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Directors Report of Fortis Malar Hospitals Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting here the Twenty Fifth Annual Report of your Company along with the Audited Standalone and Consolidated Financial Accounts and the Auditors’ Report thereon for the Year ended March 31, 2016.

FINANCIAL RESULTS

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

[in Rs. Lacs]

Consolidated

Standalone

Particulars

Year ended March 31, 2016

Year ended March 31, 2015

Year ended March 31, 2016

Year ended March 31, 2015

Continuing Operations

Operating Income

12,961.35

11,792.57

12,961.35

11,792.57

Other Income

797.86

764.29

772.08

736.41

Exceptional items

-

-

-

-

Total Income

13,759.21

12,556.86

13,733.43

12,528.98

Total Expenditure

12,358.94

11,038.22

12,361.02

11,039.84

Operating Profit

1,400.27

1,518.64

1,372.41

1,489.14

Less: Finance Charges, Depreciation & Amortization

356.12

322.05

356.12

322.05

Profit before Exceptional items and tax

1,044.15

1,196.59

1,016.29

1,167.09

Exceptional items

51.15

-

51.15

-

Profit before tax

993.00

1,196.59

965.14

1,167.09

Less: Tax Expenses

352.03

410.41

343.42

401.14

Net Profit for the year

640.97

786.18

621.72

765.95

Profits/ (losses) attributable to Minority Interest

-

-

-

-

Share in the (Loss)/Profit of Associates

-

-

-

-

Profit for the year

640.97

786.18

621.72

765.95

STATE OF COMPANY’S AFFAIR, OPERATING RESULTS AND PROFITS

Fortis Malar Hospital was acquired by Fortis Group in early 2008. The hospital founded in 1989, is established as one of the largest corporate hospitals in Chennai providing quality super specialty and multi-specialty healthcare services. Fortis Malar Hospital, with 170 beds, focuses on providing comprehensive medical care in the areas of Cardiology and Cardiac Surgery, Neuro Surgery, Gynecology, Orthopedics, Gastroenterology, Neurology, Pediatrics, Diabetics, Nephrology and Internal Medicine.

Fortis Malar Hospital has a state of the art Cath Lab and multiple dedicated cardiac operation theatres and intensive coronary care units. Several rare and complex Adult and Pediatric Cardiac surgeries, Orthopedic and Joint replacements, Neurosurgeries and Plastic reconstruction surgeries have been performed at this hospital. The hospital’s Obstetrics and Gynecology services are among the best in the city, successfully performing many complicated deliveries and surgeries. They are supported by a dedicated Neonatology unit.

The Company witnessed growth across all its major specialties. Your Company continued its focus on Quality Parameters, Patient Care and Patient Welfare services resulting in significant improvement in patient satisfaction levels.

Further, there are no significant material order passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations and there is no change in the nature of the Company. The Company has not made any provision of money for purchase of, or subscription for, its own shares or of its holding Company.

Operational and Financial Performance

During the financial year 2015-16, your company achieved a consolidated income from operations of Rs 129.61 Cr against Rs 117.93 Cr during the last financial year ended March 31, 2015, representing a growth of 10%. Consolidated EBITDA for the year stood at Rs 6.02 Cr compared to Rs 7.54 Cr in the previous year. Profit before exceptional item and tax stood at Rs 10.44 Cr compared to Rs 11.97 Cr in the corresponding period. Consolidated Net profit for the year was Rs 6.41 Cr compared to Rs 7.86 Cr in previous year.

Regarding the key performance indicators, the Company’s average revenue per occupied bed (ARPOB) improved significantly during the current year to Rs 127 lacs from Rs 118 lacs in the previous year. The average length of stay (ALOS) stood at 3.87 days in Financial Year 2016 compared to 3.82 days in Financial Year 2015. Occupancy of the hospital during the year was at 60%, similar to the previous year.

DIVIDEND AND TRANSFER TO RESERVES

Your Directors have recommended a dividend of Re. 0.50 (Fifty Paisa) per equity share (last year Re. 0.50 per equity share) for the financial year ended March 31, 2016. The dividend payout is subject to approval of members at the ensuing Annual General Meeting. The dividend will be paid to members whose names appear in the Register of Members as on the date of book closure and in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. No amount has been transferred to reserves.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR 2015-16 AND THE DATE OF THE REPORT

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2015-16 and the date of the report.

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

The Company has in place adequate internal financial controls with reference to financial statements. During the year such controls were tested and no reportable material weakness in the design or operation was observed.

DETAILS OF SUBSIDIARY

During the year under review, the Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include setting up, managing / administering hospital(s) and to provide Medicare and Health care services.

Further note that the Board of Directors has adopted a policy for determining “material subsidiary” pursuant to Regulation 16(1)(c) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. The said policy is available at http://www.fortismalar.com/wp-content/uploads/shareholdingpatterns/shareholdingpatterns2015-2016/Policy_material_ subsidiary.pdf

Basis the Consolidated Audited Annual Accounts of the Company for the financial year 2015-16, the Company has no “material non-listed subsidiary” in terms SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015.

PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY

The consolidated financial statements of the Company and its subsidiary, prepared in accordance with applicable accounting standards, issued by the Institute of Chartered Accountants of India, forms part of the Annual Report. In terms of the Section 136 of the Companies Act, 2013, financial statements of the subsidiary company will be provided to any shareholder of the Company who asks for it and said annual accounts will also be kept open for inspection at the registered office of the Company and that of subsidiary. Performance and financial position of the subsidiary included in the Consolidated Financial Statements of the Company is mentioned below (Form AOC-1):-

[Amount in Rs.]

Particulars

Year ended March 31, 2016

1.

Name of the subsidiary

MALAR STARS MEDICARE LIMITED

2.

Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

April 1, 2015 to March 31, 2016

3.

Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

N.A.

4.

Shares of the subsidiary company held on the above date and extent of holding

500,000

5.

Equity shares of Rs. 10/- each (50,000 equity shares of Rs. 10/- each fully paid)

500,000

Reserves & Surplus

9,761,214

6.

Total Assets

644,882,015

7.

Total Liabilities

644,882,015

8.

Investments

-

9.

Turnover

3,588,000

10.

Profit before Taxation

2,787,013

11.

Provision for Taxation

861,188

12.

Profit after Taxation

1,925,825

13.

Proposed Dividend

-

14.

% of Shareholding

100%

*As on March 31, 2016, the Company does not have any associate Company and/or Joint Venture

LOANS/ADVANCES/INVESTMENTS

Particulars of Loans/Advances/Investments given & outstanding during the Financial Year 2015-16 are mentioned in notes to financial statements. Further, the loans have been given for meeting the working capital requirement and investments.

PUBLIC DEPOSITS

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

AUDITORS

1. Statutory Auditors

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

Based on the recommendations of the Audit and Risk Management Committee, the Board of Directors of the Company proposes to ratify appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants, as the Statutory Auditors of the Company at the ensuing Annual General Meeting of the Company.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

2. Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies Cost Records and Audit Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its hospital activity is required to be audited. Your Directors had, on the recommendation of the Audit & Risk Management Committee, appointed M/s Jitender, Navneet & Co., Cost Accountants to audit the cost accounts of the Company for the Financial Year 2015-16 at a remuneration of Rs. 50,000 (Rupees Fifty Thousand) plus out of pocket expenses and taxes. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking Member’s ratification for the remuneration payable to M/s Jitender, Navneet & Co., Cost Auditors is included at Item No. (6) of the Notice convening the Annual General Meeting.

3. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Mukesh Agarwal, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as “Annexure I”. However the Auditors had made a observation which is self explanatory & doesn’t call for any further comments.

4. Internal auditors

Upon the recommendation of the Audit and Risk Management Committee, the Board of Directors has appointed Mr. Rajiv Puri, Head Risk and Internal Audit of the Holding Company as the Chief Internal Auditor of the Company and authorized him to engage independent firms’ for conducting the internal audit for the Financial Year 2015-16. Accordingly, Axis Risk Consulting Services Pvt. Ltd was engaged to perform Internal Audit for the Company.

During the period under review no fraud was reported by the above stated Auditors.

STOCK OPTIONS

The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Scheme of the Company in accordance with the applicable SEBI Guidelines. Each option when exercised would be converted into one fully paid up equity share of Rs.10 each of the Company.

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2016 under the “Malar Employees Stock Option Plan 2008” are set out in the “Annexure-II” to this Board’ Report.

Disclosure pursuant to the Regulations for the year ended on March 31, 2016 is available at (http://www.fortismalar.com/wp-content/uploads/annualreport/ESOP-Disclosure-2015-16.pdf) and also forms part of this Directors’ Report.

The certificate from the Statutory Auditors of the Company stating that the Schemes have been implemented in accordance with the SEBI Guidelines would be placed at the Annual General Meeting for inspection by members.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return is annexed herewith as “Annexure III”

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Particulars required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of The Companies (Accounts) Rules, 2014, regarding Conservation of Energy, Technology Absorption and Foreign Exchange is given in “Annexure IV”, forming part of the Board Report.

CORPORATE SOCIAL RESPONSIBILITY

The initiatives for Fortis Malar Hospitals Limited are led through the Fortis Charitable Foundation (FCF), its designated CSR vehicle.

ABOUT FORTIS CHARITABLE FOUNDATION

The Fortis Charitable Foundation (FCF) came into being in the year 2005. Set up by Malvinder Mohan Singh and Shivinder Mohan Singh (The Singh Group), the Foundation is constituted as a trust, with Malvinder Mohan Singh, Shivinder Mohan Singh, Japna Singh and Aditi Singh nominated as the founder trustees.

FCF was established with the intention of supporting preventive and remedial healthcare services to vulnerable sections of society.

Given the scale and complexity of the problem, FCF believes that in order to deliver on this objective, we must work in partnership with like-minded organization, volunteers, contributors and “any” stakeholder willing to help towards addressing the problem. The intention is to seed and support the creation of an ecosystem, working to ensure delivery of sustainable, scalable and high-impact programmes.

The programs are designed under a needs assessment, focusing on areas in which we leverage the Group’s inherent healthcare experience and competencies and deliver the most sustainable impact, and also de-risk the entry and role of the other participants, as well as operate the programmes at a level of efficiency, which minimizes over-head and administrative costs.

Fortis Foundation has 5 primary programs:

UMEED (A Child Centric Program),

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

SEWA (A Disaster Relief Initiative),

CHHAYA (Supporting Charitable Medical Infrastructure)

SAVERA (Awareness, Communication & Publications) and

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

The contributions of Fortis Malar Hospitals Limited are directed towards the CHHAYA Program.

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

In 2015-16, CHHAYA continued supporting the charitable dispensary in Amritsar, and helped start a new charitable dispensary at the Birla Mandir in Delhi.

Over the last year, the Golden Temple dispensary treated 32,190 patients.

With support from our executing partners, we facilitated the testing and treatment of 71,995 people at health camps over the last year.

In 2015-16, FCF also entered into a partnership with PNB Housing Finance Limited, conducting 3 health camps during the year and treating 374 students and faculty. The health camps included free blood tests, eye tests, dental tests, BMI and general health evaluation for each beneficiary.

For further information on Fortis Charitable Foundation please visit the web site: www.fortisfoundation.in

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

DIRECTORS & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr Daljit Singh, Chairman of the Board of Directors of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered himself for re-appointment. The Board on the recommendation of the Nomination and Remuneration Committee proposed his re-appointment to the shareholders of the Company.

The Board of Directors on the recommendation of the Nomination & Remuneration Committee, appointed Mr. Meghraj Arvindrao Gore as an Additional Director (Non- Executive) w.e.f May 24, 2016. Further, it is now proposed to have the appointment of such Director approved by the members, in the ensuing Annual General Meeting.

Brief resume of directors seeking appointment and re-appointment along with other details as stipulated under Regulation 36 of SEBI Listing (Obligation & Disclosure Requirements) Regulation, 2015, are provided in the Corporate Governance Report.

Further, Mr. Karthik Rajagopal, Non-Executive Director of the Company had resigned during the period under review. For further details please refer Corporate Governance Report.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Regulation 16(1)(b) of the SEBI Listing (Obligation & Disclosure Requirements) Regulation, 2015. There are no inter-se relationship between our Board Members.

Details of the Key Managerial Personnel of the Company are detailed below:-

S.

No.

Name of the Key Managerial Personnel

Designation

Date of Appointment

Date of Resignation

1.

Mr. Raghunath P

Whole-time Director

July 26, 2014

NA

2.

Mr. Akshaya Kumar Singh

Chief Financial Officer

July 26, 2014

NA

3.

Mr. Sumit Goel

Company Secretary

September 5, 2014

NA

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

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

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

2. Details of establishment of Vigil Mechanism

3. Details of remuneration paid to all the Directors including Stock Options

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

Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(4) and Schedule II Part D of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, the Board has carried out performance evaluation of its own performance, the Directors individually, Chairman as well as the evaluation of the working of its Audit & Risk Management Committee, Nomination & Remuneration Committee (NRC), Stakeholders Relationship Committee and Corporate Social Responsibility Committee.

The following process of evaluation was followed:

S. No.

Process

Remarks

1.

Individual Self- Assessment

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

2.

One to One discussion

An independent Advisor was authorized to interact with each member to assess performance, invite direct feedback and seek inputs to identify opportunities for improvement

3.

Board Evaluation for the Board, Nomination and Remuneration Committee and of Independent Directors

Using the Self-Assessment feedback and output from the one-on-one discussions the formal Board Evaluation Process was conducted. A compilation of the individual self-assessments and one to one discussions were placed at the meeting of the Nomination and Remuneration Committee (NRC), the Independent Director’s (ID’s) and the Board of Directors (BoD), held on February 1, 2016 for them to review collectively and include as additional feedback to the formal process completed in the meetings.

4.

Final recording and reporting

Based on the above, a final report on Board Evaluation was collated, presented and tabled at a meeting of the Board of Directors. The report also noted best practices in certain areas and considered opportunities for improvement.

Managerial Remuneration:

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

(a) Comparison and ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2015-16;

(Amount in Rs.)

Name of the Director*

Remuneration of Director

Median Remuneration of employees

Ratio

Mr. Raghunath P

41,10,344/-

2,30,946/-

18

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

(b) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, during the financial year under review;

Name of Director/ KMP

Designation

% increase in Remuneration

Mr. Raghunath P

Whole-time Director

10

Mr. Akshaya Kumar Singh

Chief Financial Officer

8

Mr. Sumit Goel

Company Secretary

NA

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

(d) The number of permanent employees on the rolls of Company is 542 as on March 31, 2016;

(e) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

Particulars

For the Financial Year 2015-16

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

8%

(B) Percentile increase in the managerial remuneration

9%

Comparison of (A) and (B)

1%

Justification

To retain the skilled employee on the board and to compete the market standard,

Any exceptional circumstances for increase in the managerial remuneration

N.A.

(f) Salary details along with the variable component and other benefits of the remuneration being paid to directors are detailed below:

Name of the Director

Salary Allowance Prerequisites (Rs.)

Performance Incentives (Rs.)

Retiral Benefits (Rs.)

Service Contract

Tenure

Notice Period

Mr. Raghunath P

33,48,936

5,52,056

2,09,352

3 Years w.e.f. July 26, 2014

3 Months

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

(h) Remuneration Policy:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a remuneration policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director etc. and the same is also available on the website of the Company at the link http://www.fortismalar.com/wp-content/uploads/shareholdingpatterns/shareholdingpatterns2015-2016/Policy-on-Compensation-Benefits.pdf.

PARTICULARS OF EMPLOYEES

There are no employees in the Company who falls under the purview of Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into, during the financial year under review were on an arm’s length basis and in the ordinary course of business. There are few materially significant Related Party Transactions made by the Company with other related parties. Disclosures as required under Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in “Annexure VI” in Form AOC 2 as specified under the Companies Act, 2013.

All Related Party Transactions are placed before the Audit and Risk Management Committee for approval as required under SEBI (LODR) Regulation 2015. Prior omnibus approval of the Audit and Risk Management Committee is obtained for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit and Risk Management Committee on a quarterly basis.

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

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website and the same is available at the link: http://www.fortismalar.com/wp-content/uploads/shareholdingpatterns/shareholdingpatterns2015-2016/ Policy_on_Materiality_Related_Party_Transactions.pdf.

None of the Directors has any pecuniary relationship or transaction vis-a-vis the Company, except to the extent of sitting fees and remuneration approved by the Board of Directors.

RISK MANAGEMENT POLICY

The Company has developed and implemented a Risk Management Policy. The said policy is being implemented and monitored by the Audit & Risk Management Committee. The details thereof are covered under Management and Discussion Analysis Report which forms part of the Annual Report.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT

Your Company has adopted a Policy for Prevention, Prohibition and Redressal of sexual harassment. There are no complaints relating to sexual harassment during the year under review and those are pending as on the end of the financial year.

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greatest emphasis on managing its affairs with diligence, transparency, responsibility and accountability.

Your Company is committed to adopting and adhering to the best Corporate Governance practices recognized globally. Your Company understands and respects its fiduciary role and responsibility towards stakeholders and the society at large, and strives hard to serve their interests, resulting in creation of value and wealth for all stakeholders at all times.

The report of Board of Directors of the Company on Corporate Governance is given in the section titled “Report on Corporate Governance” forming part of this Annual Report.

Certificate of M/s. Sanjay Grover & Associates, Company Secretary in Whole-time Practice, regarding compliance with the Corporate Governance requirements as stipulated in Clause F, Schedule V of SEBI (Listing Obligation and Disclosure Requirements) is annexed with the Corporate Governance Report.

CODE OF CONDUCT

Declaration by Mr. Raghunath P., Whole-time Director confirming compliance with the ‘Fortis Code of Conduct’ is enclosed with Corporate Governance Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company for financial year ended March 31, 2016 and of the profit of the company for the said period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the Central Government, State Governments and all other Government agencies for the assistance, co-operation and encouragement they have extended to the Company.

Your Directors also take this opportunity to extend a special thanks to the medical fraternity and patients for their continued cooperation, patronage and trust reposed in the Company.

Your Directors also greatly appreciate the commitment and dedication of all the employees at all levels, that has contributed to the growth and success of the Company. Your Directors also thank all the strategic partners, business associates, Banks, financial institutions and our shareholders for their assistance, co-operation and encouragement to the Company during the year.

On behalf of the Board of Directors

Fortis Malar Healthcare Limited

Sd/-

Date : July 19, 2016 Daljit Singh

Place : Chennai Chairman


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Third Annual Report together with the Audited Standalone and Consolidated Financial Accounts of your Company for the financial year ended March 31, 2014.

FINANCIAL RESULTS

The highlights of Consolidated and Standalone financial results of your Company and its subsidiary are as follows:

Rs. in Lacs

Consolidated standalone

Particulars For the For the For the For the year ended year ended year ended year ended March March March March 31,2014 31,2013 31,2014 31, 2013

Total Income 10,837.83 9,856.18 10,837.83 9,856.18

Total Expenditure 9,944.20 8,633.78 9,946.91 8,637.52

Profit before 893.63 1,222.40 890.92 1,218.66 Interest, Tax & Depreciation

Financial cost 45.73 80.04 45.73 80.04 Depreciation/ Provision for Obsolescence/

Impairment 199.27 249.04 199.27 249.04

Interest Income (690.25) (363.42) (661.44) (267.14)

Profits before 1,338.88 1,256.74 1,307.36 1,156.72 exceptional items

Exceptional Items - 296.49 - 353.28

Profit before 1,338.88 1,553.23 1,307.36 1,510.00 Extraordinary Items

Extraordinary item - 4,140.05 - 4,140.05

Profits before Tax 1,33888 5,693.28 1,307.36 5,650.05

Net profits after 877.56 4,347.83 855.78 4,317.96 Tax

OPERATING RESULTS AND PROFITS

During the year ended March 31, 2014, your Company recorded a growth of 10% in consolidated revenues to reach Rs. 10,837.83 Lacs in financial year 2013-14 as compared to Rs. 9,856.18 Lacs in financial year 2012-13. The Company generated Rs. 1,338.88 Lacs in profits before exceptional items, extraordinary items and tax, an increase of 7% over the previous year''s profit of Rs. 1,256.74 Lacs. Profits after tax stood at Rs. 877.56 Lacs in the financial year 2013-14 and the same was at Rs. 4,347.83 Lacs in the previous year. The Previous year figure had one exceptional income of Rs.296.49 Lacs and extraordinary income of Rs.4,140.05 Lacs.

A detailed discussion on Operational and Financial performance of the Company for the year is given in "Management Discussion and Analysis" section of this Annual Report.

OPERATIONS

The Company witnessed growth across all its major specialties. Your Company continued its focus on Quality Parameters, Patient Care and Patient Welfare services resulting in significant improvement in patient satisfaction levels.

DIVIDEND AND TRANSFER TO RESERVES

During the year, the Board had declared Interim Dividend of Re 0.50 (fifty paisa) per share in its Board Meeting held on August 30, 2013 during the financial year 2013-14 which was duly paid to the members of the Company within the prescribed timelines under the statutory provisions. Keeping in view the growth strategy of the Company, the Board has not recommended any final dividend for the same financial year. No amount has been transferred to reserves.

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2014 under the "Malar Employees Stock Option Plan 2008" are set out in the Annexure-I to this Directors'' Report.

SUBSIDIARIES

During the Financial Year 2013-14, the Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include setting up, managing / administering hospital(s) and to provide Medicare and Health care services.

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

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the Subsidiary Company have not been attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Company and the related detailed information to any member of the Company who may be interested in obtaining the same.

The Annual Accounts of the Subsidiary Company and the related information are open for inspection by any member including the members of Subsidiary Company at the Registered Office of the Company and that of the subsidiary concerned, during working hours on all working days. The members, if they so desire, may write to the Company to obtain a copy of financials of the Subsidiary Company.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater emphasis on managing its affairs with diligence, transparency, responsibility and accountability. Your Company continues to strive hard to serve the interest of the stakeholders and the society at large, resulting in creation of value and wealth for all stakeholders at all times.

A detailed Report on Corporate Governance pursuant to Clause 49 of the Listing agreement forms part of the Annual Report. A Certificate from M/s. Sanjay Grover & Associates, Company Secretary in Whole-time Practice confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, is annexed with the said Corporate Governance Report.

DEPOSITS

During the year under review, your Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 / Companies Act, 2013 and Articles of Association of the Company, Dr. Nitiya Ramamurthy and Mr. Aditya Vij, retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, seeks re-appointment.

During the year under review, Mr. Ramesh Lakshman Adige, Mr. Sanjay Jayavarthanavelu, Mr. Murari Pejavar, Mr. Rama Krishna Shetty and Mr. Lakshmi Teckchand Nanwani are appointed as Independent Directors of the Company for a term of five consecutive years.

The Company has also received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed, both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchange. Accordingly, the above mentioned Independent Directors are appointed for a fixed tenure as per the details annexed to the notice of the Annual General Meeting.

A brief resume, nature of expertise, details of directorships / committee memberships held in other public limited companies of the directors seeking appointment / re-appointment along with their shareholding in the Company as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is appended as an annexure to the Notice of the ensuing Annual General Meeting.

STATUTORY AUDITORS AND AUDITORS'' REPORT

M/s. S. R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration No. - 301003E), Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting. They have expressed their inability to continue as the Statutory Auditors of the Company beyond the conclusion of the Annual General Meeting.

It is proposed to appoint M/s. S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. - 101049W) as the Statutory Auditors of the Company at the ensuing Annual General Meeting.

The Company has received letter from the proposed Auditors to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment.

Therefore the Board recommends the appointment of M/s S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. - 101049W), as the Statutory Auditors of the Company for the Financial Year 2014-15.

The Notes on Financial Statements referred to in the Auditor''s Report are self-explanatory and do not call for any further comments.

PARTICULARS OF EMPLOYEES

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are provided in the Annexure II to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

1. that in the preparation of the Annual Accounts for the year ended March 31, 2014, the applicable Accounting Standards read with requirements set out under Schedule VI of the Companies Act, 1956, have been followed and there are no material departures from the same;

2. that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit or loss of the Company for the year ended on that date;

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

4. that the directors have prepared the annual accounts of the Company on a going concern'' basis.

ACKNOWLEDGEMENT

The Board of Directors is grateful for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu. The Board also wishes to place on record its appreciation of the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its sincere appreciation to the members for their continued faith in the management of the Company.

For and on behalf of the Board of Directors

Date: July 26, 2014 Aditya Vij Place: Chennai Chairman


Mar 31, 2013

Dear Member''s,

The Directors have pleasure in present ing the Twenty Second Annual Report together with the Audited Standalone and Consolidated Financial Accounts of your Company f or the financial y ear ended March 31, 2013

FINANCIAL RESULTS

The highlights of Consolidated and Standalone Financial Results of your Company and its s ubsidiary are as follows:

(Rs. in Lacs) Particulars Consolidated Standalone For the year For the year For the year For the year ended ended ended ended March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012

Total Income 10,516.09 9,612.62 10,476.60 9,607.82

Total Expenditure 8,633.78 8,101.13 8,637.52 8,103.32

Profit Before Interest, Tax & 1,882.31 1,511.49 1,839.08 1,504.50

Depreciation

Less: Financial Cost 80.04 130.72 80.04 130.72

Less: Depreciation/ Provision for Obsolescence/Impairment 249.04 249.04 299.69 299.69

Profits before Extraordinary 1,553.23 1,081.08 1,510.00 1,074.09

items & Tax

Extraordinary item 4,140.05 4,140.05

Profits before Tax 5,693.28 1,081.08 5,650.05 1,074.09

Net Profits after tax 4,347.83 775.94 4,317.96 771.11

OPERATING RESULTS AND PROFITS

The sound performance of your Company is manifested in the Operating Revenue and Net Profits posted for the year under review. During the year ended March 31, 2013, your Company recorded a growth of 9% in consolidated revenues to reach Rs. 10,516.09 Lacs in financial year 2012-13 from Rs. 9612.62 Lacs in financial year 2011 -12. The company generated Rs. 1,553.23 lacs in Profit before extraordinary items and tax, an increase of 44% over the previous year''s profit of Rs. 1,081.08 Lacs. Profits after Tax increased to Rs. 4,347.83 Lacs mainly on account of extraordinary item arising on account of sale of Clinical establishment.

During the year, the Company witnessed moderate growth across all streams with significant growth in international revenues.

A detailed discussion on Operational and Financial Performance of the Company for the year is given in “Management Discussion and Analysis'' Section of this Annual Report.

OPERATIONS

The growth in occupancies and revenues with focus on efficiency and cost control has led to better performance during the quarter and year to date. It is heartening to note that this has been accomplished across each of the specialities. Your Company continued its focus on quality parameters and patient satisfaction.

DIVIDEND AND TRANSFER OF RESERVES

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

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2013 under the “Malar Employees Stock Option Plan 2008'' are set out in the Annexure – I to this Directors'' Report.

SUBSIDIARY

During the Financial Year 2012-13, the Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include setting up, managing / administering hospitals and to provide Medicare and health care services.

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

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary company are not been attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same.

The Annual Accounts of subsidiary company and the related information are open for inspection by any member including the members of subsidiary company at the registered office of the Company and that of subsidiary concerned, during the working hours on all working days. The members, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary company.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater emphasis on managing its affairs with diligence, transparency, responsibility and accountability. Your company continues to strive hard to serve the interest of the stakeholders and the society at large, resulting in creation of value and wealth for all stakeholders at all times.

A detailed report on Corporate Governance pursuant of Clause 49 of the Listing Agreement forms part of the Annual Report. A Certificate from M/s. Sanjay Grover & Associates, Company Secretary in Whole-time Practice confirming compliance of conditions of Corporate Governance

as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is annexed with the said Corporate Governance Report.

DEPOSITS

During the year under review, your Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

In accordance with the pro visions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Ramesh L. Adige and Mr. Murari P ejavar retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Since the last report, Mr. Sandeep Puri, Mr. Rama Krishna S hetty, Mr. Lakshman Teckchand Nanwani have been appointed as Additional Directors of the Company w.e.f. September 14, 2012, January 30, 2013 and March 29, 2013, respectively. Pursuant to the provisions of Section 260 of the Companies Act, 1956, they hold the office upto the date of the ensuing Annual General Meeting and are eligible for appointment as Director(s) of the Company in terms of Section 257 of the Companies Act,1956.

A brief resume, nature of expertise, details of directorships held in other public limited companies, of the directors seeking appointment / re-appointment along with their shareholding in the Company as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is appended as an annexure to the notice of the ensuing Annual General Meeting.

Dr. P.S. Joshi had resigned from the Directorship of the Company w.e.f. January 30, 2013. The Board wishes to accord its sincere appreciation for the valuable services and support rendered by him during his tenure as Director of the Company.

STATUTORY AUDITORS / AUDITORS'' REPORT

M/s. S R B C & Co. LLP, Chartered Accountants, Statutory Auditors of your Company will retire at the conclusion of the ensuing Annual General Meeting. They have informed their inability to continue as the Statutory Auditors of the Company beyond the conclusion of the Annual General Meeting.

M/s S.R. Batliboi & Co. LLP, Chartered Accountants have confirmed their willingness and eligibility for appointment and have also confirmed that their appointment, if made, will be within the limits under Section 224(1B) and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956.

The Board recommends the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for the financial year 2013-14.

PARTICULARS OF EMPLOYEES

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO:

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are provided in the Annexure II to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

As required under section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

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

(b) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the Profit or Loss of the company for that period;

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

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

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu. Your Directors also wish to place on record their appreciation for the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its sincere appreciation to the Shareholders for their continued faith in the management of the Company.

For and on behalf of the Board

Date : July 19, 2013

Place : Chennai Aditya Vij

Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Twenty First Annual Report on business operations together with the Audited Financial Statements and the Auditors' Report thereon of your Company for the financial year ended 31st March 2012.

FINANCIAL RESULTS

The highlights of consolidated financial results of your Company and its subsidiary are as follows:

(Rs. in Lakhs) For the year ended For the year ended Particulars 31st March 2012 31st March 2011

Total Income 9,607.38 8,369.49

Total Expenditure 8,095.89 7,118.29

Profit Before Interest Tax & Depreciation 1,511.49 1,251.20

Less: Financial Cost 130.72 143.43

Less: Depreciation/Provision for Obsolescence/Impairment 299.69 289.81

Profits before Tax 1,081.08 817.96

Net Profits after Tax 775.94 544.30

The highlights of financial results of your Company as a Standalone entity are as follows: (Rs. in Lakhs) For the year ended For the year ended Particulars 31st March 2012 31st March 2011

Total Income 9,602.58 8,369.49

Total Expenditure 8,098.08 7,120.22

Profit Before Interest, Tax & Depreciation 1,504.50 1,249.27

Less: Financial Cost 130.72 143.43

Less: Depreciation/Provision for Obsolescence/Impairment 299.69 289.81

Profits before tax 1,074.09 816.03

Net Profits after tax 771.11 542.97

OPERATING RESULTS AND PROFITS

The sound performance of your Company is manifested in the Operating Revenue and Net Profits posted for the year under review. During the year ended March 31, 2012, your Company recorded a growth of 15% in consolidated revenues to reach Rs. 9607.38 lacs in financial year 2011-12 from Rs. 8,369.49 lacs in financial year 2010-11. The company generated Rs. 775.94 lacs in net profits, an increase of 43% over the previous year's profit of Rs. 544.30 lakhs.

The growth has come from all the streams and mainly driven by Cardiac Sciences, Neuro sciences, Renal sciences, Orthopedics and Gynecology. The Health checks and regular MSOT procedures also showed a significant improvement in their revenue. Your Company has also witnessed significant progress in generating International Revenues.

OPERATIONS

The growth in occupancies and revenues with focus on efficiencies and cost control has led to better performance during the quarter and year to date. It is heartening to note that this has been accomplished across each of the specialities. Your Company continued its focus on quality parameters and patient satisfaction.

DIVIDEND AND TRANSFER OF RESERVES

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

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2012 under the "Malar Employees Stock Option Plan 2008" are set out in the Annexure-II to this Directors' Report.

SUBSIDIARIES

During the Financial Year 2011-12, the Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include setting up, managing / administering hospitals and to provide Medicare and health care services.

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

The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to Companies from complying with the provisions of Section 212 of the Companies Act, 1956, provided such Companies publish the Audited Consolidated Financial Statements in the Annual Report. Accordingly, in terms of general exemption, the Board of Directors of the Company, in its Meeting held on May 14, 2012, resolved that the Financial Statements and other required documents of the subsidiary company are not required to be attached with the Balance Sheet of the Company for this fiscal.

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

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

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

The Company is in the process of transferring the Clinical Establishment Division (which will own, operate, maintain clinical establishment along with providing out-patient and day care medical and healthcare services and radio-diagnostic services), on a going concern basis by way of a slump sale to Fortis Health Management Limited ("FHML").

In continuation to on-going internal corporate restructuring of the Fortis Healthcare Limited and its subsidiaries (which is being undertaken with an intent to align the Company with globally emerging trends and transforming into an asset light business model) and consequent to transfer of Clinic Establishment Division, the Company intends to focus its resources and energies on its division which shall run Fortis Malar Hospital, at Adyar, Chennai and provide medical services, including in-patient services and emergency services.

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

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

DEPOSITS

During the year under review, your Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

During the year under review, Mr. Aditya Vij has been appointed as an additional Director and the Chairman of the Company w.e.f. August 03, 2011 and Mr. Ashish Bhatia has been co-opted as an additional Director w.e.f. January 24, 2012. Pursuant to the provisions of Section 260 of the Companies Act, 1956, they hold the office upto the date of the ensuing Annual General Meeting and are eligible for appointment as Director(s) of the Company in terms of Section 257 of the Companies Act,1956.

Mr. V Vijayarathna has been appointed as an additional Director and a Whole-time Director by the Board of Directors at its meeting held on 10th July, 2012. Notice under Section 257 of the Companies Act, 1956, has been received from a member of the Company signifying his intention to propose the appointment of Mr. V Vijayarathna as Director of the Company at the ensuing Annual General Meeting of the Company.

Dr. Llyod Nazareth, Director and Mr. Krish Ramesh, Whole-time Director had resigned from the Directorship of the Company w.e.f January 24, 2012 and June 9, 2012 respectively. The Board wishes to accord its sincere appreciation for the valuable services and support rendered by them during their tenure as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Sanjay Jayavarthanavelu and Dr. Nithya Ramamurthy shall retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, they have offered themselves for re-appointment.

STATUTORY AUDITORS / AUDITORS' REPORT

M/s. S R B C & Co., Chartered Accountants, Statutory Auditors of your Company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment as Statutory Auditors for the financial year 2012-13.

The Company has received a letter dated May 14, 2012 from them to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224(1B) of the Act, and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Act.

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

The Notes on Accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comments.

DEMATERIALISATION OF SHARES

Your company has entered into agreements with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the shares of the Company. Accordingly the shares of your company are available for dematerialization and can be traded in Demat form. The ISIN for Equity shares of the Company is INE842B01015.

REPORT ON CORPORATE GOVERNANCE

Your Company continues to place greater emphasis on managing its affairs with diligence, transparency, responsibility and accountability. Your company continues to strive hard to serve the interest of the stakeholders and the society at large, resulting in creation of value and wealth for all stakeholders at all times.

The report of Board of Directors of the Company on Corporate Governance is given in the section titled "Report on Corporate Governance" forming part of this Annual Report.

Certificate of M/s Sanjay Grover & Associates, Company Secretary in whole-time practice regarding compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange is annexed with the said Corporate Governance Report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed review of operations, performance and future outlook of the company is given separately under the head "Management Discussion and Analysis" and forms a part of this report.

PARTICULARS OF EMPLOYEES

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

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm :

1. that in the preparation of the Annual Accounts for the year ended March 31, 2012, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

2. that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit or loss of the company for the period ended on that date;

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

4. that the directors had prepared the annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS/OUTGO

The particulars as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are set in the Annexure-I included in this report.

ACKNOWLEDGEMENT

Your company is grateful for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu.

The Board also wishes to place on record its appreciation of the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its sincere appreciation to the Shareholders for their continued faith in the management of the Company.

For and on behalf of the Board

Date : July 24, 2012 V Vijayarathna Nithya Ramamurthy

Place : Chennai (Whole-Time Director) (Director)


Mar 31, 2011

The Directors have pleasure in presenting the Twentieth Annual Report on business operations together with the Audited Financial Statements and the Auditors Report of your Company for the financial year ended March 31, 2011.

PERFORMANCE HIGHLIGHTS

The financial highlights of your Company on a consolidated basis for the year under review are given below:

(Rs. in Lakhs) Particulars For the year For the year ended March 31, ended March 31, 2011 2011

Total Income 8,369.49 6,424.48

Total Expenditure 7,114.77 5,462.20

Profit Before Interest Tax & Depreciation 1,254.72 962.28

Less: Financial Cost 143.43 163.51

Less: Depreciation/Provision for Obsolescence/Impairment 293.33 265.04

Profits before Tax 817.96 533.73

Net Profits after Tax 544.30 350.29

The financial highlights of your Company on a standalone basis for the year under review are given below: (Rs. in Lakhs)

Particulars For the year For the year ended March 31, ended March 31, 2011 2010

Total Income 8,369.49 6,424.48

Total Expenditure 7,116.70 5,462.64

Profit Before Interest, Tax & Depreciation 1,252.79 961.84

Less: Financial Cost 143.43 163.51

Less: Depreciation/Provision for Obsolescence/Impairment 293.33 265.04

Profits for the period 816.03 533.29

Net Profits 542.97 349.99

FINANCIAL PERFORMANCE

Your Company has done exceedingly well for the successive year, both in terms of Revenue and Profitability. During the year under review, your Company recorded a growth of 30% in consolidated revenues to reach Rs. 8,369.49 lakhs in Financial year 2010-11 from Rs. 6,424.48 Lakhs in Financial year 2009-10. The Company generated Rs. 544.30 lakhs in net profits, an increase of 55% over the previous years profit of Rs. 350.29 lakhs.

The growth in revenues and profits was an outcome of overall growth across various primary specialties which include Cardiac Sciences, Neuro Sciences, Renal Sciences, Gastroenterology, General Surgery and Diagnostics. The Health Checks and regular MSOT procedures contributed significantly to the revenues. Further, your Company also witnessed significant growth in revenues from International patients.

OPERATIONS

Your Company continued its focus on Patient Care and Patient Welfare Services resulting in significant improvement in Patient satisfaction levels. We continued our investment in renovation activities, upgradation of medical and engineering equipment. Your Company has started Tele-medicine services which would make available the best medical care to patients even to the remotest corner of India and abroad.

DIVIDEND AND TRANSFER OF RESERVES

In view of the unavailability of distributable profits, your Directors express their inability to recommend any dividend for the year. During the year under review, no amount has been transferred to reserves.

STOCK OPTIONS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2011 under the "Malar Employees Stock Option Plan 2008" are set out in the Annexure to this Directors Report.

SUBSIDIARIES

During the Financial Year 2010-11, your Company had only one subsidiary Company viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary includes setting up, managing / administering hospitals and to provide medicare and health care services. Exemption under Section 212(8) of the Companies Act, 1956:

The Ministry of Corporate Affairs, Government of India, vide its General Circular No. 2/2011 dated February 8,2011 has granted general exemption to the Companies from annexing the Accounts and other information of the subsidiaries along with Accounts of the Holding Company subject to the fulfillment of the conditions prescribed in the said Circular.

Claiming the said exemption, your Company has obtained the consent of its Board of Directors for not attaching the balance sheet of its subsidiary and has disclosed in the Consolidated Balance Sheet, the following information in aggregate for its subsidiary: (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend. The Annual Accounts of the Subsidiary Company and the related detailed information are open for inspection by any shareholder including the shareholder of subsidiary Company at the registered office of the Company and its subsidiary during the working hours on all working days. The Company will make available these documents to the shareholders including shareholders of subsidiary company upon receipt of request from them. The shareholders, if they so desire, may write to the Company to obtain a copy of financials of the subsidiary Company.

GROUP

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

a. Mr. Malvinder Mohan Singh;

b. Mr. Shivinder Mohan Singh;

c. Mrs. Japna Malvinder Singh Wife of Mr. Malvinder Mohan Singh;

d. Mrs. Aditi Shivinder Singh Wife of Mr. Shivinder Mohan Singh;

e. Escorts Heart and Super Speciality Hospital Limited;

f. Escorts Heart and Super Speciality Institute Limited;

g. Escorts Heart Centre Limited;

h. Escorts Heart Institute and Research Centre Limited;

I. Escorts Hospital and Research Centre Limited;

j. FortisAsia Healthcare Pte Limited;

k. Fortis C - Doc Healthcare Limited;

I. Fortis Emergency Services Limited;

m. Fortis Global Healthcare (Mauritius) Limited;

n. Fortis Global Healthcare Infrastructure Pte Ltd;

o. Fortis Health Management (East) Limited;

p. Fortis Health Management (North) Limited;

q. Fortis Health Management (South) Limited;

r. Fortis Health Management (West) Limited;

s. Fortis Health Management Limited;

t. Fortis Healthcare (India) Limited;

u. Fortis Healthcare Global Pte Ltd.;

v. Fortis Healthcare Holdings Limited;

w. Fortis Healthcare India Holdings Pte Ltd.;

x. Fortis Healthcare International Limited;

y. Fortis Healthcare International Pte Limited;

z. Fortis Hospital Management Limited;

aa. Fortis Hospitals Limited;

bb. Fortis Hospotel Limited;

cc. Fortis Malar Hospitals Limited;

dd. International Hospital Limited;

ee. Kanishka Healthcare Limited;

ff. Lalitha Healthcare Private Limited;

gg. Malar Stars Medicare Limited;

hh. Malav Holdings Private Limited;

ii. RHC Holding Private Limited;

jj. RHC Holding Pte Ltd.;

kk. Shivi Holdings Private Limited;

II. Super Religare Laboratories Limited.

DEPOSITS

During the year under review, your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

During the year under review, Mr. Bhavdeep Singh resigned from the Directorship and Chairmanship of the Company w.e.f January 10, 2011. The Board wishes to place its sincere appreciation for the valuable services and support rendered by him during his tenure as a Chairman and Director of the Company.

Further, in terms of nomination received from International Hospital Limited, the holding company, Dr. Lloyd Nazareth has been appointed as an Additional Director of the Company w.e.f. January 28, 2011. Pursuant to the provisions of Section 260 of the Companies Act, 1956, Dr. Lloyd Nazareth holds the office upto the date of the ensuing Annual General Meeting and is eligible for appointment as Director of the Company in terms of Section 257 of the Companies Act,1956.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Ramesh L. Adige and Mr. P. Murari shall retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, they have offered themselves for re-appointment.

STATUTORY AUDITORS / AUDITORS REPORT

M/s. K. Gopalan & Co, Chartered Accountants, the retiring Auditors have expressed their unwillingness to be appointed as Statutory Auditors of the Company after the conclusion of the ensuing Annual General Meeting on account of their preoccupations.

Accordingly, it is proposed to appoint M/s. S.R. Batliboi & Co, (Firm Registration No.324982E) Chartered Accountants, who, on being approached, have consented to act as Auditors of the Company and from whom a certificate has been received to the effect that their appointment, if made, will be within the limits prescribed under the provisions of section 224 (IB) of the Companies Act, 1956, in place of M/s. K. Gopalan&Co, Chartered Accountants, to hold office until conclusion of the nextAnnual General Meeting at a remuneration to be fixed by the Board.

The Auditors have, in their Report to the Shareholders on the Financial Statements of the Company, made the following comments:

ix) (a.) Except the Service tax covered in the Note 12of Schedule 15, undisputed statutory dues including provident fund, Income Tax, Cess and other material statutory dues have generally been regularly deposited during the period with the appropriate authorities. The Company has not fully remitted the service tax for the payments received. The arrears of service tax outstanding for more than six months as at the last day of financial year is%10.96 lacs.

The Company has been claiming service tax on dues from M/s. Star Health and Allied Insurance Co. Ltd. (TPA) under TNCM insurance scheme. There have been disputes on the quantum and applicability of service tax for Government Scheme patients. The management is in discussion with TPA and an amicable settlement is expected soon, otherwise the entire Service Tax dues will be paid within a weeks time.

VOLUNTARY DELISTING OF SHARES

The Madras Stock Exchange Limited (MSE), Chennai, vide its Letter dated November 18, 2010, approved the voluntary delisting application pending with it for a long time. The Companys Equity Shares shall continue to be listed on Bombay Stock Exchange Limited (BSE) which has nation wide trading terminals.

DEMATERIALISATION OF SHARES

Your Company has entered into agreements with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the shares of the Company. Accordingly, the shares of your Company are available for dematerialization and can be traded in Dematform.

REPORT ON CORPORATE GOVERNANCE

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

The Report of Board of Directors of the Company on Corporate Governance is given in separate section titled "Report on Corporate Governance which forms part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed review of operations, performance and future outlook of the Company is given separately under the head "Management Discussion and Analysis" and forms a part of this report.

DISCLOSURES UNDERSECTION 217 0F THE COMPANIES ACT, 1956

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

As required under Section 217(2) of the Companies Act, 1956, the Board of Directors informs the shareholders that during the period under review, no changes have occurred in the nature of the Companys business or in the business of the Companys subsidiary or in the nature of the business carried on by them and generally in the classes of business in which the Company has an interest.

Information in accordance with the provisions of section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is annexed to this Report. However, in terms of section 219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the Share holders excluding this Annexure. Any shareholder interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

DIRECTORSRESPONSIBILITY STATEMENT

As required under section 217(2 AA) of the Companies Act, 1956 the Directors hereby confirm that:

1. in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2011 and of the Profit or Loss of the Company for the period ended on that date;

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

4. the annual accounts have been prepared on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO:

The particulars as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are set in the Annexure included in this Report.

ACKNOWLEDGEMENTS

Your Company is grateful for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu. The Board also wishes to place on record its appreciation of the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its Sincere appreciation to the Shareholders for their continued faith in the management of the Company.

For and on behalf of the Board of Directors

Krish Ramesh Dr. Lloyd Nazareth

(WholeTimeDirector) (Director)

Place : Chennai Date : 16th May, 2011


Mar 31, 2010

The Directors present the Nineteenth Annual Report on business operations together with the Audited Financial statements and the Auditors Report of your Company for the financial year ended 31st March 2010.

PERFORMANCE HIGHLIGHTS

The financial highlights of your Company as a Consolidated for the year under review are given below:

Rs. in lakhs

For the year ended For the year ended

Particulars 31st March 2010 31st March 2009

Total Income 6,424.47 3,332.81

Total Expenditure 5,462.20 2922.14

Profit Before Interest Tax & Depreciation 962.27 410.67

Less: Financial Cost 163.51 71.88

Less: Depreciation / Provision for Obsolescence / Impairment 265.04 173.02

Profits / (Losses) before Tax 533.72 165.77

Net Profits / (Losses) after Tax 350.29 (175.72)

The financial highlights of your Company as a standalone entity for the year under review are given below:

Rs. in lakhs

For the year ended For the year ended

Particulars

31st March 2010 31st March 2009

Total Income 6,424.48 3,332.81

Total Expenditure 5,462.64 2922.14

Profit Before Interest, Tax & Depreciation 961.84 410.67

Less: Financial Cost 163.51 71.88

Less: Depreciation/Provision for Obsolescence/Impairment 265.04 173.02

Profits/(Losses) for the period 533.29 165.77

Net Profits/ (Losses) 349.99 (175.72)

FINANCIAL PERFORMANCE

In the current financial year ended 31st March, 2010, your Company has achieved a total income of Rs.6,424.48 lakhs as against Rs 3,332.81 lakhs during the previous Financial Year ended 31st March, 2009. The Net Profit before Tax and exceptional items for the period amounted to Rs. 533.72 lakhs as against Rs. 165.77 lakhs of the last Financial Year ended 31st March, 2009. The Net Profit of the company is at Rs.350.29 lakhs for these twelve months ended 31st March, 2010 against loss of Rs. 175.72 lakhs for corresponding period ending 31st March, 2009.

OPERATIONS

This yearthe company has invested substantially on renovation of the building and latest state of the art Medical Equipments. The company has refurbished the entire lobby and changed the look of the hospital and exterior covering signifcant portions of the building. The Patient Care Services underwent drastic improvements all of which resulted in improved service levels which in turn contributed to the excellent revenue growth and consequently leading to improved Profits to Rs.350.29 Lakhs against the Loss of Rs.175.72 Lakhs of previous year. All specialties grew compared to the previous year. The company has opened Information Centers across the State and also entered into foreign tie-ups with a view to enhance the International business. The business from international community has started fowing in and we are hopeful to get good amount of business from various countries in the succeeding years.

Number of Cardiac sciences showed a tremendous growth. Dr.K.R.Balakrishnan along with his Cardiac sciences team has performed complex surgeries. His patients includes infant to Geriatrics. As a measure of social responsibility we have tied up Government for conducting surgeries on infants/babies under the “Tamil Nadu Ilam Sirar Scheme”. We have also tied up with Government Insurance Scheme for BPL patients under “Kalaignar Insurance Scheme” under which many deserving patients availed the treatment.

DIVIDEND AND TRANSFER OF RESERVES

In view of the unavailability of distributable Profits, your Directors express their inability to recommend any dividend for the year. During the year under review, no amount has been transferred to reserves.

STOCK OPTION PLANS

Pursuant to the provisions of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, the details of stock options as on March 31, 2010 under the “Employees Stock Option Plan 2008” are set out in the Annexure to this Directors Report.

CHANGE OF NAME OF THE COMPANY

Your Company has been a Fortis Network Hospital since February 2008. Over the last 18 months, your Company under the guidance of new Board has revamped the infrastructure in its hospital in Chennai, added medical and non-medical talent, introduced new medical specialties and introduced processes and system to improve overall patient care. Fortis with its formidable Pan-India presence has established brand equity and systems and processes designed to provide international standard of quality and safety. With a view to position the hospital as a preferred destination for high end territory care in the region, your directors proposed to change the name of your Company from Malar Hospitals Limited to Fortis Malar Hospitals Limited which got approved by your overwhelming majority and also confrmed by the Registrar of Companies, Tamil Nadu by issuing a fresh Certifcate of Incorporation consequent upon change of name on 23rd day of December 2009.

SUBSIDIARIES

On, 7th July, 2009, your Company incorporated a wholly owned subsidiary viz. Malar Stars Medicare Limited. The main objects of the said wholly-owned subsidiary include to set up, manage / administer hospitals and to provide medicare and health care services. The statement pursuant to Section 212 of the Companies Act, 1956 is attached and forms part of the Annual Report.

In accordance with Accounting Standard 21 relating to consolidated financial statements your Directors have pleasure in attaching the said consolidated financial statements, which form part of this report and accounts. These statements have been prepared on the basis of audited financial statements received from the Subsidiary Company as approved by its Board.

DEPOSITS

During the year under review your Company has not accepted any deposits under Section 58Aof the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975.

DIRECTORS

Mr. Shivinder Mohan Singh resigned from the Directorship and Chairmanship of the Company w.e.f March 30, 2010 and Mr. Yogesh Kumar Sareen resigned from the Directorship of the Company w.e.f March 30, 2010. The Board wishes to record its sincere appreciation for the valuable services and support rendered by them during their tenure as a Chairman and Director of the Company respectively.

Mr. Bhavdeep Singh was appointed as an Additional Director and Chairman of the Company w.e.f. March 30, 2010.Pursuant to the provisions of Section 260 of the Companies Act, 1956, Mr. Bhavdeep Singh holds offce upto the date of the ensuing Annual General Meeting and is eligible for appointment as Director of the Company in terms of Section 257 of the Companies Act,1956.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Sanjay Jayavarthanavelu and Dr. Nithya Ramamurthy shall retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, they have offered themselves for re-appointment.

DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956

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

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is annexed to this Report. However, in terms of Section 219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding this annexure. Any shareholder interested in obtaining such information may write at the Registered Offce of the Company.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confrm that:

a) In the preparation of Annual Accounts, the applicable Accounting Standards have been followed.

b) Appropriate accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of its Profit for the period ended on that date.

c) Proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and preventing and detecting fraud and other irregularities.

d) The annual accounts have been prepared on a going concern basis.

AUDITORS

M/s. K. Gopalan & Co., Chartered Accountants, statutory auditors of the company, hold offce until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from M/s K. Gopalan & Co for their appointment/ reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualifed for such appointment/reappointment within the meaning of Section 226 of the said act.

The Notes on Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further comments.

VOLUNTARY DELISTING OF SHARES

The application for Delisting of securities of the Company from Madras Stock Exchange Limited (MSE), Chennai, is pending before Madras Stock Exchange Limited. The Companys Equity Shares shall continue to be listed at Bombay Stock Exchange Limited (BSE) which has nation wide trading terminals.

DEMATERIALISATION OF SHARES

Your company has entered into agreements with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the shares of the company. Accordingly the shares of your company are available for dematerialization and can be traded in Demat form.

REPORT ON CORPORATE GOVERNANCE

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

The Report of Board of Directors of the Company on Corporate Governance is given in separate section titled “Report on Corporate Governance 2009-2010” which forms part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion & Analysis is given separately and forms part of this Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS/OUTGO.

The particulars as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are set in the Annexure included in this report.

ACKNOwLEDGEMENTS

Your company is grateful for the co-operation and assistance extended by various Banks and the Government of Tamil Nadu. The Board also wishes to place on record its appreciation of the dedicated services of our consultants, employees and other members of the hospital. The Board also places on record its sincere appreciation to the Shareholders for reposing faith in the management of the Company.

For and on behalf of the Board

Place : Chennai Bhavdeep Singh

Date 14th May, 2010. Chairman


Mar 31, 2000

The directors wish to present the ninth annual report of the company along with the audited accounts for the period ended 31-03-2000.

FINANCIAL RESULTS

For the 18 months ended For the year ended 31.03.2000 30.09.1998 (Rs. in Lakhs)

Turn over 2407.88 1335.65

Profit before Interest & Depreciation 582.53 245.55

Financial Cost 2357.37 1139.52

Depreciati on 246.12 137.30

Income Tax -- --

Net Profit / (Loss) (2020.96) (1031.27)

Prior Period Expenses 0.75 (1.05)

Prior Period Income 0.44 (0.94)

Adjusted Net Profit / (Loss ) (2019-77) (1033.26)

It has been yet another difficult year for the sustenance although your hospital continued to retain the performance level as in the previous period. Inspite of heavy pressure on margins, your hospital continue to maintain its performance level for the period under review. In view of adverse situation and general recessionary trend in economy, the company could not avoid posting negative results. The focussed , friendly and personalised services to the patients continued to be the primary motto of the hospital. Malar Heart Foundation of Malar Hospitals Limited maintained its success stream with 99-55% in heart surgeries; other departments namely neurology, nephrology, oncology, etc also performed well for the period under review.

FINANCIAL RESTRUCTURING

Your board made a very sincere and conscious attempt to restructure the financial activities. The much sought after One Time Settlement proposal mooted by the financial institutions could not be successful during the past two years as there was dis-agreement between Indian Bank, the consortium member and other Financial Institutions.

Consequent upon recalling their loan amounts (Principle and Interest Component) IDBI, IFCI, ICICI and Indian Bank have filed suits in Debt Recovery Tribunal, Chennai / High Court, Mumbai.

Your directors without losing hopes once again put in their efforts and financial institutions responded with a revised package for the One Time Settlement Proposal. As per the revised package the negotiated amount of OTS payable to ICICI, IDBI and IFCI stands at Rs. 17.53 crores, of which your company has already made repayment of Rs. 3 crores as on date. You may kindly observe that the Financial Institutions are agreeable for a substantial portion of the interest dues and the same will be written back if your company makes the entire payment on or before 31.12.2000 as stipulated by the Financial Institutions.

With a view to attach significance to other allied activities, your hospital very recently constructed an auditorium inside the hospital complex so as to enable the consultants to have meaningful interaction on their profession. A nursing school is also likely to be established to impart training in nursing.

DIRECTORS

Prof.S.Kameswaran, Prof.Arcot Gajaraj and Shri. S.Thyagarajan are the directors who retire by rotation at the forthcoming Annual General Meeting and are eligible for re- appointment.

Y2K COMPLIANCE

On account of effective steps taken, the company did not face any problem relating to Y2K front.

NOMINATION

As per section 109 A and 109 B of the Companies Amendment Act, 1999 the shareholders of the company can nominate their successors. Shareholders may contact the registered office for obtaining nomination form, if necessary.

DEPOSITORY SERVICES

The Securities Exchange Board of India ( SEBI ) vide its circular no. SMDRP / POLICY / CIR - 23/2000 dated 29.05.2000 decided that your companys shares should be compulsorily traded in dematerialised form with effect from 25.09-2000. Your company has already entered into an agreement with the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) in this regard. You may also kindly note that Cameo Corporate Services Ltd. have been appointed as Electronic Connectivity Provider for the purpose of providing connectivity with NSDL and CDSL.

AUDITORS

M/s K.Gopalan & Co., Chartered Accountants, the Companys Auditors retire at the forthcoming Annual General Meeting and are eligible for re-appointment.

PARTICULARS OF EMPLOYEES AS PER SECTION 217 (2A) OF THE ACT FORMS PART OF THIS REPORT

None of the employees draw a salary exceeding the limit prescribed under Section 217C2A) of the Companies Act, 1956.

TECHNOLOGY ABSORPTION

As in the previous years the hospital, continues to absorb latest technology in Radiology, Neurology, Caridology, Nephrology, etc.

FOREIGN EXCHANGE EARNINGS AND OUTGO :

Amounts received from foreign patients Rs.9,75,372

Foreign Exchange Outgo Rs.l, 19,343

ACKNOWLEDGEMENT:

Your company is grateful for the co-operation and assistance extended by the Financial Insititutions, Banks and Government of Tamil Nadu. The board also wishes to place on record its appreciation of the dedicated service of our consultants, employees and other members of the hospital.

By Order of the Board

Place : Chennai Dr. S. RAMAMURTHY

Date : 23-08.2000 Chairman & Mg. Director

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