill and Dr. Preetinder Singh Joshi in March, 2018, the board as on March 31, 2018 was very unstable due to frequent changes in its composition. The Board re-constituted the Committee on April 5, 2018, to include Lt. Gen. Tejinder Singh Shergill (Chairperson); Dr. Brian William Tempest; and Mr. Harpal Singh as the Committee members.
8	The Board of Directors has not made performance evaluation of the Board as a whole, its Committees and Individual Directors, as per the requirements of Section 134(3)(p) of the Act read with Regulation as per the requirements of Regulation 17(10) of SEBI LODR	The process of board evaluation of the Company was kicked off in February, 2018 and thereafter the self-evaluation forms were obtained from the directors as available and the process-co-coordinators carried out the one-on-one discussion. However, due to the complete re-constitution of the board, no evaluation of the performance by the Board, Nomination and Remuneration Committee or Independent Directors was carried out and thereby no report on the same was placed for FY 2017-18. For the same reason no meeting of Independent Directors was held during the year.
9	Separate meeting of Independent Directorsâ was not held during the financial year, as per the requirements of Regulation 25 of SEBI LODR and Schedule IV to the Act
10	The remuneration of '' 20,02,39,000/- paid to the erstwhile Executive Chairman in relation to his role as âLead: Strategic Initiativesâ, in the Strategy Function, was in excess of the limits approved by the Central Government as under Section 197 of the Act	The Company had sought legal advice on the payments made to Mr. Malvinder Mohan Singh, Executive Chairman in his capacity as Lead- Strategic Initiatives and basis the same, it was suggested that any payment made to him in any capacity would be considered to be covered under the limits of section 197 of the Companies Act, 2013. The Company is in the process of taking suitable legal measures to recover the payments made to him
11	The Company was having layers of subsidiaries as of March 31, 2018 for which it was required to file Form CRL-1	The Company had 3 layers of subsidiaries as of March 31, 2018 and is process of filing Form CRL-1 in terms of the requirements of Companies Act, 2013 (âActâ). However, the 3^rd layer of subsidiary has been divested during the current year and thereby the Company is in compliance of applicable provisions of the Act as on the date of the report.

- 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 2017-18. Accordingly, M/s. KPMG & Genpact Enterprise Risk Consulting LLP were engaged to perform Internal Audit for the Company/its subsidiaries.

Besides, the details of frauds as mentioned in the Auditors Report, if any, as per the requirement of Companies Auditor Report Order (CARO), Rules, 2016, there was no fraud reported by the above stated auditors during the year under review.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

During FY 17-18, there was no significant material order passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations. Updates w.r.t. ongoing regulatory investigations (viz. SEBI and SFIO) and other legal matters are detailed in the notes to financial statement for FY 2017-18.

CAPITAL STRUCTURE/STOCK OPTION

The Company currently manages its stock options through âEmployee Stock Option Plan 2007â and âEmployee Stock Option Plan 2011â (âSchemesâ) 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 '' 10 each of the Company. During the year under review, 25,00,000 options were granted by the Company. Disclosure pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 for the Year ended March 31, 2018 is available at http://cdn. fortishealthcare.com/ESOPdisclosure2017-18.pdf and forms part of this Directorsâ Report.

During the year under review, under the terms of the âEmployee Stock Option Plan 2007â, 22,600 stock options were exercised and under the terms of âEmployee Stock Option Scheme 2011â 9,07,000 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

The particulars required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of âThe Companies (Accounts) Rules, 2014â, 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 is as given below:

Total Foreign Exchange Earned and Used (Based on Standalone Financial Statements)

Particulars	Amount
	(in '' Crore)
Foreign Exchange earned in	15.80
terms of Actual Inflows
Foreign Exchange outgo in	17.48
terms of Actual Outflows

Note: Earning and expenditure in foreign currency is on accrual basis.

CORPORATE SOCIAL RESPONSIBILITY - OUR JOURNEY THROUGH THE PAST YEAR

As a responsible corporate citizen and a 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 programmes 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 programmes 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.

The CSR initiatives for Fortis Healthcare Limited are led through Fortis Charitable Foundation, its designated CSR vehicle. The work of the Foundation is supported and executed by two entities: The Fortis Charitable Foundation (FCF)- a Trust set up in 2005 and The Fortis Foundation (FF)- a Section 8 Company set up in 2013.

These entities work in a collaborative and inclusive manner not only to align and synergise the social enterprise work of the group companies but also to expand their circle of partnerships with Government, Non-Government Organizations (NGOs), other corporate and individuals.

Working through a dedicated team of employees and volunteers, their work focuses on three programmes that work towards:

- The health and well-being of the Mother and Child (AANCHAL)

- The provision of timely medical support in the event of a disaster and enabling Charitable Medical Infrastructure (SEWA)

- Creating and supporting open platforms for Healthcare Information (SAVERA)

Fortis Healthcare Limited has chosen to support the SEWA and SAVERA program. In the coming years the Company intends to include other Special Purpose Vehicles (including Fortis CSR Foundation) for sustainability and scalability of the project to carry out CSR activities.

ABOUT SAVERA PROGRAM

SAVERA seeks to provide a platform to initiate and share research to create awareness on critical health issues and work towards driving opinion & public policy around viable options.

SAVERA has created a credible knowledge repository of disease related information under an open platform for sharing.

SAVERA focuses on:

- Anti-Tobacco Campaign

- First Aid & Basic Life Support Training

- E-communication portal for Health Information -www.gyankaari.com

ANTI- TOBACCO CAMPAIGN

As part of the anti-tobacco campaign, Fortis Foundation has collaborated with Sambandh Health Foundation to increase awareness about COTPA (Cigarettes and Other Tobacco Products Act).

Over 33,700 challans were issued and over 9500 police and education officials were sensitized about COTPA and its enforcement.

FIRST AID/BLS TRAINING

As part of this, Fortis Foundation has collaborated with Save Life Foundation to provide Basic Trauma Life Support (BTLS) training to police personnel in Delhi/NCR as they are the first responder in emergency situations. Have trained over 110 police personnel. The volunteers are now trained to save lives in case of an emergency.

GYANKAARI

The Bi-lingual Health Information portal - www. gyankaari.com was launched in December 2017. The open platform contains doctor-verified information about diseases, causes, symptoms, prevention, myths and possible treatment options.

HEALTH INFORMATION PUBLICATIONS

Over the past year, awareness has been created on health, hygiene and nutrition by distributing over 3,51,500 illustrative books and pamphlets on preventive and remedial health information. The information has been distributed across 25 Non-Government Organisations and 31 hospitals pan India.

ABOUT DISASTER INITIATIVE OF SEWA PROGRAM

India has been historically vulnerable to disasters with floods, cyclones, earthquakes and landslides being a recurrent phenomenon. In the event of a disaster, thousands of lives are affected, and livelihoods worth millions are destroyed. The urgent need in such situations is access to medical care.

SEWA is a Disaster Relief Initiative that aims to provide emergency medical relief services in an organised and time sensitive manner to people affected by disasters. SEWAâs core commitment is to support the governmentâs efforts in providing medical relief during a calamity.

Fortis Healthcare Ltd. in FY 17-18 structured its volunteer base to provide medical relief services in times of disaster situations.

Particulars pursuant to Clause O of Sub-Section 3 of Section 134 of The Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is given in âAnnexure Vâ.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company as on date comprises of three non-executive independent directors. Pursuant to Sections 149 and 152 of the Companies Act, 2013, no director is liable to retire by rotation at the ensuing Annual General Meeting.

Further, the following changes took place in the directorship during the Financial Year 2017-18 and till the date of this report:

a) Ms. Lynette Joy Hepburn Brown resigned from the position of non-executive independent director w.e.f. April 11, 2017 due to personal reasons;

b) Mr. Ravi Umesh Mehrotra resigned from the position of non-executive director w.e.f. April 12, 2017due to personal reasons;

c) Mr. Sunil Naraindas Godhwani vacated his office from the position of non-executive director w.e.f. August

4, 2017 in terms of the provisions of Section 167 of Companies Act, 2013;

d) Ms. Shradha Suri Marwah resigned from the position of non-executive independent director of the Company w.e.f. November 14, 2017due to personal reasons;

e) On February 8, 2018, Mr. Malvinder Mohan Singh, Executive Chairman, and Dr. Shivinder Mohan Singh, Non-Executive Vice Chairman, tendered their resignation from the directorship of the Company, due to personal reasons;

f) Lt. Gen. Tejinder Singh Shergill was appointed as Additional Independent Director on the Boards of the Company w.e.f. February 12, 2018;

g) Ms. Sabina Vaisoha was appointed as Additional Independent Director on the Boards of the Company w.e.f. March 27, 2018;

h) Ms. Joji Sekhon Gill, Dr. Preetinder Singh Joshi and Mr. Pradeep Ratilal Raniga resigned from their directorships in the Company w.e.f. March 7, 19 and 22, 2018, respectively, due to personal reasons;

i) Mr. Rohit Bhasin was appointed as an additional independent director in the Company on April 19, 2018. He subsequently resigned on June 26, 2018;

j) Lt. Gen. Tejinder Singh Shergill was regularised as Independent Director by the shareholders w.e.f. May 5, 2018;

k) Ms. Suvalaxmi Chakraborty, Mr. Ravi Rajagopal and Mr. Indrajit Banerjee were appointed as NonExecutive Independent Directors of the Company by the Board on April 27, 2018 and their appointments were regularized by the members of the Company in the extra-ordinary general meeting (âEGMâ) of the Company held on May 22, 2018. At the same EGM, Dr. Brian William Tempest disassociated from his position on the basis of the resolution passed by the members;

l) Mr. Harpal Singh, Lt. Gen. Tejinder Singh Shergill and Ms. Sabina Vaisoha resigned from directorship of the Company w.e.f. May 20, 2018;

m) Mr. Ravi Rajagopal was appointed as Chairman of the Board with effect from June 1, 2018.

As such, the re-constituted Board of Directors comprises the following directors as on date:

i. Mr. Ravi Rajagopal - Chairman & Independent Director;

ii. Mr. Indrajit Banerjee - Independent Director; and

iii. Ms. Suvalaxmi Chakraborty - Independent Director

During the Financial Year 2017-18, eight 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. Bhavdeep Singh	Chief Executive Officer
Mr. Gagandeep Singh Bedi	Chief Financial Officer
Mr. Rahul Ranjan	Company Secretary

Disclosures regarding the following are mentioned in report on Corporate Governance forming part of this report.

1. Composition of Committee(s) of the Board of Director and other details;

2. Details of establishment of Vigil Mechanism;

3. Details of remuneration paid to all the Directors including Stock options; and

S. No.	Process	Remarks	Criteria for Evaluation (including Independent Directors)
1.	Individual SelfAssessment	Self-evaluation forms were shared and completed by the Directors and submitted to Process Co-ordinators.	This includes Members Selection and Induction Process, Knowledge, skills, Diligence, participation, Leadership skills and Personnel attributes.
2.	One to One discussion	Process Coordinators, as recommended by Nomination and Remuneration Committee, were authorized to interact with each Board member to assess performance, invite direct feedback and seek inputs to identify opportunities for improvement.	This includes Board focus (Strategic inputs), Board Meeting Management, Board Effectiveness Management Engagement and addressing of follow up requests.
3.	Evaluation by the Board, Nomination and Remuneration Committee and of Independent Directors	A compilation of the individual self assessments and one to one discussions were required to be placed at the meetings of the Nomination and Remuneration Committee (NRC), the Independent Directorâs (IDâs) and the Board of Directors (BoD) for them to review collectively and include as additional feedback to the formal process completed in the meetings.	This includes demonstration of integrity, commitment, attendance at the meetings, contribution and participation, professionalism, contribution while developing Annual Operating Plans, demonstration of roles and responsibilities, review of high risk issues & grievance redressal mechanism, succession planning, working of Board Committees etc.
4.	Final recording and reporting	Based on the above, a final report on Board Evaluation 2017-18 was required to be collated, presented and tabled at a meeting of the Board of Directors.	NA

4. Commission received by Managing Director and/or Whole Time Director; if any.

BOARD EVALUATION

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations,2015,theBoard and the resp ective committees are required to carry out performance evaluation of the Board as a body, the Directors individually, Chairman as well as that of its Committees.

The following process of evaluation was approved by the Nomination and Remuneration Committee and the Board of Directors:

The process of board evaluation of the Company was kicked off in February, 2018 and thereafter the self-evaluation forms were obtained from the directors as available and the process-co-ordinators carried out the one-on-one discussion. However, due to the complete reconstitution of the board, no evaluation of the performance by the Board, Nomination and Remuneration Committee or Independent Directors was carried out and thereby no report on the same was placed for FY 2017-18.

The Company endeavors to comply with the law both in words and spirit and the necessary evaluation will henceforth be carried out as done in the past years.

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 2017-18

Name of	Remuneration	Median	Ratio
the	of Director	Remuneration
Director	('' in crore)	of employees ('' in crore)
	NIL (Refer Note 1)

Note 1- Mr. Malvinder Mohan Singh, Executive Chairman did not draw any remuneration in his capacity of Executive Director during the FY 201718. However, in furtherance to the shareholderâs approval as accorded on September 27, 2016 and that of Board/Committees in November, 2016, Mr. Malvinder Mohan Singh was appointed as Lead-Strategic Initiatives for a period of five years w.e.f. October 1, 2016 at a remuneration of Rs, 12 crore p.a. Accordingly he was paid a remuneration of Rs, 11 crore (approx.) during the FY 2017-18. Further, post the resignation tendered by Mr. Malvinder Mohan Singh as Executive Chairman w.e.f. February 8, 2018, he continued in his capacity as Lead- Strategic Initiatives of the Company.

In light of pending litigations and investigations, the salary and reimbursements payment to Mr. Singh was kept under suspension. The Company sought an external legal opinion on way-forward activities. Having considered all necessary facts and taking into account external legal advice, the Board decided to treat as non est the Letter of Appointment dated September 27, 2016, as amended, (âLoAâ) issued to the erstwhile Executive Chairman of the Company in relation to his role as âLead: Strategic Initiativesâ in the Strategy Function. Basis legal advice taken by the Company that the payments made to him under this LOA would be considered to be covered under the limits of Section 197 of the Companies Act, 2013, the Company is in the process of taking suitable legal measures to recover the payments made to him under the LoA as also to recover all the Companyâs assets in his possession. Accordingly, the employment of Mr. Singh as Lead- Strategic Initiatives stood terminated with effect from June 27, 2018 .

(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	Refer Note 1 above
*Mr. Bhavdeep Singh	Chief Executive Officer	10%**
Mr. Gagandeep Singh Bedi	Chief Financial Officer	13%**
Mr. Rahul Ranjan	Company Secretary	14%**

*It is hereby clarified that the salary reported in March 2016 (FY 15-16) of Rs, 1115. 40 lacs included the one-time provision in books made of Rs, 723.41 lacs. This amount was paid in FY 16-17 and was also included in the salary reported in March 17 (FY 16-17). Therefore, there was a double reporting of the same number of Rs, 723.41 lacs in FY 15-16 and FY 16-17.

**% increase in remuneration is effective 1st April

2017

(c) The percentage increase in the median remuneration of employees in the financial year is 8% (8.9% in the last year) (Median remuneration increase of the employees is eligible for appraisal as on 1^st April 2017)

(d) The number of permanent employees on the rolls of Company is 2528 as on March 31, 2018.

Particulars		For the Financial Year 2017-18
(A)	Average percentile increase already made in the salaries of employees other than the managerial personnel (KMPs)	6.4%
(B)	Percentile increase in the managerial remuneration	10.7%
Comparison of (A) and (B)
Justification		6.4% is the company average excluding KMPs. The increment band for eligible employees was 2% to 17%.
Any exceptional circumstances for increase in the managerial remuneration		NA

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

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

REMUNERATION POLICY

Policy and changes, if any, are stated in the Corporate Governance Report.

The Company has from time to time familiarised the Board of Directors with the Companyâs 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/0.35155800_1498650624_board-of-directors-governance-standards.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 Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the Members at the Registered Office and/or Corporate Office of the Company during business hours between 10.00 am to 12.00 noon on working days (except Saturday) of the Company 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

There are a few materially significant Related Party Transactions made by the Company with other related parties which forms 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 Obligations & Disclosure Requirements) Regulations, 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 review on a quarterly basis.

The Company has developed a Related Party Transactions Framework and Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website and the same is available at the following link http:// cdn.fortishealthcare.com/Related-Party-Transactions-Framework-Document.pdf

None of the current 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 and as disclosed in this Annual Report.

RISK MANAGEMENT POLICY

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 (âActâ) and Rules made there under, your Company has constituted Internal Complaints Committees (ICC). During the Financial Year 2017-18, the Company has received 6 complaints on sexual harassment and these complaints have been resolved with appropriate action taken and hence no complaint is pending as on March 31, 2018. The same may also be read in terms of Companies (Accounts) Rules, 2014.

DISCLOSURE REQUIREMENTS

As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Corporate Governance

Report with Auditorsâ certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, 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 âFortis Code of Conductâ is enclosed with Corporate Governance Report.

DIRECTORSâ RESPONSIBILITY STATEMENT

(a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures there from;

(b) we have assessed the selection and application of accounting policies for their consistent application and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year and of the loss of the Company for the Financial Year ended March 31, 2018;

(c) except for the findings of the Investigation Report, including matters on internal control described in Note 38 in the Notes to the Consolidated Financial Statements and Note 30 in the notes to the Standalone Financial Statements and our inability at this juncture to make a determination on whether a fraud has occurred on the Company considering the limitations on the information available to Luthra and their qualifications and disclaimers as described in their investigation report, proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Statements have been prepared on a going concern basis for the reasons stated in Note 41 in the Notes to the Consolidated Financial Statements and Note 33 in the notes to the Standalone Financial Statements;

(e) except for certain systemic and control lapses identified in the Investigation Report as described in Note 38 in the Notes to the Consolidated Financial Statements and Note 30 in the notes to the Standalone Financial Statements, proper internal financial controls have been laid down and that such internal financial controls are adequate and are operating effectively;

(f) except for the matters on related parties and managerial remuneration described in Note 9(4) in the Notes to the Consolidated Financial Statements and Note 6(5) in the notes to the Standalone Financial Statements and Note 43 in the Notes to the Consolidated Financial Statements and Note 35 in the notes to the Standalone Financial Statements in the Notes to the Financial Statements and certain systemic and control lapses, as detailed in Note 38 in the Notes to the Consolidated Financial Statements and Note 30 in the notes to the Standalone Financial Statements, there are proper systems in place to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

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.

By Order of the Board of Directors

For Fortis Healthcare Limited

Sd/-

Date: August 14, 2018 Ravi Rajagopal

Place: Gurugram Chairman

Mar 31, 2017

Dear Members,

Your Directors have pleasure in presenting here the Twenty First Annual Report of your Company along with the Audited Standalone and Consolidated Financial Accounts and the Auditorsâ Report thereon for the Year ended March 31, 2017.

Directorsâ

Report

FINANCIAL RESULTS

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

[Rs, in Million]

Particulars	Consolidated
	Year ended March 31, 2017	Year ended March 31, 2016
Continuing Operations
Operating Income	457,371.46	419,888.65
Other Income	16,600.31	15,349.51
Total Income	473,971.77	435,238.16
Total Expenditure	422,082.99	399,487.22
Operating Profit	51,888.78	35,750.94
Less: Finance Charges, Depreciation & Amortization	45,161.50	35,814.67
Loss before exceptional items and tax	6,727.28	(63.73)
Exceptional items	(164.28)	(4,013.51)
Loss before tax	6,563.00	(4,077.24)
Less: Tax Expenses	7,240.04	(801.56)
Net Profit for the year	677.04	(3,275.68)
Share in profits of associate companies	48,605.94	7,247.23
Profit/ (Loss) for the year from continuing operations (A) Discontinuing Operations	47,928.89	3,971.55
Profit/ (Loss) before tax from discontinuing operations		232.50
Tax expense of discontinuing operations		26.68
Profit/ (Loss) after tax and before minority interest from discontinuing operations		205.82

Particulars	Consolidated
	Year ended March 31, 2017	Year ended March 31, 2016
Share in profits/ (losses) of associate companies	-	-
Profit for the year from discontinuing operations (B)	-	205.82
Profit for the year (A B) Profit for the year attributable to:	47,928.89	4,177.36
Owners of the Company	42,166.47	1,842.39
Non-controlling interests	5,762.42	2,334.98
Profit for the year before other comprehensive income	47,928.89	4,177.37
Other comprehensive income	(2,734.25)	(5,074.11)
Total comprehensive income Total comprehensive income for the year attributable to:	45,194.64	(896.74)
Owners of the Company	39,456.80	(3,226.82)
Non-controlling interests	5,737.84	2,330.08
Total comprehensive income	45,194.64	(896.74)

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

[Rs, in Lacs,

Particulars	Standalone
	Year ended March 31, 2017	Year ended March 31, 2016
Operating Income	64,511.50	61,159.16
Other Income	16,919.80	18,468.82
Total Income	81,431.30	79,627.98
Total Expenditure	79,164.23	73,718.07
Operating Profit	2,267.07	5,909.91
Less: Finance Charges, Depreciation & Amortization	13,297.63	9,054.21
Loss before exceptional items and tax	(11,030.56)	(3,144.30)
Exceptional items	(373.28)	(1,821.86)
Loss before tax	(11,403.85)	(4,966.16)
Less: Tax Expenses	(3,933.95)	(945.65)
Net Profit for the year	(7,469.90)	(4,020.51)
Other comprehensive income	106.67	188.98
Total comprehensive income	(7,363.22)	(3,831.53)

STATE OF COMPANYâS AFFAIR, OPERATING RESULTS AND PROFITS

For the Financial Year 2016-17, the Company recorded audited consolidated operating income from continuing operations of Rs, 45,737 Million, a growth of 9% over the previous year operating income of Rs, 41,988 Million.

Consolidated total income (including other income) from the operations for the Financial Year 2016-17 was at Rs, 47,397 Million compared to Rs, 43,524 Million in the previous year. (Operating profit from the continuing operations for the year stood at Rs, 3,529 Million compared to Rs, 2,040 Million in the previous year.) The Net Profit after Tax but for the continuing operations stood at Rs, 4,793 Million (including onetime gain of associate profits for Rs, 422 Million) as against Rs, 398 Million for the corresponding previous year. The Net Profit after Tax for the company (including both continuing and discontinuing operations) stood at Rs, 4,793 Million as against Rs, 418 Million for the corresponding 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 persistent 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 organization.

As of March 31, 2017, the healthcare verticals of the Company primarily comprise day care specialty, diagnostics and tertiary and quaternary care. As of March 31, 2017, the Company had a network of 45 healthcare facilities (including projects under development), with approximately 4,800 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 41 healthcare facilities, including 32 operating facilities, 3 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 356 laboratories including 183 self-operated laboratories, 120 laboratories inside Hospitals including 27 labs located in Fortis healthcare facilities, 4 wellness centres and 5 international laboratories. It also has over 5,245 collection points, which includes 92 collection centers that are owned and 69 collection centres at International locations.

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 were 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 have not recommended any dividend for the Financial Year 201617. Accordingly, there has been no transfer to general reserves.

The Company has formulated Dividend Policy in terms of SEBI Circular No. SEBI/LAD-NRO/6N/2016-17/008 and the same is available on the website of the Company www.fortishealthcare.com.

MATERIAL CHANGES

The following are the material changes and commitments, affecting the financial position of the company which have occurred between the end of the financial year 2016-17 and the date of the report:

- Approval of the shareholders and Reserve Bank of India were obtained for permitting the registered FIIs to make investment in the equity shares of the Company up to an aggregate limit of 74% (Seventy Four Percent) of the paid-up equity share capital of the Company;

- Scheme of Amalgamation and Demerger â The Board of Directors of your Company at its meeting on August 19, 2016 approved a composite scheme of arrangement and amalgamation between your Company, Fortis Malar Hospitals Limited (âFMHLâ), SRL Limited (âSRLâ) and their respective shareholders and creditors (âSchemeâ) for (i) the transfer of the undertaking, business and operations of FMHL including assets and liabilities pertaining to the hospital business, as identified in the Scheme (âTransferred Undertakingâ), as a going concern, by way of slump sale, from FMHL to your Company, in lieu of payment of a lumpsum consideration by your Company to FMHL (âBusiness Transferâ);

(ii) the transfer by way of a demerger of the undertakings, business, activities and operations of your Company, pertaining exclusively to the diagnostics business ofyour Company as identified in the Scheme (âDemerged Undertakingâ) to FMHL, and consequent issue of equity shares by FMHL to shareholders of your Company (âDemergerâ);

(iii) the amalgamation of all the undertakings and entire business of SRL with FMHL and dissolution of SRL without winding up; the consequent issue of equity shares by FMHL to the shareholders of SRL and the cancellation of equity shares of SRL held by FMHL (âAmalgamationâ) and various other matters consequential or otherwise integrally connected therewith, including the reduction of the securities premium account of your Company and the reorganization of the share capital of FMHL pursuant to the provisions of Sections 230 to 232 of the Companies Act, 2013 (âActâ) (corresponding to Sections 391-394 of the Companies Act, 1956 read with Section 52 and Section 66 of the Act (corresponding to Sections 100 to 103 of the Companies Act, 1956), Section 2(1B) of the Income Tax Act, 1961, and any other applicable provisions of the Act or Companies Act, 1956.

The Scheme has also received the approval of the Competition Commission of India on October 14, 2016. The BSE Limited and the National Stock Exchange of India Limited have conveyed their no adverse observations/no objections to the Scheme vide letters dated November 11, 2016 and November 15, 2016 respectively. Subsequently, the Scheme has also been approved by the creditors and equity shareholders of your Company on April 26, 2017 and April 27, 2017 respectively. The Scheme as on the cut-off date was pending with the National Company Law Tribunal, Chandigarh. The Scheme will be made effective by the Board of Directors of your Company and those of FMHL and SRL after receiving the remaining approvals including that of the National Company Law Tribunal, Chandigarh, post sanction approval of the Securities and Exchange Board of India etc;

- The Company has acquired 15% shareholding in M/s. Hiranandani Healthcare Private Limited, a subsidiary company from M/s. Fortis Healthcare Holdings Private Limited, a promoter company w.e.f. July 28, 2017 at a consideration of Rs, 61 crore;

- M/s. Fortis Hospitals Limited has acquired 51% shareholding in M/s. Fortis Emergency Services Limited, its associate company from M/s. Fortis Healthcare Holdings Private Limited, a group company w.e.f. July 28, 2017 at a consideration of Rs, 25500;

- M/s. Escorts Heart Institute and Research Centre Limited has acquired 71% shareholding in M/s. Fortis HealthStaff Limited, its subsidiary company from M/s. Fortis Healthcare Holdings Private Limited and M/s. RHC Holding Private Limited, group companies w.e.f. July 28, 2017 at an aggregate consideration of Rs, 3,46,000.

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:

- M/s. Fortis Healthcare International Limited transferred its entire shareholding in M/s. Fortis Global Healthcare (Mauritius) Limited to M/s. Fortis Hospitals Limited w.e.f. October 4, 2016 at a consideration of USD 4,430,723;

- M/s. Fortis Healthcare International Pte. Limited transferred its entire stake in M/s. SRL Diagnostics FZ-LLC to M/s. SRL Limited w.e.f. June 30, 2016 at a consideration of USD 2 million;

- The Company acquired 51% economic interest in Fortis Hospotel Limited (FHTL) through acquisition of 44,39,040 Compulsory Convertible Debentures of Rs, 1000 each issued by FHTL, representing 51% of the total CCDs issued by FHTL to Fortis Global Healthcare Infrastructure Pte Ltd, at a total consideration of upto Rs, 1,099.98 crores w.e.f. October 13, 2016; and

- Fortis Healthcare Management (East) Limited became 100% subsidiary of Fortis Hospitals Limited w.e.f. February 14, 2017.

In terms of the said policy, Fortis Hospitals Limited (FHsL) and SRL Limited (SRL) are considered as Material Subsidiary(ies) 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 Boards 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. 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/GUARANTEES

Particulars of Loans/Advances/Investments/guarantees given and outstanding during the Financial Year 2016-17 are mentioned in Notes to Financial Statements.

PUBLIC DEPOSITS

AUDITORS - Statutory Auditors

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 âMatter of Emphasisâ, hence no comments in this regard have been offered by your Board of Directors:

a) Notes 14(A), 14(B), 14(C), 14(D) and 14(E) to the financial statements relating to outcome of income tax assessments; arbitrations with regard to termination of certain land leases allotted by Delhi Development Authority (DDA) and matter related to non-compliance with the order of the Honourable High Court of Delhi in relation to provision of free treatment/ beds to poor against one of the subsidiaries (âEscorts Heart Institute and Research Centre Limitedâ).

b) Note 14(G) to the financial statements, regarding matter relating to termination of Hospital lease agreement of one of its subsidiaries (Hiranandani Healthcare Private Limited) by Navi Mumbai Municipal Corporation (âNMMCâ).

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) 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 2016-17 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 Memberâs ratification for the remuneration payable to M/s Jitender, Navneet & Co., Cost Auditors is included in 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 & Associates, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as âAnnexure IIâ. There are no adverse remarks in the sand Report.

- 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 2016-17. Accordingly, M/s. KPMG and E & Y, LLP were engaged to perform Internal Audit for the Company/its subsidiaries.

CAPITAL STRUCTURE/STOCK OPTION

The Company currently manages its stock options through âEmployee Stock Option Plan 2007â and âEmployee Stock Option Plan 2011â (âSchemesâ) 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 '' 10 each of the Company. During the year under review, no options were granted by the Company. Disclosure pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 for the Year ended March 31, 2017 is available at http://cdn. fortishealthcare.com/0.13412400 1501906982 ESOP-Disclosure-FY-2016-17.pdf and forms part of this Directorsâ Report.

During the year under review, under the terms of the âEmployee Stock Option Plan 2007â, 205100 stock options were exercised and under the terms of âEmployee Stock Option Scheme 2011â 631000 stock options were exercised.

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.

Further, during the year under review, the Company received Conversion Notice on November 28, 2016 from DB Trustees (Hong Kong) Limited (the trustees) for conversion of entire FCCBs held by Standard Chartered Private Equity (Mauritius) III Limited into equity shares equivalent to 1,80,70,650 equity shares of '' 10 each @ '' 99.09 per share. Also, the Company received Conversion Notice from International Finance Corporation on January 23, 2017, for conversion of entire FCCBs into equity shares equivalent to 35,690,887 equity shares of '' 10 each @ '' 99.09 per share. Accordingly, the requisite number of equity shares were issued to the investors. As on date, there is no outstanding FCCBs standing in the Books of the 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

CORPORATE SOCIAL RESPONSIBILITY - OUR JOURNEY THROUGH THE PAST YEAR

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.

The CSR initiatives for Fortis Healthcare Limited are led through the Fortis Charitable Foundation its designated CSR vehicle.

The work of the Foundation is supported and executed by two entities.

The Fortis Charitable Foundation (FCF) - a Trust set up in 2005 and The Fortis Foundation (FF) - a Section 8 Company set up in 2013.

These entities work in a collaborative and inclusive manner not only to align and synergise the social enterprise work of the group companies but to expand their circle of partnerships with Government, Non Government Organizations (NGOs), other corporate and individuals.

Working through a dedicated team of employees and volunteers their work focuses on 3 programs that work towards:

0 The Health and Well-Being of the Mother and Child (AANCHAL)

0 The provision of Timely Medical Support in the event of a disaster and enabling Charitable Medical Infrastructure (SEWA)

0 Creating and Supporting open platforms for Healthcare Information (SAVERA)

Fortis Healthcare Limited has chosen to support the SEWA program (in FY 2015-16) and SAVERA program (in FY 2015-16 and FY 2016-17).

ABOUT SAVERA PROGRAM

SAVERA focuses on developing, collating and providing access to healthcare information. It leverages different channels of communication - childrenâs books, audiovisuals, posters and social media to create awareness on nutrition, health and hygiene. SAVERA seeks to provide a platform to initiate and share research to create awareness on critical health issues and work towards driving opinion & public policy around viable options. SAVERA will create a credible knowledge repository of disease related information under an open platform for sharing.

The program is also a platform to communicate about the foundationâs work, ideas, finances and partner ecosystem.

SAVERA has identified target intervention areas focusing on:

- Tobacco Control

- Skill Development - First Aid/ Basic Life Support(BLS) Training

- E-Learning Platform for Health Information

In the past year SAVERA has promoted awareness through the distribution of 59450 health publications, initiated the process of behavioral change through distribution of 19709 illustrative books to children focusing on hygiene and nutrition through 90 NGOs.

SAVERA collaborated with Sambandh Health Foundation to launch a campaign on Tobacco Control in Haryana. In the past year, over 2000 police officials from 7 districts, 1800 officials from the education department have been made aware about COTPA (Cigarettes and Other Tobacco Products Act) together with over 1000 challans in Gurugram.

An academy for First Aid/ Basic Life Support (BLS) training was conceptualized and designed and implementation will start in FY 2017-18.

ABOUT SEWA PROGRAM

SEWA is a program that provides Medical Support in the event of a disaster and enables Charitable Medical Infrastructure.

The program focuses on two interventions.

DISASTER RELIEF

India has been historically vulnerable to disasters with floods, cyclones, earthquakes and landslides being a recurrent phenomenon. In the event of a disaster, thousands of lives are affected and livelihoods worth millions are destroyed. The urgent need in such situations is access to medical care.

SEWA is a Disaster Relief Initiative that aims to provide emergency medical relief services in an organized and time sensitive manner to people affected by disasters. SEWAâs core commitment is to support the governmentâs efforts in providing medical relief during a calamity.

SUPPORTING CHARITABLE INFRASTRUCTURE

An intervention of the SEWA program is CHHAYA that supports on-going Medical Facilities through Charitable Dispensaries and Health Camps.

CHHAYAâs charitable dispensaries and heath camps aim to provide access to primary healthcare services for routine ailments and support community health services with a focus on promoting health awareness and education.

With the objective of serving as many patients as possible, the effort is to deliver services in communities in an efficient, low cost & affordable manner.

Particulars pursuant to Clause O of Sub-Section 3 of Section 134 of The Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is given in âAnnexure Vâ.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Section 152 of the Companies Act, 2013 read with Article 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, has offered himself for re-appointment. The Board re-commends his re-appointment.

Brief resume of director seeking appointment/ re-appointment along with other details as stipulated under SEBI Listing (Obligations & Disclosure Requirements) Regulations, 2015, is provided in the Notice for convening the Annual General Meeting.

Further, Ms. Lynette Joy Hepburn Brown, Independent Director and Mr. Ravi Umesh Mehrotra, Non-Executive Non-Independent Director, have resigned from their directorships w.e.f. April 11 and April 12, 2017, respectively. Also, pursuant to Section 167 of Companies Act, 2013, Mr. Sunil Godhwani (DIN: 00174831) has vacated his office as Director of the Company w.e.f. August 4, 2017, for not attending any of the Board meetings held during a period of previous twelve months.

During the Financial Year 2016-17, seven 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. Bhavdeep Singh	Chief Executive Officer
Mr. Gagandeep Singh Bedi	Chief Financial Officer
Mr. Rahul Ranjan	Company Secretary

Disclosures regarding the following are mentioned in report on Corporate Governance forming part of this report.

1. Composition of Committee(s) of the Board of Director and other details;

2. Details of establishment of Vigil Mechanism;

3. Details of remuneration paid to all the Directors including Stock options; and

4. Commission received by Managing Director and/or Whole Time Director.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing (Obligation & Disclosure Requirements) Regulations, 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 Committees viz. Audit and Risk Management Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.

SEBI has vide its circular dated January 5, 2017, issued a Guidance Note on Board Evaluation. The Management made a gap analysis of your Companyâs Board Evaluation process vis-a-vis Guidance Note and the same was discussed in detail with the Board Members. The Process was found largely in-line with the Guidance Note, however, the scope for further improvement was also identified and it was decided that the gaps, wherever necessary, will be implemented in the Board Evaluation to be conducted during the FY 2017-18.

The following process of evaluation was followed:

S.	Process	Remarks	Criteria for Evaluation (including
No.			Independent Directors)
1.	Individual	Self-evaluation forms were shared and completed	This includes Members Selection and
	Self-	by the Directors and submitted to the Chairperson	Induction Process, Knowledge, skills,
	Assessment	of the Nomination and Remuneration Committee.	Diligence, participation, Leadership skills and Personnel attributes.
2.	One to One	Process Coordinators, as recommended by	This includes Board focus (Strategic inputs),
	discussion	Nomination and Remuneration Committee, were authorized to interact with each Board member to assess performance, invite direct feedback and seek inputs to identify opportunities for improvement.	Board Meeting Management, Board Effectiveness Management Engagement and addressing of follow up requests.
3.	Evaluation	A compilation of the individual self-assessments	This includes demonstration of integrity,
	by the Board,	and one to one discussions were placed at the	commitment, attendance at the
	Nomination	meetings of the Nomination and Remuneration	meetings, contribution and participation,
	and	Committee (NRC), the Independent Directorâs	professionalism, contribution while
	Remuneration	(IDâs) and the Board of Directors (BoD) held on	developing Annual Operating Plans,
	Committee	February 14, 2017 for them to review collectively	demonstration of roles and responsibilities,
	and of	and include as additional feedback to the formal	review of high risk issues & grievance
	Independent	process completed in the meetings.	redressal mechanism, succession planning,
	Directors		working of Board Committees etc
4.	Final recording and reporting	Based on the above, a final report on Board Evaluation 2016-17 was collated, presented and tabled at a meeting of the Board of Directors held on May 30, 2017. The report also noted opportunities for improvement.	NA

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 2016-17

Name	Remuneration	Median	Ratio
of the	of Director	Remuneration of
Director*	('' in crore)	employees ('' in crore)
	NIL

*Mr. Malvinder Mohan Singh, Executive Chairman did not draw any remuneration in his capacity of Executive Director during the FY 2016-17. However, in furtherance to the shareholderâs approval as accorded on September 27, 2016 and that of Board/Committees in November, 2016, Mr. Malvinder Mohan Singh was appointed as Lead-Strategic Initiatives for a period of five years w.e.f. October 1, 2016 at a remuneration of '' 12 crore p.a. Accordingly he was paid a remuneration of '' 6 crore (approx.) during the FY 2016-17.

(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	Executive Chairman	_-
Mohan Singh
Mr. Bhavdeep Singh	Chief Executive Officer	4.76%
Mr. Gagandeep	Chief Financial Officer	12.1%
Singh Bedi
Mr. Rahul Ranjan	Company Secretary	12.1%

(c) The percentage increase in the median remuneration of employees in the financial year is 8.9% (11% in the last year).

(d) The number of permanent employees on the rolls of Company is 2504 as on March 31, 2017.

Particulars	For the Financial Year 2016-17
(A) Average percentile increase	11.6%
already made in the salaries
of employees other than the
managerial personnel
(B) Percentile increase in the	4.6%
managerial remuneration
Comparison of (A) and (B)	N.A.
Justification
Any exceptional circumstances	N.A.
for increase in the managerial
remuneration

(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 Company has from time to time familiarized the Board of Directors with the Companyâs 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/0.35155800 1498650624 board-of-directors-governance-standards.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 employeesâ particulars which is available for inspection by the Members at the Registered Office and/or Corporate Office of the Company during business hours between 10.00 am to 12.00 noon on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

RELATED PARTY TRANSACTIONS

There are few materially significant Related Party Transactions made by the Company with other related parties which forms 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.

The Company has developed a Related Party Transactions Framework and Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website and the same is available at the following link: http://cdn. fortishealthcare.com/0.48746600 1499236811 related-party-transactions-framework-document-nov-2016.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 and as disclosed in this Annual Report.

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

DISCLOSURE REQUIREMENTS

As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Corporate Governance Report with Auditorsâ certificate thereon and management discussion and analysis are attached, which form part of this report.

As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, 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 âFortis Code of Conductâ is enclosed with Corporate Governance Report.

DIRECTORSâ RESPONSIBILITY STATEMENT

(a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have 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, 2017 and of the loss of the Company for the staid period;

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

(e) the directors, have 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 have 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 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, 2017 Malvinder Mohan Singh

Place: Gurgaon Executive Chairman

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:

Â 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.

Â 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.

Â 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.

Â 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, 2012

Dear Members,

The Directors have pleasure in presenting here the Sixteenth 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, 2012.

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, 2012 2011

Operating Income 29,840.37 14,957.91

Other Income 1,773.14 1,006.35

Exceptional items 63.29 3,455.43

Total Income 31,676.80 19,419.69

Total Expenditure 25,807.27 14,359.46

Operating Profit 5,869.53 5,060.23

Less: Finance Charges, Depreciation 4,791.93 3,544.89

& Amortization

Profit before Tax 1,077.60 1,515.34

Less: Tax Expenses 408.46 152.39

Net Profit for the year 669.14 1,362.95

Profits/ (Losses) attributable to 39.80 (44.23)

Minority Interest

Share in the (Loss)/Profit of 13.27 (75.10)

Associates

Net Profit attributable to the 722.21 1,243.62 shareholders of the Company

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, 2012 2011

Operating Income 2,810.90 2,654.49

Other Income 1,270.45 1,755.40

Exceptional item 1,846.24 -

Total Income 5,927.59 4,409.89

Total Expenditure 2,763.25 2,351.33

Operating Profit 3,164.34 2,058.56

Less: Finance Charges 1,150.48 640.46 and Depreciation

Net Profit/ (Loss) 2,013.86 1,418.10 attributable to 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, 2012, the Consolidated Revenues from Operations stood at Rs.29,840.37 Million as against Rs.14,957.91 Million for the corresponding previous year registering a growth of 100%. The Profit before Depreciation, Interest and Tax stood at Rs.5,869.53 Million as against Rs.5,060.24 Million for the corresponding previous year, registering a growth of 16%. The Net Profit after Tax but before Profits attributable to Minority Interest and Share in the profits of Associates stood at Rs.669.14 Million.

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, integrated healthcare delivery provider in the Pan Asia-Pacific region. The healthcare verticals of the Company span diagnostics, primary care, day care speciality and hospitals, with an asset base in 10 countries, many of which represent the fastest-growing healthcare delivery markets in the world. Currently, the Company operates its healthcare delivery network in Australia, Canada, Dubai, Hong Kong, India, Mauritius, New Zealand, Singapore, Sri Lanka and Vietnam with 75 hospitals, over 12,000 beds, over 600 primary care centres, 191 day care speciality centres, over 230 diagnostic centres and a talent pool of over 23,000 people. 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.

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

In furtherance of the strategic intent to consolidate the Group's healthcare services business across Asia Pacific Region and increase integration amongst various entities existing in the key geographical focus areas for greater operational and administrative efficiencies, Fortis Healthcare International Pte. Limited ("Fortis Healthcare International") was acquired and consolidated with the Company - Fortis Healthcare Limited, in January, 2012, thereby combining the Indian and overseas operations of the Fortis Group under one umbrella.

In view of the above and to reflect the expanded geographical coverage of the Group, the Board of Directors of your Company had, on January 11, 2012, revisited the Company's corporate identity and proposed to change the name of the Company from "Fortis Healthcare (India) Limited" to "Fortis Healthcare Limited". The same was approved by the Shareholders by way of Postal Ballot on February 23, 2012. With the approval of the Registrar of Companies, NCT of Delhi & Haryana, Ministry of Corporate Affairs, the name of the Company has since been changed to "Fortis Healthcare Limited" effective March 06, 2012.

CAPITAL RAISING AND CHANGES IN CAPITAL STRUCTURE

Changes in Capital Structure

Under the terms of the "Employee Stock Option Plan 2007", the Company allotted 76,240 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.4,051.03 Million divided into 40,51,03,475 Equity Shares of Rs.10 each to Rs.4,051.80 Million divided into 405,179,715 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 Bombay Stock Exchange 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 scrips 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, 2012, 99.77% Equity Shares of the Company were held in demat form.

STOCK OPTIONS

During the year under review, 200,000 Stock Options were granted under the "Employee Stock Option Plan 2007".

Further, during the year, the Company also constituted the "Employee Stock Option Plan 2011" whereunder, 40,50,000 Stock Options were granted to eligible employees and Directors of the Company / its Holding Company(ies) / subsidiaries.

The relevant details of the Stock Options granted during the year and outstanding as on March 31, 2012 have been set out in Annexure I to this Directors' Report.

SUBSIDIARY COMPANIES

During the year under review:

- The Company acquired 74.59% stake in Super Religare Laboratories Limited ('SRL'), resulting in SRL (together with its wholly owned subsidiary and two joint ventures) becoming a subsidiary of the Company. Subsequent to the acquisition, the Company's shareholding in SRL was diluted to 71.49% as a result of SRL issuing additional equity shares to certain strategic investors.

- Further the Group incorporated Fortis Health Management (North) Limited, Fortis Health Management (East) Limited, Fortis Health Management (West) Limited and Fortis Health Management (South) Limited as wholly owned subsidiaries.

- The Company has acquired 100% stake in Fortis Healthcare International Pte Limited ('FHIPL') from RHC Financial Services (Mauritius) Limited through its wholly owned subsidiary - Fortis Asia Healthcare Pte Ltd. Accordingly, FHIPL has become a step-down subsidiary of the Company. FHIPL is a Singapore based leading integrated healthcare delivery company with multi-vertical presence including in primary healthcare, speciality day care, hospitals and diagnostics, with a presence in nine countries viz., Hong Kong, Australia, New Zealand, Singapore, Sri Lanka, Dubai, Vietnam, Mauritius and Canada. Pursuant to the said investment in FHIPL , the direct/indirect subsidiaries of FHIPL became the direct/indirect subsidiaries of the Company.

- The Company has acquired 45% of total equity share capital of Hiranandani Healthcare Private Limited (HHPL), consequently raising its shareholding to 85% in HHPL. Accordingly, HHPL has become a subsidiary of the Company.

- In order to consolidate the holding, the Company had purchased the remaining 67% stake in Fortis Healthcare International Limited (FHIL) from International Hospital Limited (IHL), its wholly owned subsidiary in India. With the proposed transaction, FHIL became direct and wholly owned subsidiary of the Company.

Existing Subsidiaries Ã Changes during the year

- The Company acquired the remaining 10% stake in Escorts Heart Institute and Research Centre Limited ("EHIRCL") from Fortis Healthcare Holdings Private Limited (formerly known as Fortis Healthcare Holdings Limited), resulting in EHIRCL (together with its two subsidiaries) becoming a wholly owned subsidiary of the Company.

- The Group sold its 2% stake in a subsidiary, namely, Fortis Emergency Services Limited ("FESL") to Fortis Healthcare Holdings Private Limited (formerly known as Fortis Healthcare Holdings Limited), the Holding Company. Accordingly, FESL has ceased to be a step-down subsidiary of the Company.

- The entire issued and paid-up capital of Fortis Global Healthcare Infrastructure Pte. Ltd., Singapore (FGHIPL) which was incorporated as a whollyÃowned subsidiary of Fortis Healthcare International Limited (FHIL) was transferred by FHIL to Religare Health Trust Trustee Manager Pte Limited [acting in its capacity as trustee manager of Religare Health Trust (RHT)] and FHIL received 3,100 units of RHT as consideration for the said transfer. As on March 31, 2012, FHIL ,wholly owned subsidiary of the Company, holds 3100 units in RHT representing 100% beneficiary interest in RHT.

- In accordance with Regulation 3(1)(e)(i) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, International Hospital Limited transferred 11,752,402 equity shares constituting 63.2% of paid capital of Fortis Malar Hospitals Limited, in terms of inter se transfer of shares amongst group coming within the definition of group as defined in Monopolies and Restrictive Trade Practices Act, 1969, to Fortis Hospitals Limited by way of gift on June 20, 2011.

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 28, 2012, 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

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

Ms. Joji Sekhon Gill and Mr. Pradeep Ratilal Raniga have been co-opted as Additional Directors on the Board of the Company w.e.f. May 28, 2012. Pursuant to the provisions of Section 260 of the Companies Act, 1956, ("the Act"), they hold the office upto the date of the ensuing Annual General Meeting and are eligible for appointment as Directors of the Company in terms of Section 257 of the Act.

The Company has received Notices under Section 257 of the Act, proposing the appointments of Ms. Joji Sekhon Gill and Mr. Pradeep Ratilal Raniga as the Directors, liable to retire by rotation.

Further, in accordance with the provisions of the Act, and Articles of Association of the Company, Mr. Gurcharan Das, Mr. Sunil Godhwani and Justice S S Sodhi are liable to retire by rotation at the ensuing Annual General Meeting.

Justice S S Sodhi, in view of his pre-occupation, has not offered himself 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 vacany created by the retierement of Justice S S Sodhi. The Board of Directors extends its sincere appreciation for the valuable contributions made by Justice S S Sodhi during his tenure as a Director of the Company.

Mr. Gurcharan Das and Mr. Sunil Godhwani, being eligible, have offered themselves for re-appointment.

Your Directors recommend the appointment / re- appointment of Ms. Joji Sekhon Gill, Mr. Pradeep

Ratilal Raniga, Mr. Gurcharan Das and Mr. Sunil Godhwani, 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 2012-13.

The Company has received a letter dated May 25, 2012 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 which are self-explanatory:

5. Without qualifying our opinion, we draw attention to note 30 of financial statements, regarding the assessment of recoverability of Minimum Alternate Tax (MAT) credit for Rs. 1,046.27 lacs. The management has explained to us that, as part of its restructuring plan, Company has sold certain business undertakings comprising of Hospital Operations and Management, In Patient health services and emergency healthcare services to another fellow subsidiary. The arrangements of the manner in which revenue would arise to transferor companies from the transferee company are in process of being finalized. Till such time, no adjustment has been recorded towards on MAT credit recoverable in the Company.

6. Without qualifying our opinion, we draw attention to the note no 19 of 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. 603 lacs. The same has been disclosed as a contingent liability. 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.

7(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.

(b) Certain tax demands aggregating to Rs. 9,208.28 lacs (without considering the demand of Rs. 10,101.10 lacs raised twice in respect of certain years and after adjusting Rs. 13,760.88 lacs for which the Escorts Heart Institute and Research Centre Limited (a subsidiary of the Company) has a legal right to claim from erstwhile promoters as discussed in detail in note 12 of financial statements) raised on the subsidiary 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 financial statements. The same were also the subject matter of qualification by us in the previous years as well.

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

Material Changes/Commitments

A large capital outlay would be involved in benefitting from the growth opportunities in the Indian healthcare sector. Your Company is, therefore, aligning itself to internationally emerging trends, such as transformation to an asset light model. Aligning the Company's business with such international trends would assist your Company to grow faster and enable it to provide state of the art, medical and healthcare services. In furtherance thereof, your Company had been continuously evaluating various business and ownership strategies regarding your Company and its subsidiaries (the "Fortis Group"), and various models for raising long-term financial resources by capitalising upon the expertise of the Fortis Group.

Consequently, your Company is undergoing an internal restructuring, whereby the business of certain identified hospitals of the Fortis Group will be divided into the two separate business verticals (i) Clinical Establishments Division; and (ii) Medical Services Division, such that they are managed under different verticals whilst continuing to have mutual interdependencies.

The details of the internal restructuring have also been disclosed in the Notes to Accounts and other specific communication(s) to the shareholders.

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.

During the year, Fortis Health Management (South) Limited, a subsidiary of the Group, has entered into a Partnership agreement with Dr. Chandrashekar G.R. and Dr. Sarla Chandrashekar on April 27, 2011 with 51% share in assets, liabilities, income and expenses, to provide cardiac care facilities.

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 2011-12, the Directors hereby confirm:

(a) that in the preparation of the Annual Accounts for the year ended March 31, 2012, 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 14, 2012 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

Mar 31, 2010

We are pleased to present the Fourteenth Annual Report on business and operations together with the Audited Financial Statements and the Auditors Report of your Company for the year ended March 31, 2010.

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,

2010 2009

Operating Income 9,379.38 6,305.45

Other Income 493.12 283.93

Total Income 9,872.51 6,589.38

Total Expenditure 7,966.27 5,446.85

Operating Profi t/(Loss) 1,906.23 1,142.53

Less: Finance Charges, 1172.32 924.01

Depreciation & Amortization

Profi t/(Loss) before Tax & Prior 733.91 218.52

Period Items

Less: Tax Expenses 33.56 41.09

Less: Prior Period Items 0.30 0.80

Add: Extraordinary items - 64.01

Net Profi t/(Loss) for the year 700.05 240.64

Profit/ (Loss) attributable to Minority 20.85 27.42

Interest

Share in current year profit/ (loss) of 15.61 (5.03)

Associate Companies

Net Profit/ (Loss) attributable to 694.82 208.19

the shareholders of the Company

The highlights of financial results of your Company on stand-alone basis are as follows:

[Rs. in Million]

Particulars Standalone

Year ended Year ended

March 31, March 31, 2010 2009

Operating Income 2,098.16 1,744.55

Other Income 411.47 189.97

Total Income 2,509.63 1,934.52

Total Expenditure 1,874.89 1,664.41

Operating Profi t/(Loss) 634.74 270.11

Less: Finance Charges and 330.61 334.86

Depreciation

Profi t/(Loss) before Tax & Prior 304.13 (64.75)

Period Items

Less: Tax Expenses - 5.09

Less: Prior Period Items 2.67 1.65

Net Profit/ (Loss) attributable to the 301.46 (71.49)

shareholders of the Company

The year under review has been eventful year for your Company. Your Company has forayed into developed Asian Markets through a strategic investment in Parkway Holdings Limited, Singapore.

During the year, your Company has made significant progress in terms of quality of clinical care, service excellence and is evolving the business model so as to improve the overall value proposition to all its stakeholders. The Consolidated Revenues from Operations stood at Rs. 9,379.38 Million (previous year Rs. 6,305.45 Million) for the year, recording a growth of 49%.

Profit before Depreciation, Interest and Tax stood at Rs. 1,906.23 Million in F. Y. 2009-10, an increase of 67% over the preceding year. Net Profit after tax for F.Y. 2009-10 was Rs 700.05 Million, an increase of 191% over F. Y. 08-09.

PERFORMANCE REVIEW

A detailed discussion on Operational and Financial Performance of the Company for the year ended March 31, 2010, is given in Management Discussion and Analysis Report annexed to this Directors Report.

GROWTH STRATEGY

The year under review was historic for the Company. It concluded two landmark acquisitions viz. acquisition of 10 Hospitals (including 2 under construction) from M/s Wockhardt Hospitals Limited and acquisition of strategic stake in Parkway Holdings Limited, Singapore.

Acquisition of 10 hospitals from M/s Wockhardt Hospitals Limited, has not only provided a Pan India presence to ÃFortis but also added a vast number of medical and non-medical professionals to the talent pool, which will enable it to grow faster.

Similarly, Parkway Acquisition was driven by twin objectives of establishing the international presence and also learn from established players to redefine healthcare in India.

In order to finance its growth strategy, including cost of aforesaid acquisitions and to further strengthen its financial position, the Company raised funds through:

Rights Issue of Equity Shares with Detachable Warrants

During the year, a Rights Issue of Equity Shares of Rs. 10 each, at a premium of Rs. 100 per equity share was made. The Issue opened for subscription on September 30, 2009 and closed on October 15, 2009. In terms of Letter of Offer dated September 22, 2009, the Company had, on October 27, 2009, allotted 9,06,46,936 Equity Shares aggregating Rs. 9,971.16 Million. The equity shares were listed at the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited w.e.f. 3rd November, 2009.

Further, in terms of the Rights Issue, the shareholders were entitled to one detachable warrant with one equity share allotted under the Issue and accordingly, 9,06,46,936 detachable warrants were issued and allotted to the eligible shareholders. These were listed at the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited w.e.f. 4th November, 2009.

Further, the warrants were to be exercised at any time during the ÃNotice PeriodÃ to be fixed by the Company within the Warrant Exercise Period, between six (6) months to eighteen (18) months from the date of allotment of equity shares in the Rights Issue (i.e., a period from April 27, 2010 to April 26, 2011). The Company has fixed the ÃNotice PeriodÃ for exercise of detachable warrants from May 21, 2010 to June 19, 2010, at an offer price of Rs. 153.

Foreign Currency Convertible Bonds

The Company also issued 1,000, 5 percent Foreign Currency Convertible Bonds of US$ 100,000 each aggregating US$ 100 Million in May, 2010 and are convertible at the option of the bondholders between May 2013 to May 2015. These bonds are listed on Luxembourg Stock Exchange (LSE) and are admitted to trading on the EURO MTF market of LSE.

CAPITAL STRUCTURE

As on March 31, 2010, the Authorized Share Capital of the Company stood at Rs.6,780,000,000, divided into 600,000,000 Equity Shares of Rs.10 each, 200 Class ÃA Non-Cumulative Redeemable Preference Shares of Rs. 100,000 each, 11,498,846 Class ÃB Non-Cumulative Redeemable Preference Shares of Rs.10 each and 64,501,154 Class ÃC Cumulative Redeemable Preference Shares of Rs.10 each.

The Issued Share Capital stood at Rs. 3,218,000,090, divided into 317,323,609 Equity Shares of Rs.10 each, 1,600,000 Class ÃC Zero Percent Cumulative Redeemable Preference Shares of Rs.10 each and 3,196,000 Class ÃC Zero Percent Cumulative Redeemable Preference Shares of Rs.9 each and the Subscribed and paid-up share capital stood at Rs. 3,216,500,090, divided into 317,323,609 Equity Shares of Rs.10 each, 1,450,000 Class ÃC Zero Percent Cumulative Redeemable Preference Shares of Rs.10 each and 3,196,000 Class ÃC Zero Percent Cumulative Redeemable Preference Shares of Rs. 9 each.

SHARES UNDER COMPULSORY DEMATERIALIZATION

The Equity Shares of your Company are included in the list of specified scrips 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, 2010, 99.64% of shares were held in demat form.

STOCK OPTIONS

During the year under review, the Company has granted 7,63,700 Stock Options under the ÃEmployee Stock Option Plan 2007Ã to the eligible employees and Directors of the Company / its subsidiaries. Further, during the year under review, the Company has also allotted 10,140 Equity Shares of Rs. 10 each, against exercise of the vested Stock options exercised by the eligible employees.

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme), Guidelines,1999, as amended from time to time, the details of stock options as on March 31, 2010 under the ÃEmployee Stock Option Plan 2007Ãare set out in Annexure II to this Directors Report.

SUBSIDIARY COMPANIES

On June 18, 2009, your Company incorporated a wholly owned subsidiary viz. Fortis Hospitals Limited. The main objects of the said wholly-owned subsidiary included purchase, lease or otherwise acquire, establish, maintain, operate, run, manage or administer hospitals, medicare, healthcare, diagonostic, health aids and research centre.

During the year under review, your Company, through one of its wholly owned subsidiary viz. International Hospital Limited, has increased its stake in Fortis Malar Hospitals Limited (FMHL) from 49.86% to 50.02%, thereby making FMHL as its subsidiary. Further, Fortis Hospitals Limited has acquired 100% stake in Kanishka Housing Development Company Limited (KHDCL) and thereby KHDCL has also become a step down subsidiary.

During the year under review, one of the step down subsidiaries of your Company, Fortis Healthcare International Limited, acquired 100% stake in Fortis Global Healthcare (Mauritius) Limited (FGHML) and thereby FGHML has also become a step down subsidiary. FGHML is in the business of Investing in Companies involved in providing healthcare services.

Fortis Hospital Management Limited (FHoML) was a wholly owned step down subsidiary of the Company. During the year under review, FHoML made an allotment of equity shares to Fortis Healthcare Holdings Limited (the promoter company) and thus, became its subsidiary and consequently, became a sister subsidiary of the Company.

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

The Ministry of Corporate Affairs, Government of India, vide its Letter No.47/405/ 2010-CL-III dated 20th May, 2010, has granted exemption from annexing the Accounts and other information of the subsidiaries along with the Accounts of the Company, for the financial year ended March 31, 2010.

In terms of the said exemption letter, a statement containing brief financial details of the Companys subsidiaries for the year ended March 31, 2010 is included in the Annual Report. The Annual Accounts of the subsidiary companies and the related detailed information are open for inspection by any shareholder including the shareholder of subsidiary companies at the registered office of the Company and subsidiaries concerned during the working hours on all working days. The Company will make available these documents to the shareholders including shareholders of subsidiary companies upon receipt of request from them. The shareholders, if they desire, may write to the Company to obtain a copy of financials of the subsidiary companies.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to strive towards highest standards of Corporate Governance while interacting with all the stakeholders.

The report of Board of Directors of the Company on Corporate Governance is given as a separate section titled as ÃReport on Corporate Governance 2009 - 10Ã which forms 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 Corporate Governance Report.

MANAGEMENT DISCUSSION & ANALYSIS

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis is given separately and forms part of this Annual 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, your Directors have decided to plough back the profits and thus, not recommended any dividend for the financial year under review. Also, during the said Financial Year, no amount has been transferred to reserves.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Harpal Singh, Mr. V M Bhutani, Justice S S Sodhi and Mr. Ramesh L Adige shall retire by rotation as Directors at the ensuing Annual General Meeting. Mr. Harpal Singh and Justice S S Sodhi, being eligible, have offered themselves for re-appointment, at the ensuing Annual General Meeting.

Mr. V M Bhutani and Mr. Ramesh L Adige, in view of their pre-occupation, have not offered themselves for re-appointment and accordingly, they will cease to be the Directors of the Company with effect from the conclusion of the ensuing Annual General Meeting. Since no proposal has been received for filling up the vacancies, it is decided not to appoint any Director in place of Mr. V M Bhutani and Mr. Ramesh L Adige.

The Board of Directors extends its sincere appreciation for the valuable contributions made by Mr. V M Bhutani and Mr. Ramesh L Adige during their tenure as Directors.

Your Directors recommend the re-appointment of Mr. Harpal Singh and Justice S S Sodhi at the ensuing Annual General Meeting.

STATUTORY AUDITORS / AUDITORS REPORT

As per the provisions of the Companies Act, 1956, M/s S.R. Batliboi & Co., Chartered Accountants, hold office as Statutory Auditors of your Company till the conclusion of the ensuing Annual General Meeting and have expressed their willingness to be re-appointed as the Auditors of the Company.

Your Company has received the Certificate from M/s S.R. Batliboi & Co., Chartered Accountants, as required under Section 224(1B) of the Companies Act, 1956, to the effect that their re-appointment, if made, will be within the limits as prescribed under the provisions thereof. Your Directors recommend their re-appointment as the Auditors of the Company for the financial year 2010-11.

The 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 (ÃDDA) 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 fi led 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 of Notes to the Accounts of Consolidated Financial Statements).

(b) Certain tax demands aggregating to Rs. 9,686.76 lacs (without considering the demand of Rs. 10,101.01 lacs raised twice in respect of certain years and after adjusting Rs. 13,282.38 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 of Notes to the Accounts of Consolidated Financial Statements), 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 qualifi cation by us in the previous year as well.

As the matters are sub-judice and appeals against the demands are pending at various stages and based on the advice received from legal counsels, the management is confi dent that the matters shall get resolved in its favour.

DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956

Except as disclosed elsewhere in this Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this Report. As required under Section 217(2) of the Companies Act, 1956, the Board of Directors informs the shareholders that during the financial year under review, no changes have occurred in the nature of the Companys business, in the Companys subsidiaries or in the nature of business carried on by them 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

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees have been set out in the Annexure to 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 Shareholders excluding this Information. Any Shareholder interested in obtaining such information may write to the Company Secretary at the registered office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors hereby confirm:

I. that in the preparation of the Annual Accounts, 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.

ACKNOWLEDGEMENTS

Your Directors place on record there sincere appreciation for signifi cant contribution made by the employees at all levels through their dedication, hard work and commitment and look forward to their continued support. Your directors also take this opportunity to express sincere thanks to the medical fraternity and patients for their continued co-operation, patronage and trust reposed in the Company and its services.

Your Directors also wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by banks, financial institutions, government and shareholders and look forward to having the same support in all future endeavors.

On behalf of the Board of Directors

Date : May 28, 2010 Malvinder Mohan Singh

Place: New Delhi Chairman

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