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Notes to Accounts of Fortis Healthcare Ltd.

Mar 31, 2016

1. Nature of operations

Fortis Healthcare Limited (the ''Company'' or ''FHL'') was incorporated in the year 1996 and commenced its hospital operations in the year 2001. As part of its business activities, the Company holds interests in its subsidiaries, joint ventures and associate companies through which it manages and operates a network of multi-specialty hospitals and diagnostic centers. The Company''s equity shares are listed on both BSE Limited and National Stock Exchange of India. The Company''s 4.66% LIBOR foreign currency convertible bonds are listed on the Singapore Exchange Securities Trading Limited (the "SGX-ST").

2) Basis of preparation

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2. Leases

(a) Assets taken on Operating Lease:

Hospital/ Office premises, few medical equipments and other premises are obtained on operating lease. The total lease payments in respect of such leases recognised in the statement of profit and loss for the year are Rs.1,805.62 lacs (Previous year Rs.2,262.21 lacs) out of which amount of rent capitalized during the year are Rs.1,225.21 lacs (Previous year Rs.1,212.24 lacs).

(b) Assets given on Operating Lease

i) The Company has sub- leased some portion of hospital premises. In all the cases, the agreements are further renewable at the option of the Company. The total lease income received / receivable in respect of the above leases recognised in the statement of profit and loss for the year are Rs.28.63 lacs (Previous year Rs.26.32 lacs).

ii) The Company has leased out certain capital assets on operating lease to a Trust managing hospital operations. The lease term is for 3 years and thereafter renewable at the option of the lessor. The lease arrangement is non-cancellable in nature. The details of the capital assets given on operating lease are as under:

3. Employee Stock Option Plan

The Company has provided share-based payment scheme to the eligible employees and directors of the Company/ its subsidiaries and holding company. During the year ended March 31, 2008, 458,500 options (Grant I) were granted to the employees under Plan ''A''. Under the same plan, 33,500 options (Grant II) were granted to the employees during the year ended March 31, 2009, 763,700 options (Grant III) were granted during the year ended March 31, 2010, 1,302,250 options (Grant IV) were granted during the year ended March 31, 2011 and 200,000 options (Grant V) were granted during the year ended March 31, 2012. Under plan ''B'', 4,050,000 options (Grant VI) were granted during the year ended March 31, 2013, 3,715,000 options (Grant VII) were granted during the year ended March 31, 2014, 240,000 option (Grant VIII) were granted during the year March 31, 2015, 100,000 option (Grant IX) during the current year and 2,500,000 options (Grant X) were granted during the current year. The Company has granted these options under Equity Settlement method and there are no conditions for vesting other than continued employment with the Company. The weighted average share price of the Company during the year was Rs.170.22 (Previous year Rs.118.67). As at March 31, 2016, the following schemes were in operation:

4. Disclosures under Accounting Standard - 15 (Revised) on ''Employee Benefits'': Defined Benefit Plan

The Company has a defined benefit gratuity plan, where under employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn basic salary) for each completed year of service subject to a maximum limit of Rupees 1,000,000 in terms of the provisions of Gratuity Act, 1972. Vesting occurs upon completion of 5 years of service. The Gratuity fund is unfunded.

The following table summarizes the components of net benefit expenses recognised in the statement of profit and loss and the amounts recognized in the balance sheet.

5. The Company has entered into ''Operation and Management'' agreement with entities which are into hospital operations, in terms of which, the Company is responsible for developing and providing maintenance support and related services necessary to support, manage and maintain the hospital as may be required. The management fee in this case is generally based on gross billing of the hospital subject to certain conditions as per the underlying agreement. The gross billing of the hospital is considered based on the unaudited financial statements of the respective entity. The management does not anticipate any material changes in the amounts considered in financial statements.

6. Restructuring

The Company has completed following restructuring during the previous year ended 31 March, 2015:-

a. The Company''s primary business consists of provision of Hospital Services through various entities. The Company initiated internal restructuring within the Company with a view to streamline and focus Group companies'' resources and energies on different divisions and undertakings and to align the business with the internationally emerging trends by moving towards innovative and cost effective methods such as transformation to asset light models. Subsequent to the internal restructuring completed during the year, the business of certain identified hospitals of the Company are being divided into the following two verticals, such that they are managed under different verticals whilst continuing to have mutual interdependencies:

(i) One vertical (the "Clinical Establishments Division") will own, maintain and operate clinical establishments (being fully air conditioned institutions established, and specifically customized and duly fitted with all fixtures, fittings, certain medical equipment and infrastructure required for running and operating the hospitals), along with providing services under outpatient division and radio-diagnostic services (hereinafter referred to as the "Clinical Establishment Services").

(ii) The other vertical (the "Medical Services Division") will undertake the business of running the hospital operations, being hereinafter referred to as provision of medical services, including in-patient services and emergency services ("Medical Services").

b. In continuance of Company''s strategy of Asset Light model, during the previous year, the Company had entered in to an agreement with Escorts Heart and Super Specialty Hospital Limited ("EHSSHL"), a subsidiary of Religare Health Trust, for transfer of net assets relating to the Mohali Clinical Establishment (in Punjab) to EHSSHL. Such transaction had resulted in net gain of Rs.265.37 lacs and disclosed as an exceptional item.

c. During the year ended 31 March, 2014, the Board of Directors of the Company at its meeting held on March 25, 2014 approved the purchase of operations of Fortis Hospital, Shalimar Bagh from its subsidiary, Fortis Hospitals Limited (''FHsL'') on a going concern basis by way of a slump sale. The Company and FHsL entered into a business transfer agreement (''BTA'') on March 28, 2014 for purchase of operations of Shalimar Bagh for a cash consideration of Rs.4,000 lacs. The transaction has been executed on April 1, 2014 as per the agreement.

7. During the current year, the Company entered into a Business transfer agreement to sell the business of its hospital at Kangra, Himachal Pradesh as a going concern on a slump sale basis with effect from September 1, 2015. Such transaction has resulted in net loss of Rs.1,257.18 lacs and has been disclosed as an exceptional item.

8. Statutory bonus amounting to Rs.275.88 lacs has been recorded as an exceptional item which represents the amount accrued towards incremental bonus payable to existing and deemed employees by the Company for the period from April 1, 2015 to December 31, 2015 due to enactment of The Payment of Bonus (Amendment) Act, 2015 with retrospective effect from April 1, 2014 for which notification was issued in January, 2016.

9. As part of Sponsor Agreement entered between The Trustee-Manager of Religare Health Trust, Fortis Global Healthcare Infrastructure Pte. Limited and Hospital Service Companies (collectively referred as ''Indemnified parties'') with the Company, the Company has provided following indemnities:-

i) To RHT and its directors, officers, employees and agents under the relevant transaction agreements against any losses or liabilities finally determined as payable for any breach of the Consolidated Foreign Direct Investment (FDI) Policy or Foreign Exchange Management Act (''FEMA''), to the extent that such breach has resulted from the acquisition by RHT of the Hospital Services Companies.

Further, the Company has undertaken to transfer or procure additional medical and healthcare services to Hospital Services Companies in the event that any regulatory authority raises concerns over compliance with any applicable law.

However, the Company will not be liable to indemnify the Indemnified Parties for any losses resulting from delay or failure of the Indemnified Parties in completing any statutory filings or similar formalities under the Consolidated FDI Policy, FEMA and other laws in force in India as of the Listing Date i.e. October 19, 2012, required to be undertaken by the Indemnified Parties in relation to the acquisition by RHT or FGHIPL of the equity shares of the Hospital Services Companies.

The Company''s obligations under this indemnity shall continue so long as the Company or the Group holds 15.0% or more of the total units from time to time issued in RHT or three years from the Listing Date, whichever is later.

However, the Company will be liable in respect of the indemnity for a maximum period of five years from the Listing Date.

ii) The Company has also undertaken to indemnify ("Tax Indemnity") each of the Hospital Services Companies and their respective directors, officers, employees and agents (the "Investing Parties") against tax liabilities (including interest and penalties levied in accordance with the Income tax Act and any cost in relation thereto) which these Investing Parties may incur due to the non-allowance of interest on Compulsorily Convertible Debentures (CCDs) or Optionally Convertible Debentures (OCDs) in the hands of the Hospital service Companies. Accordingly, Company has till date accrued Rs.205.03 lacs (Previous year Rs.205.03 lacs) as provision for contingency. The management based on the computation received does not foresee any change in the provision for contingencies.

iii) Further, as per terms of the various Agreements entered into between Hospital Services Companies and Fortis Operating companies, the Hospital Services Companies have right to recover certain statutory dues levied on them from Fortis Operating Companies. There is a possible present obligation on Hospital Services Companies to collect certain statutory dues from the Fortis Operating Companies and pay it to the relevant authorities. In view of uncertainty arising from interpretation of the regulations, management believes that value of such statutory dues cannot be measured reliably and therefore has not been considered in these financial statements.

10. On January, 9 2012, FHML entered into Share Purchase Agreement with the Company to acquire its 49% interest in FHTL at an aggregate consideration of Rs.37,728.39 lacs. FHTL is the owner of Shalimar Bagh Clinical Establishment and Gurgaon Clinical Establishment. FHML on September 17, 2012 entered into Shareholders'' Agreement with the Company, pursuant to which FHML has a call option over the Company''s 51% interest in FHTL ("FHTL Call Option") at a fixed price, subject to fulfillment of certain conditions, applicable laws including, and receipt of necessary approvals from all third parties. FHML also has the right to appoint 50% of the directors of FHTL, including the chairman of the board of directors who will have the casting vote in case of deadlock on any matter, including all financial and operating policies of the Company, brought to the board of directors for its approval. Additionally, the Company has assigned its right to receive dividends from FHTL in favour of FHML. In addition, FHML has a put option on its 49% interest in FHTL ("FHTL Put Option"), exercisable if FHML is unable to acquire 100% of the issued and paid-up share capital of FHTL within 5 years from the date of transfer of the 49% shareholding of FHTL by the Company to FHML, for any reason outside the control of FHML. The put option shall be exercised at a price that is equal to the fair market value of Put Securities on the date of exercise of put option, determined on a discounted cash flow basis.

During the current year, The Board of Directors of the Company approved the acquisition of 51% economic interest in FHTL. The Management is in process of obtaining the legal and regulatory approvals and intends to hold the investment for a long-term period. Accordingly, management has reclassified the investment in FHTL as non-current as at March 31, 2016 [Refer to note 4(xii)].

11. During the year ended March 31, 2013, Escorts Heart Institute and Research Centre Limited (''EHIRCL'') have issued 401,769 Compulsorily Convertible Preference Shares (''CCPS'') of face value of Rs.10 each at a premium of Rs.7,456.98 per CCPS to Kanishka Healthcare Limited (''KHL'') with a maturity period of 15 years aggregating to Rs.30,000 lacs. During the previous year ended March 31, 2013, KHL merged with International Hospital Limited (IHL). Following are the key terms of CCPS:-

a) CCPS Put Option - IHL is entitled to exercise an unconditional and irrevocable right to require the Company or its nominee to buy all of CCPS upon occurrence of IHL having exercised FHTL Put Option or FHTL Call Option under shareholders agreement entered between the Company, FHTL and FHML, as per above.

b) Under FHTL call Option the Company is required to pay sum equal to the fair valuation of Equity Shares of EHIRCL as per DCF Method.

c) In case of FHTL put option Company has right to purchase, subject to due compliance with law, all CCPS at consideration equal to IHL''s contribution along with coupon rate agreed.

12. During the year ended March 31, 2011, the Company had issued 1,000 5% Foreign Currency Convertible Bonds of US Dollar 1 lac each aggregating to US Dollar 1,000 lacs due 2015 (the "Bonds"). These Bonds were listed on the Euro MTF market of the Luxembourg Stock Exchange. The Bonds were convertible at the option of the holder at any time on or after May 18, 2013 (or such earlier date as is notified to the holders of the Bonds by the Company) up to May 11, 2015 into fully paid equity shares with full voting rights at par value of Rs.10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs.167 with 26,922.1557 shares being issued per Bond with a fixed rate of exchange on conversion of Rs.44.96 = US Dollar 1.00. The Conversion Price was subject to adjustment in certain circumstances.

The Bonds were redeemable, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Subject to the prior approval of the RBI (or any other statutory or regulatory authority under applicable laws and regulations of India) if required, the Bonds were redeemable, in whole but not in part, at the option of the Company at any time on or after 18 May 2013 (subject to the Company having given at least 30 days'' notice) at 100 percent of their aggregate principal amount plus accrued but unpaid interest if the closing price of the Shares on each trading day with respect to the shares for a period of at least 30 consecutive such trading days is equal to or greater than 130 per cent of the Accreted Conversion Price (as defined in the terms and conditions of the Bonds).

The Bonds were redeemable in whole, but not in part, at the option of the Company subj ect to satisfaction of certain conditions including obtaining Reserve Bank of India ("RBI") approval, at certain early redemption amount, as specified, on the date fixed for redemption in the event of certain changes relating to taxation in India.

The Bonds were redeemed by the Company in US Dollars on May 18, 2015 at 103.1681 per cent of its principal amount at exchange rate of Rs.63.59357= US Dollar 1. The Company has utilized Securities premium account and provided for the premium on redemption for the period up to the date of redemption amounting to Rs.2,014.71 lacs (Previous year Rs.1,922.85 lacs). Accordingly, the corresponding Debenture redemption reserve has been transfered to the Surplus in Statement of Profit & Loss.

13. During the year ended March 31, 2014, the Company issued 150 Foreign Currency Convertible Bonds aggregating to US Dollar 300 lacs due 2018 (the "Bonds") at the rate of (4.66% LIBOR). These Bonds are listed on the Singapore Exchange Securities Trading Limited (the "SGX-ST").

The Bonds are convertible upto US Dollar 240 lacs of principal amount at the option of the holder at any time on or after September 17, 2013 (or such earlier date as is notified to the holders of the Bonds by the Company) up to August 01, 2018 into fully paid equity shares with full voting rights at par value of Rs.10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs.99.09 with 120,471.29 shares being issued per Bond with a fixed rate of exchange on conversion of Rs.59.6875 = US Dollar 1.00. The Conversion Price is subject to adjustment in certain circumstances.

Subject to certain conditions, the Bonds may be converted mandatorily into fully paid equity shares, 20% of the principal amount of bond outstanding (but in no event exceeding US Dollar 60 lacs in aggregate principal amount of Bonds), at the option of the Company at any time on or after September 17, 2013 up to August 01, 2018 at the Partial Reset Conversion Price (as defined in the "Terms & Conditions of the Bonds").

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on August 08, 2018 at 100 per cent of its principal amount. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

The Company has incurred expenses of Rs.542.62 lacs (including Rs.24.72 lacs paid to Auditors) in connection with this issue.

The proceeds of the issue amounting to Rs.18,390.74 lacs were used for repayment of debts.

Exchange Rate at March 31, 2016 considered for restatement of the Bonds at the year-end was Rs.66.17526= US Dollar 1 (Rs.62.33553= US Dollar 1 at March 31, 2015).

14. During the year ended March 31, 2014, the Company issued 550 Foreign Currency Convertible Bonds of US Dollar 1 lac each aggregating to US Dollar 550 lacs due 2018 (the "Bonds") at the rate of LIBOR 4.86%. The Bonds are convertible at the option of International Finance Corporation ("IFC"), an international organization established by Articles of Agreement among its member countries including the Republic of India (the holder) giving 7 days notice to the Company at any time on or after June 07, 2013 up to June 08, 2018 into fully paid equity shares with full voting rights at par value of Rs.10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs.99.09 and number of shares to be issued will be calculated on conversion on the basis of applicable rate of exchange of US Dollar and '' on conversion date. The Conversion Price is subject to adjustment in certain circumstances.

The Bonds may be converted on the request of the holder but not less than value of US Dollar 5,000,000 or in multiple of US Dollar 1,000,000 thereafter. Except in certain condition mentioned in the "Terms & Conditions of the Bonds" the holder cannot exercise the Conversion Option in part or in full in respect of twenty per cent (20%) of the original bond value for a period of three (3) years after the Subscription Date.

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Subject to the prior approval of the RBI (or any other statutory or regulatory authority under applicable laws and regulations of India) if required, the Bonds may be converted mandatorily into fully paid equity shares, 20% of the principal amount of bond at the option of the Company at any time on or after June 07, 2013 at Modified Conversion Price (as defined in the "Terms & Conditions of the Bonds").

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on June 08, 2018 at 100 per cent of its principal amount. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

Exchange Rate at March 31, 2016 considered for restatement of the Bonds at the year-end was Rs.66.17526= US Dollar 1 (Rs.62.33553= US Dollar 1 at March 31, 2015).

15. Details of dues to Micro and Small Enterprises as per MSMED Act, 2006

During the period ended December 31, 2006, Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development Act, 2006 which comes into force with effect from October 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The management has confirmed that none of the suppliers have confirmed that they are registered under the provision of the Act. In view of this, the liability of the interest and disclosure are not required to be disclosed in the financial statements.

16. During the year, the Company has capitalised the following expenses to the cost of fixed asset/ capital work in progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amount capitalised by the Company.

17. Corporate social responsibility

As per section 135 of the Companies Act, 2013 and rules therein, the Company is required to spend at least 2% of average net profit of past three years towards Corporate Social Responsibility (CSR). Details of corporate social responsibility expenditures as certified by Management are as follows:

18. Previous Year Figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification. Figures for the previous year have been audited by another firm of Charered Accountants.


Mar 31, 2015

1. Nature of Operations

Fortis Healthcare Limited (the ''Company'' or ''FHL'') was incorporated in the year 1996 and commenced its hospital operations in the year 2001. As part of its business activities, the Company holds interests in its subsidiaries, joint ventures and associate companies through which it manages and operates a network of multi- specialty hospitals and diagnostic centres. The Company''s equity shares are listed on both BSE Limited and National Stock Exchange of India Ltd. The Company''s 5% foreign currency convertible bonds were listed on the Euro MTF market of the Luxembourg Stock Exchange and 4.66% LIBOR foreign currency convertible bonds are listed on the Singapore Exchange Securities Trading Limited (the "SGX-ST").

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policies explained subsequently.

Other Notes:

1.Share Capital

(a) Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) Terms of redemption of preference shares

During the year ended March 31, 2009, the Company issued 1,450,000 Class ''C'' Zero Percent Cumulative Redeemable Preference Shares of Rs. 10 each at a premium of Rs. 90 per share. Preference shares were redeemable at a premium of Rs. 117.69 per preference share, on October 18, 2010, however, the date of redemption of October 18, 2010 has been deferred to October 18, 2014 at the redemption premium of Rs. 198.20 per share. Both the Company and the subscriber had an option for early redemption of the Preference Shares. In case the early redemption option would have been exercised, the premium on redemption shall be adjusted proportionately. Preference shares were redeemed on October 28, 2013 at a redemption price of Rs. 184.96 per share including redemption premium of Rs. 174.96 per share.

During the year ended March 31, 2008, the Company issued 11,500,000 Class ''C'' zero percent cumulative redeemable preference shares of Rs. 10 each at a premium of Rs. 90 per share, out of which 3,196,000 zero percent cumulative redeemable preference shares were still pending for redemption at the beginning of the year. These shares were redeemable at Rs. 175 per share, including premium, on October 18 of 2008, 2009, 2010, 2011 and 2012, respectively in installment of Rs. 1,437.50 lacs each and installment of Rs. 12,937.50 lacs on October 18, 2013. The Company had the option to make voluntary premature redemption of the Shares in part or in full in which event the redemption premium would have been computed @ 12% compounded annually on the subscription amount from the subscription date till the redemption date. However, the due date of redemption in 2009, 2010, 2011, 2012 and 2013, respectively has been postponed to October 18, 2014 and due to this, the Company has agreed to pay additional redemption premium calculated at 12%, 12.5%, 13%, 13% and 13%, respectively on the redemption amounts due in respective years. In the event of liquidation of the Company before redemption of preference shares, the holder of preference shares will have priority over equity shares in the repayment of capital. Preference shares were redeemed on October 28, 2013 at a redemption price of Rs. 181.36 per share including redemption premium of Rs. 172.36 per share.

(c) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option plan (ESOP) of the Company, please refer note 10.

(d) Shares reserved for issue on conversion

For details of shares reserved for issue on conversion of bonds, please refer note 17, 18 & 19 regarding terms of conversion/ redemption of bonds.

2. Related party disclosures

Names of related parties and related party relationship

Ultimate Holding Company

RHC Holding Private Limited (Holding Company of Fortis Healthcare Holdings Private Limited)

Holding Company

Fortis Healthcare Holdings Private Limited (''FHHPL'')

Subsidiary Companies - direct or indirect through investment in subsidiaries

1 Fortis Hospotel Limited (''FHTL'') (refer note 15)

2 Hiranandani Healthcare Private Limited (''HHPL'')

3 Fortis La Femme Limited (''FLFL'') (formerly known as Fortis Health Management (West) Limited)

4 Fortis Health Management (North) Limited (''FHMNL'')*****

5 Fortis C-Doc Healthcare Limited (''C-Doc'')

6 Fortis Health Management (East) Limited (''FHMEL'')

7 SRL Limited (''SRL'')

8 SRL Diagnostics Private Limited (''SRLDPL'')

9 Fortis Healthcare International Limited (''FHIL'')

10 Fortis Global Healthcare (Mauritius) Limited (''FGHML'')

11 Fortis Hospitals Limited (''FHsL'')*****

12 Fortis Cancer Care Limited (''FCCL'') (formerly known as Fortis Health Management (South) Limited)

13 Lalitha Healthcare Private Limited (''LHPL'')

14 Fortis Malar Hospitals Limited (''FMHL'')

15 Malar Stars Medicare Limited (''MSML'')

16 Escorts Heart Institute and Research Centre Limited (''EHIRCL'')

17 Fortis HealthStaff Limited (''FHSL'')

18 Fortis Asia Healthcare Pte Limited (''FAHPL'')

19 Fortis Healthcare International Pte Limited (''FHIPL'')

20 Fortis Healthcare Australia Pty Ltd (''FHAPL'') (upto October 22,2014)

21 Dental Corporation Holdings Limited (''DCHL'') (up to May 31, 2013)**

22 Dental Corporation Pty Limited (''DCPL'') (up to May 31, 2013)**

23 Dental Corporation Petrie Pty Ltd (up to May 31, 2013)**

24 Dental Corporation Levas Pty Ltd (up to May 31, 2013)**

25 D C Holdings WA Pty Ltd (up to May 31, 2013)**

26 Dental Care Network Pty Limited (up to May 31, 2013)**

27 Dental Corporation (NZ) Limited (up to May 31, 2013)**

28 Dental Corporation Cox Pty Ltd (up to May 31, 2013)**

29 Hazel Ridge Pty Limited (up to May 31, 2013)**

30 John M Levas Pty Limited (up to May 31, 2013)**

31 Scott Petrie Dental Pty Ltd (up to May 31, 2013)**

32 Larry Benge Pty Ltd (up to May 31, 2013)**

33 Dr Chris Hardwicke Pty Ltd (up to May 31, 2013)**

34 Fortis Healthcare Singapore Pte Ltd (''FHSPL'')

35 Radlink Asia Pte Limited (''RADLINK'')

36 Radlink Medicare Pte Limited (''RMPL'')

37 DRS Thompson & Thomson (Radlink Medicare) Pte Limited

38 Radlink Medicare (Bishan) Pte Limited

39 Radlink Medicare (Woodlands) Pte Limited

40 Radlink Medicare (Tampines) Pte Limited

41 Radlink Medicare (Jurong East) Pte Limited

42 Clinic 1866 Pte Limited

43 Radlink Diagnostic Imaging (S) Pte Limited (''RDISPL'')

44 Drs Lim Hoe & Wong Radiology Pte limited

45 Healthcare Diagnostic Services Pte Limited

46 Radlink Women & Fetal Imaging Centre Pte Limited

47 Radlink Pet & Cardiac Imaging Centre Pte Limited (''RADLINK PET'')

48 Singapore Radiopharmaceuticals Pte Limited

49 Singapore Molecular Therapy Centre Pte Limited

50 Altai Investments Limited (''ALTAI'') (up to October 24, 2013)****

51 Quality HealthCare Limited (''QHL'') (up to October 24, 2013)****

52 Quality HealthCare Hong Kong Limited (up to October 24, 2013)****

53 Green Apple Associates Limited (up to October 24, 2013)****

54 Quality HealthCare Medical Services Limited (up to October 24,2013)

55 Fortis HealthCare Hong Kong Limited (''Fortis Honkong'') (up to October 24, 2013)****

56 Quality Healthcare Medical Services (Macau) Limited (up to October 24, 2013)****

57 Quality HealthCare Chinese Medicine Limited (''QHCML'') (up to October 24, 2013)****

58 Marvellous Way Limited (up to October 24, 2013)****

59 Universal Lane Limited (''ULL'') (up to October 24, 2013)****

60 DB Health Services Limited (up to October 24, 2013)****

61 Quality HealthCare Medical Centre Limited (up to October 24,2013)***

62 Quality HealthCare Professional Services Limited (up to October 24, 2013)****

63 SmartLab Limited (up to October 24, 2013)****

64 GlobalRx Limited (up to October 24, 2013)****

65 Allied Medical Practices Guild Limited (up to October 24, 2013)****

66 Fortis Hospitals Hong Kong Limited (up to October 24, 2013)****

67 Normandy (Hong Kong) Limited (''NHKL'')(up to October 24, 2013)****

68 Great Option Limited (Hong Kong)(up to October 24, 2013)****

69 Healthcare Opportunities Limited (''HOL'')(up to October 24, 2013)****

70 TCM Products Limited (''TCM'')(up to October 24, 2013)****

71 GHC Holdings Limited (''GHC'')(up to October 24, 2013)****

72 Case Specialist Limited (up to October 24, 2013)****

73 Jadeast Limited (up to October 24, 2013)****

74 Jadefairs International Limited (up to October 24, 2013)****

75 Jadway International Limited (up to October 24, 2013)****

76 Megafaith International Limited (up to October 24, 2013)****

77 Jadison Investment Limited (up to October 24, 2013)****

78 Berkshire Group Limited (up to October 24, 2013)****

79 Central Medical Diagnostic Centre Limited (''CMDCL'') (up to October 24, 2013)****

80 Central MRI Centre Limited (up to October 24, 2013)****

81 Central Medical Laboratory Limited (up to October 24, 2013)****

82 Central PET/CT Scan Limited (up to October 24, 2013)****

83 Portex Limited (up to October 24, 2013)****

84 Quality HealthCare Services Limited (''QHCSL'')(up to October 24, 2013)****

85 Quality HealthCare Psycological Services Limited (''QHCPSL'') (up to October 24, 2013)****

86 Quality EAP (Macau) Limited (up to October 24, 2013)****

87 Quality HealthCare Dental Services Ltd (up to October 24, 2013)****

88 Quality HealthCare Physiotherapy Services Limited (up to October 24, 2013)****

89 Quality HealthCare Nursing Agency Limited (up to October 24, 2013)****

90 Dynamic People Group Limited (up to October 24, 2013)****

91 Mena Healthcare Investment Company Limited (''MHICL'')

92 SRL Diagnostics FZ-LLC (formerly known as Super Religare Laboratories International FZ LLC)

93 Swindon Limited (SL) (up to August 20, 2013)***

94 VOF PE Holdings 2 Limited (''VOFPEHL'')(up to August 20, 2013)***

95 Fortis Hoan My Medical Corporation (''HOAN'')(up to August 20, 2013)**

96 Fortis Hoan My Saigon General Hospital Joint Stock Company (''MY SAIGON'') (up to August 20, 2013)***

97 Hoan My Clinic Co. Ltd (up to August 20, 2013)***

98 Hoan My Da Nang General Hospital Joint Stock Company (up to August 20, 2013)***

99 Hue Hoan My General Hospital Joint Stock Company (up to August 20, 2013)***

100 Hoan My Cuu Long General Hospital Joint Stock Company (up to August 20, 2013)***

101 Hoan My Da Lat General Hospital Joint Stock Company (up to August 20, 2013)***

102 Fortis Healthcare Vietnam Company Limited (up to August 20, 2013)***

103 Medical Management Company Limited

104 Fortis Healthcare Middle East LLC (w.e.f. May 23, 2013)

105 Healthcare Clinic and Surgery Pte. Limited

106 Birdie & Birdie Realtors Private Limited (w.e.f. May 6, 2014)

107 Fortis CSR Foundation (w.e.f. September 22, 2014)

Companies (5) and (6) of above are subsidiaries of FHsL; Company (8) of above is subsidiary of SRL; Company (10) of above is a subsidiary of FHIL; Companies (12) and (14) and 106 of above are subsidiaries of FHsL; Company (13) of above is subsidiary of FCCL; Company (15) of above is a subsidiary of FMHL; Companies (17) and (18) of above are subsidiaries of EHIRCL; Company (19) of above is subsidiary of FAHPL; Company (20), (34), (50), (91), (92), (93), (94), (102) and (104) of above are subsidiaries of FHIPL; Company (21) of above was subsidiary of FHAPL; Company (22) of above was subsidiary of DCHL; Companies (23) to (33) of above were subsidiaries of DCPL; Company (35) of above is subsidiary of FHSPL; Companies (36) and (43) of above are subsidiaries of RADLINK; Companies (37) to (42) and 105 of above are subsidiaries of RMPL; Companies (44) to (47) of above are subsidiaries of RDISPL; Companies (48) and (49) of above are subsidiaries of RADLINK PET; Companies (51), (54), (55), (83) and (84) of above were subsidiaries of ALTAI; Companies (52) and (53) of above were subsidiaries of QHL; Companies (56), (57), (59), (61) to (67), (69), (78) and (79) of above were subsidiaries of Fortis Honkong; Company (58) of above was subsidiary of QHCML; Company (60) of above was subsidiary of ULL; Company (68) of above was subsidiary of NHKL; Company (70) of above was subsidiary of HOL; Company (71) of above was subsidiary of TCM; Companies (72) to (77) of above were subsidiaries of GHC; Companies (80) to (82) of above were subsidiaries of CMDCL; Companies (85) and (87) to (90) of above were subsidiaries of QHCSL; Company (86) of above was subsidiary of QHCPSL; Company (97) of above was subsidiary of VOFPEHL; Companies (96), (98), (100) and (101) of above were subsidiaries of HOAN; Company (97) of above was subsidiary of MY SAIGON; Company (103) of above is subsidiary of MHICL; Company (99) of above was a subsidiary of Company (98) of above.

Fellow Subsidiaries (with whom transactions have been taken place)

(a) RWL Healthworld Limited (formerly as Religare Wellness Limited)

(b) Medsource Healthcare Private Limited

Associates (with whom transactions have been taken place)

(a) Sunrise Medicare Private Limited

(b) Medical and Surgical Centre Limited, Mauritius (Associate of Fortis Healthcare International Limited)

(c) International Hospital Limited (''IHL'')******

(d) Escorts Heart and Super Speciality Institute Limited(''EHSSIL'')*****

(e) Escorts Heart and Super Speciality Hospital Limited (''EHSSHL'')

(f) Fortis Emergency Services Limited (''FESL'') (Associate of Fortis Hospitals Limited)

(g) Fortis Health Management Limited (''FHML'')

(h) Fortis Medicare International Limited (''FMIL'')

Joint Ventures

(a) Super Religare Reference Laboratories (Nepal) Private Limited (Joint venture of SRL)

(b) DDRC SRL Diagnostics Services Private Limited (Joint venture of SRLDPL)

(c) Fortis Cauvery, Partnership firm (Joint venture of FCCL)

Key Management Personnel ( KMP )

(a) Mr. Malvinder Mohan Singh - Executive Chairman

(b) Mr. Shivinder Mohan Singh - Executive Vice Chairman

(c) Mr. Balinder Singh Dhillon- Executive Director (upto February 11, 2014)

(d) Mr. Gagandeep Singh Bedi - Chief Financial Officer (w.e.f September 23, 2014)

(e) Mr. Sandeep Puri - Chief Financial Officer (upto September 24,2014)

(f) Mr. Aditya Vij- Chief Executive Officer (upto December 31, 2014)

(g) Mr. Rahul Ranjan - Company Secretary

(h) Mrs. Ritu Vij - Relative of KMP (upto December 31, 2014)

(i) Dr. Brian William Tempest - Non-Executive Director

(j) Mr. Gurcharan Das - Non-Executive Director (upto September 24,2014)

(k) Mr. Harpal Singh - Non-Executive Director

(l) Ms. Joji Sekhon Gill - Non-Executive Director

(m) Ms. Lynette Joy Hepburn Brown - Non-Executive Director (w.e.f. May 29, 2014)

(n) Mr. Pradeep Ratilal Raniga - Non-Executive Director

(o) Dr. Preetinder Singh Joshi - Non-Executive Director

(p) Mr. Ravi Umesh Mehrotra - Non-Executive Director (w.e.f. March 26, 2015)

(q) Ms. Shradha Suri Marwah - Non-Executive Director (w.e.f. March 26, 2015)

(r) Mr. Sunil Godhwani - Non-Executive Director

Enterprises owned or significantly influenced by key management personnel (KMP) or their relatives (with whom transactions have been taken place)

(a) Fortis Nursing and Education Society

(b) Ligare Travel Limited (formerly known as Religare Travels(India) Limited)

(c) Ligare Aviation Limited (formerly known as Religare Aviation Limited)

(d) Dion Global Solutions Limited

3. Leases

(a) Assets taken on Operating Lease:

Hospital/ Office premises, few medical equipments and other premises are obtained on operating lease. In all the cases, the agreements are further renewable at the option of the Company. There is no escalation clause in the respective lease agreements. For all cases, there are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency. The total lease payments in respect of such leases recognised in the statement of profit and loss for the year are Rs. 1,049.96 lacs (Previous year Rs. 2,670.62 lacs) and capitalized during the year are Rs. 1,212.24 lacs (Previous year Rs. 1,341.99 lacs).

(b) Assets given on Operating Lease

i) The Company has sub-leased some portion of hospital premises. In all the cases, the agreements are further renewable at the option of the Company. There is no escalation clause in the respective lease agreements. There are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency. All these leases are cancellable in nature. The total lease income received / receivable in respect of the above lease recognised in the statement of profit and loss for the year are Rs. 26.32 lacs (Previous year Rs. 116.76 lacs).

ii) The Company has leased out certain capital assets on operating lease to a Trust managing hospital operations. The lease term is for 3 years and thereafter renewable at the option of the lessor. There are no restrictions imposed by the lease arrangements and the rent is not determined based on any contingency. There is no escalation clause in the lease agreements. The lease arrangement is non-cancellable in nature. The details of the capital assets given on operating lease are as under:

4. Commitments:

(a) Going concern support in form of funding and operational support letters issued by the Company in favour of FLFL, FCCL, FHSL, Fortis C-Doc Healthcare Limited, FHMEL, LHPL, FAHPL, Birdie & Birdie Realtors Private Limited.

(b) For commitments relating to lease arrangements, refer note 6.

5. Contingent liabilities (not provided for) in respect of:

(Rs. in lacs)

Particulars As at As at March 31, March 31 2015 2014

Claims against the Company not acknowledged 1,319.13 796.68 as debts (in respect of compensation demanded by the patients/their relatives for negligence) The cases are pending with various Consumer Disputes Redressal Commissions. Based on expert opinion obtained, the management believes that the Company has good chance of success in these cases.

The Company is under litigation with the Income 501.41 579.02 Tax Department against certain income tax demands on account of deduction of tax under section 194J of Income Tax Act, 1961 instead of section 192 on payments made to retainer doctors, u/s 201(1)/201 (1A)for the assessment years 2010-11, 2011-12, 2012-13 and 2013-14, thereby raising demands of Rs. 239.92 lacs (Previous year Rs. 239.92lacs) Rs. 261.49 lacs (Previous year Rs. 261.49 lacs), Rs. 20.87 lacs(Previous year Rs. 77.61 lacs) and Rs. 23.86 lacs (Previous year Nil) respectively. Company had filed appeals with the Commissioner of Income Tax (Appeals), Chandigarh which passed order in favour of the Company for all assessment years. Department has filed further appeal to the Income Tax Appellate Tribunal (ITAT) for assessment years 2010-11 and 2011-12, which is pending for disposal. Based on management assessment, Company believes that it has good chance of success in these cases.

The Excise & Taxation Commissioner cum Designated - 1,412.35 Officer-Mohali had passed an assessment order dated October 08, 2013 under Punjab Value Added Tax Act, 2005 (''PVAT'') thereby raising a demand of Rs. 1,412.35 lacs (including penalty Rs. 741.39 lacs and interest of Rs. 300.26 lacs) holding that the assessee was liable to pay tax on the medical consumables used on in-patients and out-patients and has contravened the provisions of Section 29(2) of PVAT. Company is in appeal before the Hon''ble High Court of Punjab and Haryana against the aforesaid order of Deputy Excise & Taxation Commissioner. Hon''ble High Court admitted appeal filed by the Company and further, granted stays on assessment order vide its order dated January 15, 2014. During the current year, Hon''ble High Court of Punjab and Haryana has been decided the case in favour of the Company.

The Commissioner of Service-tax, Chandigarh has 265.47 215.34 passed an Order dated March 14, 2014 under Service-tax Act alleging that assessee is liable to pay service-tax on support services of business or commerce provided to doctors, thereby raising demand of Rs. 215.34 lacs (Previous year Rs. 215.34 lacs) and Rs. 50.14 lacs (Previous year Nil) for financial years 2007-08 to 2011-12 and 2012-13 respectively. The Company has filed an appeal with Central Excise and Service Tax Appellate Tribunal, which is pending for disposal. Based on management assessment, Company believes that it has good chance of success in these cases.

The Company is under litigation with the Income 332.08 - Tax Department against income tax demand on account of disallowance u/s 14A, disallowance of credit card expenditure, disallowance of foreign travelling expenses and interest income not offered to tax for assessment year 2012-13. Based on management assessment, Company believes that it has good chance of success in this case.

Service Tax Department issued notice alleging 294.35 - therein that one of the Hospital of the Company is providing services of infrastructure and administrative support to Vendors and thus, is liable to pay service-tax on amounts retained from doctors'' fees for the financial years 2008-09 to 2011-12 The Company has filed an appeal with Central Excise and Service Tax Appellate Tribunal, which is pending for disposal. Based on management assessment, Company believes that it has good chance of success in these cases.

(Rs. in lacs)

Particulars As at As at March 31, March 31 2015 2014

Corporate guarantee given to financial institutions/ banks in respect of financial assistance availed by subsidiaries and associates of the Company. None of the corporate guarantee have been evoked by the Banks/Financial institutions during the year as the subsidiaries and associates of the Company have complied with the loan covenants.

- Axis Bank 7,751.00 13,251.00

- Royal Bank of Scotland 1,500.00 1,500.00

- HDFC Bank Limited 22,000.00 14,000.00

- GE Money Financial Services Private Ltd - 14,500.00

- GE Capital Services India Ltd - 5,000.00

- ICICI Bank Ltd 20,000.00 20,000.00

Others - 6.47

6. Employee Stock Option Plan

The Company has provided share-based payment scheme to the eligible employees and directors of the Company/ its subsidiaries and holding Company. During the year ended March 31, 2008, 458,500 options (Grant I) were granted to the employees under Plan ''A''. Under the same plan, 33,500 options (Grant II) were granted to the employees during the year ended March 31, 2009, 763,700 options (Grant III) were granted during the year ended March 31, 2010, 1,302,250 options (Grant IV) were granted during the year ended March 31, 2011 and 200,000 options (Grant V) were granted during the year ended March 31, 2012.Under plan ''B'', 4,050,000 options (Grant VI) were granted to employees during the year ended March 31, 2013, 3,715,000 option (Grant VII) were granted during the year ended March 31, 2014 and 240,000 options (Grant VIII) were granted during the current year. The Company has granted these options under Equity Settlement method and there are no conditions for vesting other than continued employment with the Company.

7. Disclosures under Accounting Standard - 15 (Revised) on ''Employee Benefits'':

Defined Benefit Plan

The Company has a defined benefit gratuity plan, where under employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The following table summarizes the components of net benefit expenses recognised in the statement of profit and loss and the amounts recognized in the balance sheet.

8. The Company has entered into ''Operation and Management'' agreement with entities which are into hospital operations, in terms of which, the Company is responsible for developing and providing maintenance support and related services necessary to support, manage and maintain the hospital as may be required. The management fee in this case is generally based on gross billing of the hospital subject to certain conditions as per the underlying agreement. The gross billing of the hospital is considered based on the unaudited financial statements of the respective entity. The management does not anticipate any material changes in the amounts considered in financial statements.

9. As part of Sponsor Agreement entered between The Trustee-Manager of Religare Health Trust, Fortis Global Healthcare Infrastructure Pte. Limited and Hospital Service Companies (collectively referred as ''Indemnified parties'') with the Company, the Company has provided following indemnities:-

i) To RHT and its directors, officers, employees and agents under the relevant transaction agreements against any losses or liabilities finally determined as payable for any breach of the Consolidated Foreign Direct Investment (FDI) Policy or Foreign Exchange Management Act (''FEMA''), to the extent that such breach has resulted from the acquisition by RHT of the Hospital Services Companies.

Further, the Company has undertaken to transfer or procure additional medical and healthcare services to Hospital Services Companies in the event that any regulatory authority raises concerns over compliance with any applicable law.

However, the Company will not be liable to indemnify the Indemnified Parties for any losses resulting from delay or failure of the Indemnified Parties in completing any statutory filings or similar formalities under the Consolidated FDI Policy, FEMA and other laws in force in India as of the Listing Date i.e. October 19, 2012, required to be undertaken by the Indemnified Parties in relation to the acquisition by RHT or FGHIPL of the equity shares of the Hospital Services Companies.

The Company''s obligations under this indemnity shall continue so long as the Company or the Group holds 15.0% or more of the total units from time to time issued in RHT or three years from the Listing Date, whichever is later.

However, the Company will be liable in respect of the indemnity for a maximum period of five years from the Listing Date.

ii) The Company has also undertaken to indemnify ("Tax Indemnity") each of the Hospital Services Companies and their respective directors, officers, employees and agents (the "Investing Parties") against tax liabilities (including interest and penalties levied in accordance with the Income tax Act and any cost in relation thereto) which these Investing Parties may incur due to the non-allowance of interest on Compulsorily Convertible Debentures (CCDs) or Optionally Convertible Debentures (OCDs) in the hands of the Hospital service Companies.

iii) Further, as per terms of the various Agreements entered into between Hospital Services Companies and Fortis Operating companies, the Hospital Services Companies have right to recover certain statutory dues levied on them from Fortis Operating Companies. There is a possible present obligation on Hospital Services Companies to collect certain statutory dues from the Fortis Operating Companies and pay it to the relevant authorities. In view of uncertainty arising from interpretation of the regulations, management believes that value of such statutory dues cannot be measured reliably and therefore has not been considered in these financial statements.

10. On January, 9 2012, FHML entered into Share Purchase Agreement with the company to acquire its 49% interest in FHTL at an aggregate consideration of Rs. 37,728.39 lacs. FHTL is the owner of Shalimar Bagh Clinical Establishment and Gurgaon Clinical Establishment. FHML on September 17, 2012 entered into Shareholders'' Agreement with the Company, pursuant to which FHML has a call option over the Company''s 51% interest in FHTL ("FHTL Call Option") at a fixed price, subject to fulfillment of certain conditions, applicable laws including, and receipt of necessary approvals from all third parties. FHML also has the right to appoint 50% of the directors of FHTL, including the chairman of the board of directors who will have the casting vote in case of deadlock on any matter, including all financial and operating policies of the Company, brought to the board of directors for its approval. Additionally, the Company has assigned its right to receive dividends from FHTL in favour of FHML. In addition, FHML has a put option on its 49% interest in FHTL ("FHTL Put Option"), exercisable if FHML is unable to acquire 100% of the issued and paid-up share capital FHTL within 5 years from the date of transfer of the 49% shareholding of FHTL by the Company to FHML, for any reason outside the control of FHML. The put option shall be exercised at a price that is equal to the fair market value of Put Securities on the date of exercise of put option, determined on a discounted cash flow basis.

11. During the year ended March 31, 2013, Escorts Heart Institute and Research Centre Limited (''EHIRCL'') have issued 401,769 Compulsorily Convertible Preference Shares (''CCPS'') of face value of Rs. 10 each at a premium of Rs. 7,456.98 per CCPS to Kanishka Healthcare Limited (''KHL'') with a maturity period of 15 years aggregating to Rs. 30,000 lacs. Following are the key terms of CCPS:-

a) CCPS Put Option - KHL is entitled to exercise an unconditional and irrevocable right to require the Company or its nominee to buy all of CCPS upon occurrence of KHL having exercised FHTL Put Option or FHTL Call Option under shareholders agreement entered between the Company, FHTL and FHML, as per above.

b) Under FHTL call Option the Company is required to pay sum equal to the fair valuation of Equity Shares of EHIRCL as per DCF Method.

c) In case of FHTL put option Company has right to purchase, subject to due compliance with law, all CCPS at consideration equal to KHL''s contribution along with coupon rate agreed.

12. During the year ended March 31, 2011, the Company had issued 1,000 5% Foreign Currency Convertible Bonds of US Dollar 100,000 each aggregating to US Dollar 100,000,000 due 2015 (the "Bonds"). These Bonds are listed on the Euro MTF market of the Luxembourg Stock Exchange. The Bonds are convertible at the option of the holder at any time on or after May 18, 2013 (or such earlier date as is notified to the holders of the Bonds by the Company) up to May 11, 2015 into fully paid equity shares with full voting rights at par value of Rs. 10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs. 167 with 26,922.1557 shares being issued per Bond with a fixed rate of exchange on conversion of Rs. 44.96 = US Dollar 1.00. The Conversion Price is subject to adjustment in certain circumstances.

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Subject to the prior approval of the RBI (or any other statutory or regulatory authority under applicable laws and regulations of India) if required, the Bonds may be redeemed, in whole but not in part, at the option of the Company at any time on or after 18 May 2013 (subject to the Company having given at least 30 days'' notice) at 100 percent of their aggregate principal amount plus accrued but unpaid interest if the closing price of the Shares on each trading day with respect to the shares for a period of at least 30 consecutive such trading days is equal to or greater than 130 per cent of the Accreted Conversion Price (as defined in the terms and conditions of the Bonds).

The Bonds may also be redeemed in whole, but not in part, at the option of the Company subject to satisfaction of certain conditions including obtaining Reserve Bank of India ("RBI") approval, at certain early redemption amount, as specified, on the date fixed for redemption in the event of certain changes relating to taxation in India.

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on May 18, 2015 at 103.1681 per cent of its principal amount. Management has reassessed the probability for conversion of bonds into equity and is of the opinion that it is unlikely that conversion option will be availed by the bondholders. On account of the same, the Company has utilized Securities premium account and provided for the proportionate premium on redemption for the period up to March 31, 2015 amounting to Rs. 1,922.85 lacs (Previous year Rs. 1,472.10 lacs). These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

Exchange Rate at March 31, 2015 considered for restatement of the Bonds at the year end was Rs. 62.33553= US Dollar 1 (Rs. 60.059349= US Dollar 1 at March 31, 2014).

Subsequent to the end of current year, the Bonds have been fully redeemed on the due date as per aforesaid terms.

13. During the year ended March 31, 2014, the Company issued 150 Foreign Currency Convertible Bonds aggregating to US Dollar 30,000,000 due 2018 (the "Bonds") at the rate of (4.66% LIBOR). These Bonds are listed on the Singapore Exchange Securities Trading Limited (the "SGX-ST").

The Bonds are convertible upto US Dollar 24,000,000 of principal amount at the option of the holder at any time on or after September 17, 2013 (or such earlier date as is notified to the holders of the Bonds by the Company) up to August 01, 2018 into fully paid equity shares with full voting rights at par value of Rs. 10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs. 99.09 with 1,204.71 shares being issued per Bond with a fixed rate of exchange on conversion of Rs. 59.6875 = US Dollar 1.00. The Conversion Price is subject to adjustment in certain circumstances.

Subject to certain conditions, the Bonds may be converted mandatorily into fully paid equity shares, 20% of the principal amount of bond outstanding (but in no event exceeding US Dollar 6,000,000 in aggregate principal amount of Bonds), at the option of the Company at any time on or after September 17, 2013 up to August 01, 2018 at the Partial Reset Conversion Price (as defined in the "Terms & Conditions of the Bonds").

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on August 08, 2018 at 100 per cent of its principal amount. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

The Company has incurred expenses of Rs. 542.62 lacs (including Rs. 24.72 lacs paid to Auditors) in connection with this issue.

The proceeds of the issue amounting to Rs. 18,390.74 lacs have been used for repayment of debts.

Exchange Rate at March 31, 2015 considered for restatement of the Bonds at the year end was Rs. 62.33553= US Dollar 1 (Rs. 60.059349= US Dollar 1 at March 31, 2014).

14. During the year ended March 31, 2014, the Company issued 550 Foreign Currency Convertible Bonds of US Dollar 100,000 each aggregating to US Dollar 55,000,000 due 2018 (the "Bonds") at the rate of LIBOR 4.86%. The Bonds are convertible at the option of International Finance Corporation ("IFC"), an international organization established by Articles of Agreement among its member countries including the Republic of India (the holder) giving 7 days notice to the Company at any time on or after June 07, 2013 up to June 08, 2018 into fully paid equity shares with full voting rights at par value of Rs. 10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs.99.09 and number of shares to be issued will be calculated on conversion on the basis of applicable rate of exchange of US Dollar and '' on conversion date. The Conversion Price is subject to adjustment in certain circumstances.

The Bonds may be converted on the request of the holder but not less than value of US Dollar 5,000,000 or in multiple of US Dollar 1,000,000 thereafter. Except in certain condition mentioned in the "Terms & Conditions of the Bonds" the holder cannot exercise the Conversion Option in part or in full in respect of twenty per cent (20%) of the original bond value for a period of three (3) years after the Subscription Date.

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Subject to the prior approval of the RBI (or any other statutory or regulatory authority under applicable laws and regulations of India) if required, the Bonds may be converted mandatorily into fully paid equity shares, 20% of the principal amount of bond at the option of the Company at any time on or after June 07, 2013 at Modified Conversion Price (as defined in the "Terms & Conditions of the Bonds").

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on June 08, 2018 at 100 per cent of its principal amount. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

Exchange Rate at March 31, 2015 considered for restatement of the Bonds at the year end was Rs. 62.33553= US Dollar 1 (Rs. 60.059349= US Dollar 1 at March 31, 2014).

15. During the year ended March 31, 2013, the Company initiated an institutional placement programme (IPP) for issuance of equity share of the Company. The issue was authorised by the Board of Directors through circular resolutions dated November 27, 2012 and by the Company''s shareholders through a special resolution passed by way of postal ballot the result whereof was announced on January 15, 2013.

16. During the year ended March 31, 2014, the Board of Directors of the Company, through its resolution dated April 24, 2013, authorised the issuance of up to 28,610,355 Equity Shares to International Finance Corporation through a preferential allotment. Subsequently, on June 6, 2013, the Company issued and allotted 18,833,700 equity shares to International Finance Corporation at Rs. 99.09 per share including premium of Rs. 89.09 per share aggregating to Rs. 18,662.31 lacs.

17. During the year ended March 31, 2014, the shareholders of the Company, through its special resolution dated August 22, 2013, authorized the issuance of 3,737,449 Equity shares to Standard Chartered Private Equity (Mauritius) III Limited through a preferential allotment. Subsequently, on September 5, 2013, the Company issued and allotted 3,737,449 equity shares to Standard Chartered Private Equity (Mauritius) III Limited at Rs. 99.09 per share including premium of Rs. 89.09 per share aggregating to Rs. 3,703.44 lacs.

18. Details of dues to Micro and Small Enterprises as per MSMED Act, 2006

During the period ended December 31, 2006, Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development Act, 2006 which comes into force with effect from October 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The management has confirmed that none of the suppliers have confirmed that they are registered under the provision of the Act. In view of this, the liability of the interest and disclosure are not required to be disclosed in the financial statements.

19. Previous Year Figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2014

1. Nature of Operations

Fortis Healthcare Limited (the ''Company'' or ''FHL'') was incorporated in the year 1996 and commenced its hospital operations in the year 2001. As part of its business activities, the Company holds interests in its subsidiaries, joint ventures and associate companies through which it manages and operates a network of multi-specialty hospitals. The Company''s equity shares are listed on both Bombay Stock Exchange and National Stock Exchange. The Company''s foreign currency convertible bonds are listed on the Euro MTF market of the Luxembourg Stock Exchange and 4.66% LIBOR foreign currency convertible bonds are listed on the Singapore Exchange Securities Trading Limited (the "SGX-ST").

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Related party disclosures

Names of related parties and related party relationship

Ultimate Holding Company

RHC Holding Private Limited (Holding Company of Fortis Healthcare Holdings Private Limited)

Holding Company

Fortis Healthcare Holdings Private Limited (''FHHPL'')

Subsidiary Companies - direct or indirect through investment in subsidiaries

1 Fortis Hospotel Limited (''FHTL'') (refer note 16)

2 Hiranandani Healthcare Private Limited (''HHPL'')

3 Fortis Health Management (West) Limited (''FHMWL'')

4 Fortis Health Management (North) Limited (''FHMNL'')*****

5 Fortis C-Doc Healthcare Limited (''C-Doc'')

6 Fortis Health Management (East) Limited (''FHMEL'')

7 SRL Limited (''SRL'')

8 SRL Diagnostics Private Limited (''SRLDPL'')

9 Fortis Healthcare International Limited (''FHIL'')

10 Fortis Global Healthcare (Mauritius) Limited (''FGHML'')

11 Fortis Hospitals Limited (''FHsL'')

12 Fortis Health Management (South) Limited (''FHMSL'')

13 Lalitha Healthcare Private Limited (''LHPL'')

14 Fortis Malar Hospitals Limited (''FMHL'')

15 Malar Stars Medicare Limited (''MSML'')

16 Escorts Heart Institute And Research Centre Limited (''EHIRCL'')

17 Fortis HealthStaff Limited (''FHSL'')

18 Fortis Asia Healthcare Pte Limited (''FAHPL'')

19 Fortis Healthcare International Pte Limited (''FHIPL'')

20 Fortis Healthcare Australia Pty Ltd (''FHAPL'')

21 Dental Corporation Holdings Limited (''DCHL'') (up to May 31, 2013)**

22 Dental Corporation Pty Limited (''DCPL'') (up to May 31, 2013)**

23 Dental Corporation Petrie Pty Ltd (up to May 31, 2013)**

24 Dental Corporation Levas Pty Ltd (up to May 31, 2013)**

25 D C Holdings WA Pty Ltd (up to May 31, 2013)**

26 Dental Care Network Pty Limited (up to May 31, 2013)**

27 Dental Corporation (NZ) Limited (up to May 31, 2013)**

28 Dental Corporation Cox Pty Ltd (up to May 31, 2013)**

29 Hazel Ridge Pty Limited (up to May 31, 2013)**

30 John M Levas Pty Limited (up to May 31, 2013)**

31 Scott Petrie Dental Pty Ltd (up to May 31, 2013)**

32 Larry Benge Pty Ltd (up to May 31, 2013)**

33 Dr Chris Hardwicke Pty Ltd (up to May 31, 2013)**

34 Fortis Healthcare Singapore Pte Ltd (''FHSPL'')

35 Radlink Asia Pte Limited (Radlink) (''RADLINK'')

36 Radlink Medicare Pte Limited (''RMPL'')

37 DRS Thompson & Thomson (Radlink Medicare) Pte Limited

38 Radlink Medicare (Bishan) Pte Limited

39 Radlink Medicare (Woodlands) Pte Limited

40 Radlink Medicare (Tampines) Pte Limited

41 Radlink Medicare (Jurong East) Pte Limited

42 Clinic 1866 Pte Limited

43 Radlink Diagnostic Imaging (S) Pte Limited (''RDISPL'')

44 Drs Lim Hoe & Wong Radiology Pte limited

45 Healthcare Diagnostic Services Pte Limited

46 Radlink Women & Fetal Imaging Centre Pte Limited

47 Radlink Pet & Cardiac Imaging Centre Pte Limited (''RADLINK PET)

48 Singapore Radiopharmaceuticals Pte Limited

49 Sinagpore Molecular Therapy Centre Pte Limited

50 Altai Investments Limited (ALTAI) (up to October 24, 2013)****

51 Quality HealthCare Limited (''QHL'') (up to October 24, 2013)****

52 Quality HealthCare Hong Kong Limited (up to October 24, 2013)****

53 Green Apple Associates Limited (up to October 24, 2013)****

54 Quality HealthCare Medical Services Limited (up to October 24, 2013)****

55 Fortis HealthCare Hong Kong Limited (''Fortis Honkong) (up to October 24, 2013)****

56 Quality Healthcare Medical Services (Macau) Limited (up to October 24, 2013)****

57 Quality HealthCare Chinese Medicine Limited (''QHCML'') (up to October 24, 2013)****

58 Marvellous Way Limited (up to October 24, 2013)****

59 Universal Lane Limited (''ULL'') (up to October 24, 2013)****

60 DB Health Services Limited (up to October 24, 2013)****

61 Quality HealthCare Medical Centre Limited (up to October

24, 2013)****

62 Quality HealthCare Professional Services Limited (up to October 24, 2013)****

63 SmartLab Limited (up to October 24, 2013)****

64 GlobalRx Limited (up to October 24, 2013)****

65 Allied Medical Practices Guild Limited (up to October 24, 2013)****

66 Fortis Hospitals Hong Kong Limited (up to October 24,

2013)****

67 Normandy (Hong Kong) Limited (''NHKL'') (up to October 24, 2013)****

68 Great Option Limited (Hong Kong) (up to October 24, 2013)****

69 Healthcare Opportunities Limited (''HOL'') (up to October 24, 2013)****

70 TCM Products Limited (''TCM'') (up to October 24, 2013)****

71 GHC Holdings Limited (''GHC'') (up to October 24, 2013)****

72 Case Specialist Limited (up to October 24, 2013)****

73 Jadeast Limited (up to October 24, 2013)****

74 Jadefairs International Limited (up to October 24, 2013)****

75 Jadway International Limited (up to October 24, 2013)****

76 Megafaith International Limited (up to October 24, 2013)****

77 Jadison Investment Limited (up to October 24, 2013)****

78 Berkshire Group Limited (up to October 24, 2013)****

79 Central Medical Diagnostic Centre Limited (''CMDCL'') (up to October 24, 2013)****

80 Central MRI Centre Limited (up to October 24, 2013)****

81 Central Medical Laboratory Limited (up to October 24,

2013)****

82 Central PET/CT Scan Limited (up to October 24, 2013)****

83 Portex Limited (up to October 24, 2013)****

84 Quality HealthCare Services Limited (''QHCSL'') (up to October 24, 2013)****

85 Quality HealthCare Psycological Services Limited (''QHCPSL'') (up to October 24, 2013)****

86 Quality EAP (Macau) Limited (up to October 24, 2013)****

87 Quality HealthCare Dental Services Ltd (up to October 24,

2013)****

88 Quality HealthCare Physiotherapy Services Limited (up to October 24, 2013)****

89 Quality HealthCare Nursing Agency Limited (up to October 24, 2013)****

90 Dynamic People Group Limited (up to October 24, 2013)****

91 Mena Healthcare Investment Company Limited (''MHICL'')

92 Super Religare Laboratories International FZ LLC

93 Swindon Limited (SL) (up to August 20, 2013)***

94 VOF PE Holdings 2 Limited (''VOFPEHL'') (up to August 20, 2013)***

95 Fortis Hoan My Medical Corporation (''HOAN'') (up to August 20, 2013)***

96 Fortis Hoan My Saigon General Hospital Joint Stock Company (''MY SAIGON'') (up to August 20, 2013)***

97 Hoan My Clinic Co. Ltd (up to August 20, 2013)***

98 Hoan My Da Nang General Hospital Joint Stock Company (up to August 20, 2013)***

99 Hue Hoan My General Hospital Joint Stock Company (up to August 20, 2013)***

100 Hoan My Cuu Long General Hospital Joint Stock Company (up to August 20, 2013)***

101 Hoan My Da Lat General Hospital Joint Stock Company (up to August 20, 2013)***

102 Fortis Healthcare Vietnam Company Limited (up to August 20, 2013)***

103 Medical Management Company Limited

104 Religare Health Trust (RHT)* (up to October 19, 2012)

105 International Hospital Limited (IHL)* (up to October 19, 2012)

106 Escorts Heart and Super Speciality Institute Limited (EHSSIL)* (up to October 19, 2012)

107 Escorts Hospital and Research Centre Limited (EHRCL)* (up to October 19, 2012)

108 Escorts Heart and Super Speciality Hospital Limited (EHSSHL)* (up to October 19, 2012)

109 Kanishka Healthcare Limited (KHL)* (up to October 19, 2012)

110 Fortis Global Healthcare Infrastructure Pte. Limited (FGHIPL)* (up to October 19, 2012)

111 Hospitalia Eastern Private Limited (HEPL)* (up to October 19, 2012)

112 Fortis Healthcare Middle East LLC

113 Healthcare Clinic and Surgery Pte. Limited

Companies (5) and (6) of above are subsidiaries of FHsL; Company (8) of above is subsidiary of SRL; Company (10) of above is a subsidiary of FHIL; Companies (12) and (14) of above are subsidiaries of FHsL; Company (13) of above is subsidiary of FHMSL; Company (15) above is a subsidiary of FMHL; Companies (17) and (18) are subsidiaries of EHIRCL; Company (19) of above is subsidiary of FAHPL; Company (20), (34), (50), (91), (92), (93), (94), (102) and (112) of above are subsidiaries of FHIPL; Company (21) of above is subsidiary of FHAPL; Company (22) of above is subsidiary of DCHL; Companies (23) to (33) of above are subsidiaries of DCPL; Company (35) of above is subsidiary of FHSPL; Companies (36) and (43) of above are subsidiaries of RADLINK; Companies (37) to (42) of above are subsidiaries of RMPL; Companies (44) to (47) of above are subsidiaries of RDISPL; Companies (48) and (49) of above are subsidiaries of RADLINK PET; Companies (51), (54), (55), (83) and (84) of above are subsidiaries of ALTAI; Companies (52) and (53) are subsidiaries of QHL; Companies (56), (57), (59), (61) to (67), (69), (78) and (79) are subsidiaries of FORTIS HONKONG; Company (58) of above is subsidiary of QHCML; Company (60) of above is subsidiary of ULL; Company (68) of above is subsidiary of NHKL; Company (70) of above is subsidiary of HOL; Company (71) of above is subsidiary of TCM; Companies (72) to (77) of above are subsidiaries of GHC; Companies (80) to (82) are subsidiaries of CMDCL; Companies (85) and (87) to (90) are subsidiaries of QHCSL; Company (86) of above is subsidiary of QHCPSL; Company (97) of above is subsidiary of VOFPEHL; Companies (96), (98), (100) and (101) are subsidiaries of HOAN; Company (97) of above is subsidiary of My SAIGON; Company (103) of above is subsidiary of MHICL; Company (99) of above is a subsidiary of Company (98).

Fellow Subsidiary (with whom transactions have been taken place)

Religare Wellness Limited

Associates

a) Sunrise Medicare Private Limited

b) Fortis Hospital Management Limited

c) Medical and Surgical Centre Limited, Mauritius (Associate of Fortis Healthcare International Limited)

d) Religare Health Trust (RHT)* (Associate of Fortis Healthcare International Limited)

e) Fortis Medicare International Limited (Associate of Fortis Healthcare International Limited)

f) Lanka Hospitals Corporation PLC (Associate of Fortis Healthcare International Pte. Limited)

g) Town Hall Clinic (Associate of Fortis Healthcare Singapore Pte. Limited)

h) Hoan My Minh Hai General Hospital Joint Stock Company (Associate of SL and VOFPEHL) (up to August 20, 2013)***

i) Hoan My Orb Corporation (Associate of SL and

VOFPEHL) (up to August 20, 2013)*** j) International Hospital Limited (IHL)*

k) Escorts Heart and Super Speciality Institute Limited

(EHSSIL)* l) Escorts Hospital and Research Centre Limited (EHRCL)*

m) Escorts Heart and Super Speciality Hospital Limited (EHSSHL)*

n) Kanishka Healthcare Limited (KHL)* o) Fortis Global Healthcare Infrastructure Pte. Limited (FGHIPL)*

p) Hospitalia Eastern Private Limited (HEPL)* r) Fortis Emergency Services Limited

Joint Ventures

a) Super Religare Reference Laboratories (Nepal) Private Limited (Joint venture of SRL)

b) DDRC SRL Diagnostics Services Private Limited (Joint venture of SRLDPL)

c) Fortis Cauvery, Partnership firm (Joint venture of FHMSL)

Key Management Personnel (''KMP'')

Mr. Malvinder Mohan Singh – Executive Chairman

Mr. Shivinder Mohan Singh - Executive Vice Chairman

Mr. Balinder Singh Dhillon - Executive Director (up to February 11, 2014)

Enterprises owned or significantly influenced by key management personnel or their relatives

a) Religare Capital Market Plc.

b) Fortis Nursing and Education Society

c) Ligare Travels Limited

d) Religare Technova IT Services Limited

e) Oscar Investments Limited

f) Ligare Aviation Limited (Formerly "Religare Aviation Limited")

g) Malav Holdings Limited h) Shivi Holdings Limited

i) Religare Voyages Business Services Pvt Limited

j) Religare Technologies Limited

k) Religare Capital Market Limited

4 Leases

(a) Assets taken on Operating Lease:

Hospital/ Office premises and few medical equipments are obtained on operating lease. In all the cases, the agreements are further renewable at the option of the Company. There is no escalation clause in the respective lease agreements. For all cases, there are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency. The total lease payments in respect of such leases recognised in the statement of profit and loss for the year are Rs. 2,670.62 lacs (Previous year Rs. 1,737.93 lacs) and capitalized during the year are Rs. 1,341.99 lacs (Previous year Rs. 1,345.44 lacs).

(b) Assets given on Operating Lease

i) The Company has sub- leased some portion of hospital premises. In all the cases, the agreements are further renewable at the option of the Company. There is no escalation clause in the respective lease agreements. There are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency. All these leases are cancellable in nature. The total lease income received / receivable in respect of the above leases recognised in the statement of profit and loss for the year are Rs. 116.76 lacs (Previous year Rs. 105.45 lacs).

5. Long term borrowings (i) Secured Loans

Term Loan from L&T Infrastructure Finance Company Limited ("lender") was taken in financial year 2011-2012 and is secured by a first pari passu charge by way of mortgage of the Company''s immovable properties, present and future. Further secured by a first pari passu charge by way of hypothecation of the Company''s movable assets, including movable machinery, machinery spares, tools and accessories, present and future. Also, secured by a second pari passu charge by way of hypothecation on the Company''s book debts, operating cash flows and the receivables and revenues, current assets commissions and revenues of whatsoever nature and wherever arising, both present and future. Further, there is an exclusive pledge of shareholding of the Company in SRL Limited in favour of the lender, to the extent of at least 2 times of the facility amount, to be maintained at all times during the subsistence of the facility. The rate of interest for each tranche of facility shall be Prime Lending rate less 3.75% per annum, payable monthly. On July 31, 2013 Lender assigned Rs. 10,000 lacs to L&T Fincorp Limited out of outstanding amount of Rs. 16,683.33 lacs as on that date. The loan is repayable in 84 structured monthly instalments, after a moratorium of 12 months from the date of first disbursement to the Company. As at March 31, 2014, Rs. 6,192.60 lacs (Previous year Rs. 17,033.33 lacs) is payable to L&T Infrastructure Finance Company Limited and Rs. 9,265.73 lacs (Previous year Rs. Nil) is payable to L&T Fincorp Limited.

Further, another facility is taken from Siemens financial services for Oracle licences. The Loan is repayable in 8 quarterly payments starting from August 2013 and will end on March 2015.

6. Short term borrowings

a) 10% Redeemable Non Convertible Debentures were issued on September 24, 2012 redeemable at par, at the end of one year from the date of allotment. The debentures were secured by way of first pari passu charge over the free hold land of the Company located in State of Gujarat in favour of Debenture trustee. The debentures were redeemed on October 29, 2013.

b) Overdraft limit of Rs. 1,000 lacs is secured by way of first pari passu charge over moveable fixed assets at Mohali hospital. Further, secured by first pari passu charge over stocks and book debts and carry interest rate ranging from 12.50% to 13.00% per annum.

7. Commitments:

(b) Going concern support in form of funding and operational support letters issued by the Company in favour of FHMWL, FHMSL, Fortis C-Doc Healthcare Limited, FHMEL, LHPL, HHPL, Fortis Cauvery, FAHPL, FHIL & FGHML.

(c) For commitments relating to lease arrangements, refer note 6.

8. Contingent liabilities (not provided for) in respect of:

(Rs. in lacs)

Particulars As at As at March 31, 2014 March 31, 2013

Claims against the Company not acknowledged as debts (in respect 796.68 471.18 of compensation demanded by the patients / their relatives for negligence). The cases are pending with various Consumer Disputes Redressal Commissions. Based on expert opinion obtained, the management believes that the Company has good chance of success in these cases

The Company is under litigation with the Income Tax Department 579.02 501.41 against certain income tax demands on account of deduction of tax under section 194J of Income Tax Act, 1961 instead of section 192 on payments made to retainer doctors, u/s 201(1)/201(1A) for the assessment years 2010-11, 2011-12 and 2012-13, thereby raising demands of Rs. 239.92 lacs (Previous year Rs. 239.92 lacs), Rs. 261.49 lacs (Previous year Rs. 261.49 lacs) and Rs. 77.61 lacs (Previous year Rs. Nil) respectively. Company has filed appeals with the Commissioner of Income Tax (Appeals), Chandigarh which is pending for disposal.

Based on expert opinion obtained, the management believes that the Company has good chance of success in this case.

The Excise & Taxation Commissioner cum Designated Officer- 1,412.35 - Mohali had passed an assessment order dated October 08, 2013 under Punjab Value Added Tax Act, 2005 (''PVAT'') thereby raising a demand of Rs. 1,412.35 lacs (Previous year Rs. Nil) [including penalty Rs. 741.39 lacs (Previous year Rs. Nil) and interest of Rs. 300.26 lacs (Previous year Rs. Nil)] holding that the assessee was liable to pay tax on the medical consumables used on in-patients and out- patients and has contravened the provisions of Section 29(2) of PVAT. Company is in appeal before the Hon''ble High Court of Punjab and Haryana against the aforesaid order of Deputy Excise & Taxation Commissioner. Hon''ble High Court admitted appeal filed by the Company and further, granted stays on assessment order vide its order dated January 15, 2014. Based on expert opinion obtained and the favourable decision of the Allahabad High Court in the case of an associate company in similar matter, the management believes that the Company has good chance of success in this case.

The Commissioner of Service-tax, Chandigarh has passed an 215.34 - Order dated March 14, 2014 under Finance Act, 1994 alleging the assessee is liable to pay service -tax on support services of business or commerce provided to doctors, thereby raising demand of Rs. 215.34 lacs (Previous year Rs. Nil). The Company is planning to file an appeal before appellate authorities. Based on expert opinion obtained, the management believes that the Company has good chance of success in this case.

Premium on redemption of US$ 100 Million 5% Foreign Currency - 986.62 Convertible Bonds due 2015 (Refer note 18 below).

Corporate guarantee given to financial institutions/ banks in respect of financial assistance availed by subsidiaries and associates of the Company. None of the corporate guarantee have been evoked by the Banks/ Financial institutions during the year as the subsidiaries and associates of the Company have complied with the loan covenants.

9. Employee Stock Option Plan

The Company has provided share-based payment scheme to the eligible employees and directors of the Company/its subsidiaries. During the year ended March 31, 2008, 458,500 options (Grant I) were granted to the employees under Plan ''A''. Under the same plan, 33,500 options (Grant II) were granted to the employees during the year ended March 31, 2009, 763,700 (Grant III) during the year ended March 31, 2010, 1,302,250 options (Grant IV) were granted during the year ended March 31, 2011 and 200,000 options (Grant V) were granted during the year ended March 31, 2012. During the previous year 4,050,000 options (Grant VI) were granted under Plan ''B''. Further during the current year 3,715,000 options (Grant VII) were granted under Plan ''B''. The Company has granted these options under Equity Settlement method and there are no conditions for vesting other than continued employment with the Company. The weighted average share price of the Company during the year was Rs. 100.25 (Previous year Rs. 101.52). As at March 31, 2014, the following scheme was in operation:

Expected volatility has been determined considering the daily volatility of the stock prices on National Stock Exchange, over a period prior to the date of grant, corresponding with the expected life of the options.

The fair value of total option outstanding at the year end is Rs. 2,187.19 lacs (Previous year Rs. 1,547.03 lacs) and these shall vest over a period of 3-5 years. Accordingly, the charge for the current year in relation to employee stock compensation on a straight line basis under fair value method would have been Rs. 627.37 lacs (Previous year Rs. 412.17 lacs).

10. Disclosures under Accounting Standard - 15 (Revised) on ''Employee Benefits'':

Defined Benefit Plan

The Company has a defined benefit gratuity plan, where under employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The following table summarizes the components of net benefit expenses recognised in the statement of profit and loss and the amounts recognized in the balance sheet.

11. The Company has entered into ''Operation and Management'' ag reement with entities which are into hospital operations, in terms of which, the Company is responsible for developing and providing maintenance support and related services necessary to support, manage and maintain the hospital as may be required. The management fee in this case is generally based on gross billing of the hospital subject to certain conditions as per the underlying agreement. The gross billing of the hospital is considered based on the unaudited financial statements of the respective entity. The management does not anticipate any material changes in the amounts considered in financial statements.

12. Restructuring

The Group had completed following restructuring during the previous year:- a. The Group''s primary business consists of provision of Hospital Services through various entities. The Company initiated internal 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 business with the internationally emerging trends by moving towards innovative and cost effective methods such as transformation to asset light models. Subsequent to the internal restructuring completed during the year, the business of certain identified hospitals of the Group are being divided into the following two verticals, such that they are managed under different verticals whilst continuing to have mutual interdependencies:

(i) One vertical (the "Clinical Establishments Division") will own, maintain and operate clinical establishments (being fully air conditioned institutions established, and specifically customized and duly fitted with all fixtures, fittings, certain medical equipment and infrastructure required for running and operating the hospitals), along with providing services under outpatient division and radio-diagnostic services (hereinafter referred to as the "Clinical Establishment Services").

(ii) The other vertical (the "Medical Services Division") will undertake the business of running the hospital operations, being hereinafter referred to as provision of medical services, including in- patient services and emergency services ("Medical Services").

b. Religare Health Trust (RHT) made an offering of 567,455,000 common units at S$ 0.90 per common unit. Post listing of RHT on SGX-ST on October 19, 2012, Group''s shareholding in RHT has been diluted from 100% to 28%.

13. As part of Sponsor Agreement entered between The Trustee-Manager of RHT, FGHIPL and Hospital Service Companies (collectively referred as ''Indemnified parties'') with the Company, the Company has provided following indemnities:- i) To RHT and its, directors, officers, employees and agents under the relevant transaction agreements against any losses or liabilities finally determined as payable for any breach of the Consolidated Foreign Direct Investment (FDI) Policy or Foreign Exchange Management Act (''FEMA''), to the extent that such breach has resulted from the acquisition by RHT of the Hospital Services Companies.

Further, the Company has undertaken to transfer or procure additional medical and healthcare services to Hospital Services Companies in the event that any regulatory authority raises concerns over compliance with any applicable law.

However, the Company will not be liable to indemnify the Indemnified Parties for any losses resulting from delay or failure of the Indemnified Parties in completing any statutory filings or similar formalities under the Consolidated FDI Policy, FEMA and other laws in force in India as of the Listing Date i.e. October 19, 2012, required to be undertaken by the Indemnified Parties in relation to the acquisition by RHT or FGHIPL of the equity shares of the Hospital Services Companies.

The Company''s obligations under this indemnity shall continue so long as the Company or the Group holds 15.0% or more of the total units from time to time issued in RHT or three years from the Listing Date, whichever is later.

However, the Company will be liable in respect of the indemnity for a maximum period of five years from the Listing Date.

ii) The Company has also undertaken to indemnify ("Tax Indemnity") each of the Hospital Services Companies and their respective directors, officers, employees and agents (the "Investing Parties") against tax liabilities (including interest and penalties levied in accordance with the Income tax Act and any cost in relation thereto) which these Investing Parties may incur due to the non-allowance of interest on Compulsorily Convertible Debentures (CCDs) or Optionally Convertible Debentures (OCDs) in the hands of the Hospital service Companies.

iii) Further, as per terms of the various Agreements entered into between Hospital Services Companies and Fortis Operating companies, the Hospital Services Companies have right to recover certain statutory dues levied on them from Fortis Operating Companies. There is a possible present obligation on Hospital Services Companies to collect certain statutory dues from the Fortis Operating Companies and pay it to the relevant authorities. In view of uncertainty arising from interpretation of the regulations, management believes that value of such statutory dues cannot be measured reliably and therefore has not been considered in these financial statements.

14. On January, 9 2012, FHML entered into Share Purchase Agreement to acquire 49% interest in FHTL at an aggregate consideration of Rs. 37,728.39 lacs. FHTL is the owner of Shalimar Bagh Clinical Establishment and Gurgaon Clinical Establishment. FHML on September 17, 2012 entered into Shareholders'' Agreement with the Company, pursuant to which FHML has a call option over the Company''s 51% interest in FHTL ("FHTL Call Option") at a fixed price, subject to fulfillment of certain conditions, applicable laws including, and receipt of necessary approvals from all third parties. FHML also has the right to appoint 50% of the directors of FHTL, including the chairman of the board of directors who will have the casting vote in case of deadlock on any matter, including all financial and operating policies of the Company, brought to the board of directors for its approval. Additionally, the Company has assigned its right to receive dividends from FHTL in favour of FHML. In addition, FHML has a put option on its 49% interest in FHTL ("FHTL Put Option"), exercisable if FHML is unable to acquire 100% of the issued and paid-up share capital of FHTL within 5 years from the date of transfer of the 49% shareholding of FHTL by the Company to FHML, for any reason outside the control of FHML. The put option shall be exercised at a price that is equal to the fair market value of Put Securities on the date of exercise of put option, determined on a discounted cash flow basis.

15. During the year ended March 31, 2013, Escorts Heart Institute and Research Centre Limited (''EHIRCL'') have issued 401,769 Compulsorily Convertible Preference Shares (''CCPS'') of face value of Rs.10 each at a premium of Rs. 7,456.98 per CCPS to Kanishka Healthcare Limited (''KHL'') with a maturity period of 15 years aggregating to Rs. 30,000 lacs. Following are the key terms of CCPS:- a) CCPS Put Option – KHL is entitled to exercise an unconditional and irrevocable right to require the Company or its nominee to buy all of CCPS upon occurrence of KHL having exercised FHTL Put Option or FHTL Call Option under shareholders agreement entered between the Company, FHTL and FHML, as per above.

b) Under FHTL call Option the Company is required to pay sum equal to the fair valuation of Equity Shares of EHIRCL as per DCF Method.

c) In case of FHTL put option Company has right to purchase, subject to due compliance with law, all CCPS at consideration equal to KHL''s contribution along with coupon rate agreed.

16. During the year ended March 31, 2011, the Company had issued 1,000 5% Foreign Currency Convertible Bonds of US Dollar 100,000 each aggregating to US Dollar 100,000,000 due 2015 (the "Bonds"). These Bonds are listed on the Euro MTF market of the Luxembourg Stock Exchange. The Bonds are convertible at the option of the holder at any time on or after May 18, 2013 (or such earlier date as is notified to the holders of the Bonds by the Company) up to May 11, 2015 into fully paid equity shares with full voting rights at par value of Rs. 10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs. 167 with 26,922.1557 shares being issued per Bond with a fixed rate of exchange on conversion of Rs. 44.96 = US Dollar 1.00. The Conversion Price is subject to adjustment in certain circumstances.

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Subject to the prior approval of the RBI (or any other statutory or regulatory authority under applicable laws and regulations of India) if required, the Bonds may be redeemed, in whole but not in part, at the option of the Company at any time on or after 18 May 2013 (subject to the Company having given at least 30 days'' notice) at 100 percent of their aggregate principal amount plus accrued but unpaid interest if the closing price of the Shares on each trading day with respect to the shares for a period of at least 30 consecutive such trading days is equal to or greater than 130 per cent of the Accreted Conversion Price (as defined in the terms and conditions of the Bonds).

The Bonds may also be redeemed in whole, but not in part, at the option of the Company subject to satisfaction of certain conditions including obtaining Reserve Bank of India ("RBI") approval, at certain early redemption amount, as specified, on the date fixed for redemption in the event of certain changes relating to taxation in India.

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on May 18, 2015 at 103.1681 per cent of its principal amount. Management has reassessed the probability for conversion of bonds into equity and is of the opinion that it is unlikely that conversion option will be availed by the bondholders. On account of the same, the Company has utilized Securities premium account and provided for the proportionate premium on redemption for the period up to March 31, 2014 amounting to Rs. 1,472.10 lacs. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

Exchange Rate at March 31, 2014 considered for restatement of the Bonds at the year end was Rs. 60.059349= US Dollar 1 (Rs. 54.285 = US Dollar 1 at March 31, 2013).

17. During the current year, the Company issued 150 Foreign Currency Convertible Bonds aggregating to US Dollar 30,000,000 due 2018 (the "Bonds") at the rate of (4.66% LIBOR). These Bonds are listed on the Singapore Exchange Securities Trading Limited (the "SGX-ST").

The Bonds are convertible upto US Dollar 24,000,000 of principal amount at the option of the holder at any time on or after September 17, 2013 (or such earlier date as is notified to the holders of the Bonds by the Company) up to August 01, 2018 into fully paid equity shares with full voting rights at par value of Rs. 10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs. 99.09 with 1,204.71 shares being issued per Bond with a fixed rate of exchange on conversion of Rs. 59.6875 = US Dollar 1.00. The Conversion Price is subject to adjustment in certain circumstances.

Subject to certain conditions, the Bonds may be converted mandatorily into fully paid equity shares, 20% of the principal amount of bond outstanding (but in no event exceeding US Dollar 6,000,000 in aggregate principal amount of Bonds), at the option of the Company at any time on or after September 17, 2013 up to August 01, 2018 at the Partial Reset Conversion Price (as defined in the "Terms & Conditions of the Bonds").

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on August 08, 2018 at 100 per cent of its principal amount. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

The Company has incurred expenses of Rs. 542.62 lacs (including Rs. 24.72 lacs paid to Auditors) in connection with this issue.

The proceeds of the issue amounting to Rs. 18,390.74 lacs have been used for repayment of debts.

Exchange Rate at March 31, 2014 considered for restatement of the Bonds at the year end was Rs. 60.059349= US Dollar 1.

18. During the current year, 2014, the Company issued 550 Foreign Currency Convertible Bonds of US Dollar 100,000 each aggregating to US Dollar 55,000,000 due 2018 (the "Bonds") at the rate of LIBOR 4.86%. The Bonds are convertible at the option of International Finance Corporation ("IFC"), an international organization established by Articles of Agreement among its member countries including the Republic of India (the holder) giving 7 days notice to the Company at any time on or after June 07, 2013 up to June 08, 2018 into fully paid equity shares with full voting rights at par value of Rs. 10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs. 99.09 and number of shares to be issued will be calculated on conversion on the basis of applicable rate of exchange of US Dollar and Rs. on conversion date. The Conversion Price is subject to adjustment in certain circumstances.

The Bonds may be converted on the request of the holder but not less than value of US Dollar 5,000,000 or in multiple of US Dollar 1,000,000 thereafter. Except in certain condition mentioned in the "Terms & Conditions of the Bonds" the holder cannot exercise the Conversion Option in part or in full in respect of twenty per cent (20%) of the original bond value for a period of three (3) years after the Subscription Date.

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Subject to the prior approval of the RBI (or any other statutory or regulatory authority under applicable laws and regulations of India) if required, the Bonds may be converted mandatorily into fully paid equity shares, 20% of the principal amount of bond at the option of the Company at any time on or after June 07, 2013 at Modified Conversion Price (as defined in the "Terms & Conditions of the Bonds").

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on June 08, 2018 at 100 per cent of its principal amount. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

Exchange Rate at March 31, 2014 considered for restatement of the Bonds at the year end was Rs. 60.059349= US Dollar 1.

19. During the previous year, the Company initiated an institutional placement programme (IPP) for issuance of equity share of the Company. The issue was authorised by the Board of Directors through circular resolutions dated November 27, 2012 and by the Company''s shareholders through a special resolution passed by way of postal ballot the result whereof was announced on January 15, 2013.

20. During the current year, the Board of Directors of the Company, through its resolution dated April 24, 2013, authorised the issuance of up to 28,610,355 Equity Shares to International Finance Corporation through a preferential allotment. Subsequently, the Company issued and allotted 18,833,700 equity shares to International Finance Corporation at Rs. 99.09 per share including premium of Rs. 89.09 per share aggregating to Rs. 18,662.31 lacs.

21. During the current year, the shareholders of the Company, through its special resolution dated August 22, 2013, authorized the issuance of 3,737,449 Equity shares to Standard Chartered Private Equity (Mauritius) III Limited through a preferential allotment. Subsequently, on September 5, 2013, the Company issued and allotted 3,737,449 equity shares to Standard Chartered Private Equity (Mauritius) III Limited at Rs. 99.09 per share including premium of Rs. 89.09 per share aggregating to Rs. 3,703.44 lacs.

22. Details of dues to Micro and Small Enterprises as per MSMED Act, 2006

During the period ended December 31, 2006, Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development Act, 2006 which comes into force with effect from October 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The management has confirmed that none of the suppliers have confirmed that they are registered under the provision of the Act. In view of this, the liability of the interest and disclosure are not required to be disclosed in the financial statements.

23. During the year, the Company has capitalised the following expenses to the cost of fixed asset/ capital work in progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amount capitalised by the Company.

24. Subsequent events

a) In continuance of Group''s Asset light model, subsequent to year end on May 7, 2014, the Company has entered in to an agreement with Escorts Heart and Super Specialty Hospital Limited ("EHSSHL"), a subsidiary of Religare Health Trust, for transfer of net assets relating to the Mohali Clinical Establishment (in Punjab) to EHSSHL. The transaction has been completed subsequent to the year end and hence no effect has been given in the financial statements for the year ended March 31, 2014.

b) During the current year, the Board of Directors of the Company at its meeting held on March 25, 2014 approved the purchase of operations of Fortis Hospital, Shalimar Bagh from its subsidiary, Fortis Hospitals Limited (''FHsL'') on a going concern basis by way of a slump sale. The Company and FHsL entered into a business transfer agreement (''BTA'') on March 28, 2014 for purchase of operations of Shalimar Bagh for a consideration of Rs. 4,000 lacs. The transaction is effective from April 1, 2014 and hence no effect has been given in the financial statements for the year ended March 31, 2014.

25. Previous Year Figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2013

1. Nature of Operations

Fortis Healthcare Limited (the ''Company'' or ''FHL'') was incorporated in the year 1996 and commenced its hospital operations in the year 2001 with the flagship of Multi-Specialty Hospital at Mohali and has thereafter set up/ acquired/ taken over the management of other hospitals in different parts of the country. As part of its business activities, the Company holds interests in its subsidiaries, joint ventures and associate companies through which it manages and operates a network of multi-specialty hospitals. The Company''s equity shares are listed on both Bombay Stock Exchange and National Stock Exchange and its Foreign Currency Convertible Bonds are listed on the Euro MTF market of the Luxembourg Stock Exchange.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Leases

(a) Assets taken on Operating Lease:

Hospital/ Office premises and few medical equipments are obtained on operating lease. In all the cases, the agreements are further renewable at the option of the Company. There is no escalation clause in the respective lease agreements. For all cases, there are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency. The total lease payments in respect of such leases recognised in the statement of profit and loss for the year are Rs. 1,185.87 lacs (Previous year Rs. 2,188.73 lacs) and capitalized during the year are Rs. 1,784.40 lacs (Previous year Rs. 694.14 lacs).

(b) Assets given on Operating Lease

i) The Company has sub- leased some portion of hospital premises. In all the cases, the agreements are further renewable at the option of the Company. There is no escalation clause in the respective lease agreements. There are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency. All these leases are cancellable in nature. The total lease income received / receivable in respect of the above leases recognised in the statement of profit and loss for the year are Rs. 105.45 lacs (Previous year Rs. 83.92 lacs).

ii) The Company has leased out certain capital assets on operating lease to a Trust managing hospital operations and one of its Associates. The lease term is for 3 years and thereafter renewable at the option of the lessor. There are no restrictions imposed by the lease arrangements and the rent is not determined based on any contingency. There is no escalation clause in the lease agreements. The lease arrangement is non-cancellable in nature. The details of the capital assets given on operating lease are as under:

4. Deferred Tax Asset / (Liability):

The Company has deferred tax liability of Rs. 734.19 lacs (Previous year Rs. 595.56 lacs) and deferred tax assets of Rs. 702.35 lacs (Previous year Rs. 706.63 lacs) as per details below. In accordance with Accounting Standard 22 ''Accounting for Taxes on Income'', as notified under Companies (Accounting Standard) Rules, 2006, in view of the large amount of accumulated losses carried forward at the close of the previous year, deferred tax assets on timing differences have not been recognized for in the books since it is not virtually certain whether the Company will be able to use such losses/depreciation. Accordingly the company has recognised deferred tax asset of Rs. 596.56 lacs in previous year financial statement to set off against the deferred tax liabilities and no deferred tax asset (net of deferred tax liability) was created in the absence of above virtual certainty.

5. Employee Stock Option Plan

The Company has provided share-based payment scheme to the eligible employees and directors of the Company/its subsidiaries. During the year ended March 31, 2008, 458,500 options (Grant I) were granted to the employees under Plan ''A''. Under the same plan, 33,500 options (Grant II) were granted to the employees during the year ended March 31, 2009, 763,700 (Grant III) during the year ended March 31, 2010, 1,302,250 options (Grant IV) were granted during the year ended March 31, 2011 and 200,000 options (Grant V) were granted during the previous year. During the previous year 4,050,000 options (Grant VI) were granted under Plan ''B''. The Company has granted these options under Equity Settlement method and there are no conditions for vesting other than continued employment with the Company. The weighted average share price of the Company during the year was Rs. 101.52 (Previous year Rs. 132.54). As at March 31, 2013, the following scheme was in operation:

6. Disclosures under Accounting Standard - 15 (Revised) on ''Employee Benefits'':

Defined Benefit Plan

The Company has a defined benefit gratuity plan, where under employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The following table summaries the components of net benefit expenses recognised in the statement of profit and loss and the amounts recognized in the balance sheet.

7. The Company has entered into ''Operation and Management'' agreement with entities which are into hospital operations, in terms of which, the Company is responsible for developing and providing maintenance support and related services necessary to support, manage and maintain the hospital as may be required. The management fee in this case is generally based on gross billing of the hospital subject to certain conditions as per the underlying agreement. The gross billing of the hospital is considered based on the unaudited financial statements of the respective entity. The management does not anticipate any material changes in the amounts considered in financial statements.

8. Restructuring during the year

a. The Group''s primary business consists of provision of Hospital Services through various entities. The Company initiated internal 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 business with the internationally emerging trends by moving towards innovative and cost effective methods such as transformation to asset light models. Subsequent to the internal restructuring completed during the year, the business of certain identified hospitals of the Group are being divided into the following two verticals, such that they are managed under different verticals whilst continuing to have mutual interdependencies:

(i) One vertical (the "Clinical Establishments Division") will own, maintain and operate clinical establishments (being fully air conditioned institutions established, and specifically customized and duly fitted with all fixtures, fittings, certain medical equipment and infrastructure required for running and operating the hospitals), along with providing services under outpatient division and radio-diagnostic services (hereinafter referred to as the "Clinical Establishment Services").

(ii) The other vertical (the "Medical Services Division") will undertake the business of running the hospital operations, being hereinafter referred to as provision of medical services, including in- patient services and emergency services ("Medical Services").

b. Religare Health Trust (RHT) made an offering of 567,455,000 common units at S$ 0.90 per common unit. Post listing of RHT on SGX-ST on October 19, 2012, Group''s shareholding in RHT has been diluted from 100% to 28%.

9. As part of Sponsor Agreement entered between The Trustee-Manager of RHT, FGHIPL and Hospital Service Companies (collectively referred as ''Indemnified parties'') with the Company, the Company has provided following indemnities:-

i) To RHT and its, directors, officers, employees and agents under the relevant transaction agreements against any losses or liabilities finally determined as payable for any breach of the Consolidated Foreign Direct Investment (FDI) Policy or Foreign Exchange Management Act (''FEMA''), to the extent that such breach has resulted from the acquisition by RHT of the Hospital Services Companies.

Further, the Company has undertaken to transfer or procure additional medical and healthcare services to Hospital Services Companies in the event that any regulatory authority raises concerns over compliance with any applicable law.

However, the Company will not be liable to indemnify the Indemnified Parties for any losses resulting from delay or failure of the Indemnified Parties in completing any statutory filings or similar formalities under the Consolidated FDI Policy, FEMA and other laws in force in India as of the Listing Date i.e. October 19, 2012, required to be undertaken by the Indemnified Parties in relation to the acquisition by RHT or FGHIPL of the equity shares of the Hospital Services Companies.

The Company''s obligations under this indemnity shall continue so long as the Company or the Group holds 15.0% or more of the total units from time to time issued in RHT or three years from the Listing Date, whichever is later.

However, the Company will be liable in respect of the indemnity for a maximum period of five years from the Listing Date.

ii) The Company has also undertaken to indemnify ("Tax Indemnity") each of the Hospital Services Companies and their respective directors, officers, employees and agents (the "Investing Parties") against tax liabilities (including interest and penalties levied in accordance with the Income tax Act and any cost in relation thereto) which these Investing Parties may incur due to the non-allowance of interest on Compulsorily Convertible Debentures (CCDs) or Optionally Convertible Debentures (OCDs) in the hands of the Hospital service Companies.

10. On January, 9 2012, FHML entered into Share Purchase Agreement to acquire 49% interest in FHTL at an aggregate consideration of Rs. 37,728.39 lacs. FHTL is the owner of Shalimar Bagh Clinical Establishment and Gurgaon Clinical Establishment. FHML on September 17, 2012 entered into Shareholders'' Agreement with the Company, pursuant to which FHML has a call option over the Company''s 51% interest in FHTL ("FHTL Call Option") at a fixed price, subject to fulfillment of certain conditions, applicable laws including, and receipt of necessary approvals from all third parties. FHML also has the right to appoint 50% of the directors of FHTL, including the chairman of the board of directors who will have the casting vote in case of deadlock on any matter, including all financial and operating policies of the company, brought to the board of directors for its approval. Additionally, the Company has assigned its right to receive dividends from FHTL in favour of FHML. In addition, FHML has a put option on its 49% interest in FHTL ("FHTL Put Option"), exercisable if FHML is unable to acquire 100% of the issued and paid-up share capital of FHTL within 5 years from the date of transfer of the 49% shareholding of FHTL by the Company to FHML, for any reason outside the control of FHML. The put option shall be exercised at a price that is equal to the fair market value of Put Securities on the date of exercise of put option, determined on a discounted cash flow basis.

11. During the year ended March 31, 2013, Escorts Heart Institute and Research Centre Limited (EHIRCL) have issued 401,769 Compulsorily Convertible Preference Shares (''CCPS'') of face value of Rs.10 each at a premium of Rs. 7,456.98 per CCPS to Kanishka Healthcare Limited (KHL) with a maturity period of 15 years aggregating to Rs. 30,000 lacs. Following are the key terms of CCPS:-

a) CCPS Put Option — KHL is entitled to exercise an unconditional and irrevocable right to require the Company or its nominee to buy all of CCPS upon occurrence of KHL having exercised FHTL Put Option or FHTL Call Option under shareholders agreement entered between the Company, FHTL and FHML, as per above.

b) Under FHTL call Option the Company is required to pay sum equal to the fair valuation of Equity Shares of EHIRCL as per DCF Method.

c) In case of FHTL put option Company has right to purchase, subject to due compliance with law, all CCPS at consideration equal to KHL''s contribution along with coupon rate agreed.

12. During the year ended March 31, 2011, the Company had issued 1,000 5% Foreign Currency Convertible Bonds of US Dollar 100,000 each aggregating to US Dollar 100,000,000 due 2015 (the "Bonds"). These Bonds are listed on the Euro MTF market of the Luxembourg Stock Exchange. The Bonds are convertible at the option of the holder at any time on or after May 18, 2013 (or such earlier date as is notified to the holders of the Bonds by the Company) up to May 11, 2015 into fully paid equity shares with full voting rights at par value of Rs. 10 each of the Company ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs. 167 with 26,922.1557 shares being issued per Bond with a fixed rate of exchange on conversion of Rs. 44.96 = US Dollar 1.00. The Conversion Price is subject to adjustment in certain circumstances.

The Bonds may otherwise be redeemed, in whole or in part, at the option of the Company and holders of the bonds, before the maturity date subject to satisfaction of certain conditions.

Subject to the prior approval of the RBI (or any other statutory or regulatory authority under applicable laws and regulations of India) if required, the Bonds may be redeemed, in whole but not in part, at the option of the Company at any time on or after 18 May 2013 (subject to the Company having given at least 30 days'' notice) at 100 percent of their aggregate principal amount plus accrued but unpaid interest if the closing price of the Shares on each trading day with respect to the shares for a period of at least 30 consecutive such trading days is equal to or greater than 130 per cent of the Accreted Conversion Price (as defined in the terms and conditions of the Bonds).

The Bonds may also be redeemed in whole, but not in part, at the option of the Company subject to satisfaction of certain conditions including obtaining Reserve Bank of India ("RBI") approval, at certain early redemption amount, as specified, on the date fixed for redemption in the event of certain changes relating to taxation in India.

Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company in US Dollars on May 18, 2015 at 103.1681 per cent of its principal amount. Since the redemption of bonds is contingent upon its non-conversion into Equity Shares and the probability of redemption cannot presently be ascertained, the Company has not provided for the proportionate premium on redemption for the period up to March 31, 2013 amounting to Rs. 986.62 lacs (Previous year Rs. 603.13 lacs). Such premium has been disclosed as contingent liability. These Bonds are considered a monetary liability and are redeemable only if there is no conversion before maturity date.

Exchange Rate at March 31, 2013 considered for restatement of the Bonds at the year end was Rs. 54.285= US Dollar 1 (Rs. 50.9449 = US Dollar 1 at March 31, 2012).

13. Included in note 4(xviii) of the financial statements is service tax recoverable of Rs. 531.20 lacs (Previous year Rs. 520.66 lacs). As per management, this amount can be adjusted against service tax obligation on certain transactions as per current business plan. Hence, the management does not consider any need to make provision against non utilization of this service tax recoverable in these financial statements.

14. The Company was liable to pay Income tax for the previous years under the provisions of Section 115 JB of the Income Tax Act, 1961. As per the provisions of the Section 115JAA of the Income Tax Act, 1961, MAT credit is available to the Company in subsequent assessment years in respect of the minimum alternate tax paid in prior years. Accordingly, income tax of Rs. 1,450.85 lacs have been adjusted against the MAT credit recognized in the prior years.

15. Details of dues to Micro and Small Enterprises as per MSMED Act, 2006

During the period ended December 31, 2006, Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development Act, 2006 which comes into force with effect from October 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The management has confirmed that none of the suppliers have confirmed that they are registered under the provision of the Act. In view of this, the liability of the interest and disclosure are not required to be disclosed in the financial statements.

16. Finance Act 2012, has introduced provisions with respect to domestic transfer pricing that require all tax payers to whom provisions of domestic transfer pricing apply to complete transfer pricing documentation which will form the basis of form 3CEB to be submitted with the tax authorities. The Company is currently in the process of compiling and completing the documents. The management is of the belief that the aforesaid legislation will not have any material impact on the financial statements.

17. Subsequent events

During the current year, the company initiated an institutional placement programme (IPP) for issuance of equity share of the Company. The issue was authorised by the Board of Directors through circular resolutions dated November 27, 2012 and by the Company''s shareholders through a special resolution passed by way of postal ballot the result whereof was announced on January 15, 2013.

Subsequent to March 31, 2013, the company issued 34,993,030 equity shares of face value Rs. 10 each at a price of Rs. 92 per equity share under IPP. The transaction has been concluded in May 2013. The total proceeds of the issue were approximately Rs. 32,193.59 lacs which will be use in repayment of debts, funding capital expenditure requirements and general corporate purposes.

18. Previous Year Figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.

 
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