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Directors Report of Healthcare Global Enterprises Ltd.

Mar 31, 2023

The Directors are pleased to present the Twenty Fifth Annual Report of your Company together with the audited standalone and consolidated financial statements and the auditors'' report thereon for the financial year ended March 31, 2023.

1. Financial Highlights:

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

(INR in Million)
Consolidated	2022-23	2021-22
Income from operations including income from Govt. Grants	16,944.47	13,977.83
Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items	13,957.58	11,598.14
Profit including income from Govt. Grant and before other income, depreciation, interest cost, tax and exceptional items	2,986.89	2,379.69
Other income	131.84	126.67
Depreciation, Finance Charges and Exceptional items	2,669.75	1614.39
Share of (loss) of equity accounted investees	-0.18	-14.25
Profit before tax	448.80	877.72
Profit after tax attributable to the owners of the Company	293.49	537.33
Standalone
Income from operations including income from Govt. Grants	10,075.94	8,519.61
Total Expenditure excluding Depreciation, interest cost, tax and exceptional items	8,253.11	7,029.61
Profit including income from Govt. Grants and before other income, depreciation, interest cost, tax and exceptional items	1,822.83	1,490.00
Other income	8798	102.85
Depreciation, Finance Charges and exceptional items	1,334.60	782.44
Profit before tax	576.21	810.41
Profit after tax	401.91	382.53

2. Performance Overview:

The standalone and consolidated financial statements for the financial year ended March 31, 2023, forming part of this Annual Report, have been prepared in compliance with applicable provisions of the Companies Act, 2013 (''the Act"), Indian Accounting Standards ("Ind-AS") and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

Consolidated Operations:

The consolidated income from operations including income from government grant for FY 2022-23 was INR 16,944.47 million as compared to INR 13,977.83 million in the previous fiscal year, reflecting an increase of 2,96717 million with year-on-year increase of 21.23%. EBITDA in FY 2022-23 was INR 2,986.89 million as compared to INR 2,379.69 million in FY 2021-22, reflecting year-on-year increase of INR 6072 million. EBITDA margin for the year was 1763% as compared to 1702% in FY 2021-22, reflecting an increase of 0.61% year-on-year. Profit after tax in the current fiscal year was INR 293.49 million as compared to INR 53733 million in FY 2021-22. PAT for the year 2021-22 was mainly on account of exceptional gain amounting to INR 946.1 million.

Standalone Operations:

The standalone income from operations including government grants for FY 2022-23 was INR 10,075.94 million as compared to INR 8,519.61 million for the previous financial year, reflecting an increase of 18.27%. Our EBITDA before exceptional items for FY 2022-23 was INR 1,822.83 million with EBITDA margin of 18.09% as against INR 1,490.0 million for FY 2021-22 with EBITDA margin of 17.5%.

For more information, please refer to the Financial and Operating Highlights in Management Discussion and Analysis Report.

3. Business and Strategy:

3.1 Business:

The Company is a provider of speciality healthcare focused on cancer and fertility. Under the "HCG" brand, we operate the largest cancer care network in India in terms of the total number of private cancer treatment centres licensed by the AERB (Government of India, Atomic Energy Regulatory Board).

In our HCG network, our specialist physicians adopt a technology-focused approach to diagnosis and treatment. For instance, we use advanced technologies, including molecular pathology and molecular imaging for accurate diagnosis and staging of cancer, which enable us to decide upon the appropriate course of treatment for each patient. We also utilise targeted nuclear medicine therapies as well as advanced radiation treatments to minimise side effects and improve the outcome of treatments. By ensuring that we adopt these diagnostic and treatment technologies throughout our HCG network, we are able to provide consistent quality of care to all patients.

Given the large number of patient cases treated across our HCG network, we believe that we are able to efficiently utilise our equipment, technologies and human resources, thereby deriving economies of scale. We believe that our business model is scalable and when combined with efficient utilisation of resources, it enables us to operate within a competitive cost structure.

As a group, we continue to deliver the highest standards of clinical outcomes across all our centres. Our standardised clinical protocols for diagnosis and treatment of cancer patients have allowed us to manage the large volume of patient cases across our HCG network with successful clinical outcomes. Mapping our own clinical outcomes and constantly evolving HCG treatment guidelines has paved way for standardization of clinical pathways and improvement in the functioning of the clinical departments. We believe that we are able to attract and retain highly skilled specialist physicians due to our reputation for clinical excellence, our technology-focused approach, the exposure and experience we provide in relation to clinical best practices and the training programmes we offer for their ongoing development. We believe that the abilities and expertise of our team of specialist physicians differentiate us relative to our competitors.

We also provide fertility treatment under our "Milann" brand. Our Milann fertility centres provide comprehensive reproductive medicine services, including assisted reproduction, gynaecological endoscopy and fertility preservation; and follow a multidisciplinary and technology-focused approach to diagnosis and treatment. Our Milann network also operates on a model similar to our HCG network, wherein the various Milann fertility centres aim to provide medical services following established protocols with a focus on quality medical care across diagnosis and treatment.

As of March 31, 2023, our HCG network consisted of 22 comprehensive cancer centres (including Kenya), and 4 multispecialty hospitals across India. HCG''s comprehensive cancer centres provide expertise and advanced technologies for the effective diagnosis and treatment of cancer under one roof. Under the "Milann" brand, HCG operates 7 fertility centres. The details of our existing comprehensive cancer centres as on the date of this report and their facilities and service offerings, including those under development forms part of the Management Discussion and Analysis Report.

3.2 Strategy: Our strategy, includes, inter alia:

a) Expand the reach of our cancer care network in India:

We plan to expand our network in India by establishing cancer centres across India and by expanding the capacity and service offering of the existing HCG cancer centres. We carry out a competitive assessment of the markets in which HCG plans to expand the network, based on a number of factors, including the estimated incidence of cancer in the primary and secondary catchment population, the number of comprehensive cancer centres, if any, in the catchment; the average distance patients have to travel to avail of such comprehensive cancer care; affordability of healthcare generally and cancer care in particular; and the available third party payer options, whether corporate, government or private insurance. HCG will continue to expand its network through partnership arrangements and acquisitions; and that the past experiences will aid the management in identifying potential opportunities in the future and assist HCG in integrating new cancer centres into the existing HCG network. We believe that our planned network will cater to the increasing unmet demand for cancer care in India.

b) Strengthen our HCG brand to reach more cancer patients:

We believe that our HCG brand distinguishes us from our competitors; and one of the areas of focus is building our brand, enhancing our market presence, brand image and visibility. We intend to strengthen our patient support groups comprising cancer survivors to further spread awareness of cancer screening and to educate patients regarding cancer treatment options and their relative outcomes and benefits. Through these initiatives, we seek to further strengthen our brand and our commitment to the community, cancer patients and their families.

c) Technology adoption and strengthening our information technology infrastructure:

HCG has been at the forefront of the fight against cancer. An area of such intensity requires innovative treatments and methods, and the introduction of industrychanging technologies, for the overall benefit of both the medical expert and the patient. Cancer research is an area that requires more serious work and HCG aims to rise up to that challenge. In all its years of working in this field, HCG has led the march against cancer and set benchmarks in the industry, by introducing many new technologies, highly useful in increasing the accuracy and saving time. Cancer care is an important area in health care, and we aim to lead with our strong framework and technology infrastructure.

With regard to our information technology infrastructure, in order to enhance the quality of care delivered to patients and to further enhance our clinical best practices and research capabilities, we continuously

focus on upgrading and strengthening the information technology infrastructure. Our information technology infrastructure is based on a private cloud-computing system and encompasses a centralised EMR system seamlessly integrated with various other centralised systems including HIS and ERP system. We believe that this would maximise efficiencies through the greater integration of our network, help us fine tune protocols through knowledge sharing and collaboration, enhance our ability to conduct longitudinal research studies (which are long-term observational research studies), associate clinical outcomes with mutation and other genomic findings in cancer patient tissues maintained at our biorepository. We further believe that this will position us as a partner of choice for cancer researchers and academia.

4. Management Discussion and Analysis Report:

In terms of Regulation 34 of Listing Regulations, the Management Discussion and Analysis Report (MD&A) on the Company''s financial and operational performance, industry trends, business outlook and Initiatives and other material changes with respect to the Company and its subsidiaries, wherever applicable, are presented in separate section which forms part of the Annual Report. The MD&A Report provides a consolidated perspective of economic, social and environmental aspects material to its strategy and its ability to create and sustain value to your Company''s key stakeholders.

5. Transfer to Reserves and Surplus/Retained Earnings:

The movements in reserves and surplus/retained earnings are available in the Statement of Changes in Equity, which forms part of the financial statements.

6. Dividend:

The Company continues to look at growth prospects through new investment opportunities. Considering that consolidation is taking place in the healthcare industry in India, it presents us with more challenges in terms of growth and it is imperative that the Company looks at available

options for organic as well as in-organic growth. Achieving a consistent sustainable growth over the next few years and consolidating Company''s position competitively would be a key objective.

Keeping in view the growth strategy of the Company, the Board of Directors of your Company ("Board") have decided to plough back the profits and thus do not recommend any dividend for the financial year under review.

In terms of Regulation 43A of the Listing Regulations, the Company has adopted Dividend Distribution Policy setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of Dividend to the Shareholders and/or retaining profits earned by the Company. The said policy is hosted on the website of the Company at https://www.hcgoncology.com/policies-and-guidelines/.

7. Transfer of unpaid and unclaimed amount to IEPF:

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, dividend and refund of share application money due for refund which remains unpaid or unclaimed for a period of seven years from the date of its transfer to unpaid dividend/ unclaimed account is required to be transferred by the Company to Investor Education and Protection Fund (IEPF), established by the Central Government under the provisions of Section 125 of the Companies Act, 2013. During the year, no amount was due for transfer to IEPF.

8. Consolidated financial statements:

In accordance with the Companies Act, 2013 and the Companies (Indian Accounting Standards) Rules, 2015, the Company has been following the Indian Accounting Standards (Ind AS) for preparation of its financial statements from April 1, 2016.

9. Subsidiaries and Associates:

As on March 31, 2023, the Subsidiaries, Associates and Joint Venture Companies of the Company are as under:

Sl. No.	Name of the entity	Country of Incorporation	Primary business activity for which it was formed	% of ownership held by the Company as at March 31, 2023
1	HCG Medi-Surge Hospitals Private Limited	India	Cancer Care	74.00%
2	Malnad Hospital & Institute of Oncology Private Limited	India	Cancer Care	70.25%
3	HealthCare Global Senthil Multi Specialty Hospitals Private Limited	India	Cancer Care	100.00%
4	Niruja Product Development and Healthcare Research Private Limited	India	Research and Development	100.00%
5	BACC Health Care Private Limited	India	Fertility	100.00%
6	Suchirayu Health Care Solutions Limited	India	Multi Speciality	78.60%

Sl. No.	Name of the entity	Country of Incorporation	Primary business activity for which it was formed	% of ownership held by the Company as at March 31, 2023
7	HealthCare Diwan Chand Imaging LLP	India	Radiology/ Imaging	75.00%
8	HCG Oncology Hospitals LLP (formerly known as APEX HCG Oncology Hospitals LLP)	India	Cancer Care	100.00 %
9	HCG NCHRI Oncology LLP	India	Cancer Care	8714%
10	HCG Oncology LLP	India	Cancer Care	74.00%
11	HCG EKO Oncology LLP	India	Cancer Care	50.50%
12	HCG Manavata Oncology LLP	India	Cancer Care	51.00%
13	HCG SUN Hospitals LLP	India	Health Care Services (MultiSpecialty)	100.00%
14	HCG (Mauritius) Pvt. Ltd. (along with the shareholding of Niruja Product Development and Healthcare Research Private Limited)	Mauritius	Health Care Services	100.00%
15	Healthcare Global (Africa) Pvt. Ltd.	Mauritius	Health Care Services	100.00%
16	HealthCare Global (Uganda) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Uganda	Cancer care	100.00%
17	HealthCare Global (Kenya) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Kenya	Cancer care	100.00%
18	HealthCare Global (Tanzania) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Tanzania	Cancer care	100.00%
19	Cancer Care Kenya Limited (Subsidiary of HealthCare Global (Kenya) Private Limited)	Kenya	Cancer care	81.63%
20	Advanced Molecular Imaging Limited (HealthCare Global (Kenya) Private Limited holds 50% of the share capital)	Kenya	Production of Fluro Deoxi Glucose (FDG)	50.00%

As on March 31, 2023, none of the companies other than HCG Medi-Surge Hospitals Private Limited is a Material Subsidiary, within the meaning of Material Subsidiary as defined under the Listing Regulations, as amended from time to time. The Company has also formulated a policy for determining material subsidiaries. The said policy is also available on the website of the Company at: https://www. hcgoncology.com/policies-and-guidelines/.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of the Company''s subsidiaries and associates in Form AOC-1, that forms part of this Report is attached as Annexure 4. Pursuant to Section 129 of the Companies Act, 2013, the consolidated financial statements of the Company, prepared in accordance with the relevant accounting standards specified under Section 133 of the Companies Act, 2013 read with the Rules made thereunder, forms part of this Annual Report.

Further, pursuant to the provisions of Section 136 (1) of the Companies Act, 2013:

a) The Annual Report of the Company, containing therein its standalone and consolidated financial statements, is placed on the website of the Company, i.e., https:// hcgoncology.com/annual-reports/.

b) The audited financial statements of subsidiary companies together with related information and other reports of each of the subsidiary companies would be placed on the website of the Company https://www. hcgoncology.com/annual-reports/.

10. Acquisitions, Divestments, Investments

The Company, in October 2022, has acquired 11.14% from Nagpur Cancer Hospital and Research Institute Private Limited (NCHRI) and Dr. Ajay Mehta, minority partners of HCG NCHRI Oncology LLP ("LLP") increasing the Company''s stake in the LLP to 87.14% In this regard, the Company has executed an Amendment Agreement with NCHRI and Dr. Ajay Mehta.

There were no other entities that became subsidiaries, associates during the Financial Year.

11. Public deposits:

Your Company has not accepted any deposits from public in terms of Section 73 and 74 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014; and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

12. Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013:

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of Listing Regulations, disclosure on particulars relating to Loans/advances given, guarantees provided and investments made are provided as part of standalone financial statements of the Company.

13. Related party transactions:

In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a policy on related party transactions. This policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties.

All related party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for related party transactions on yearly basis for transactions which are of repetitive nature and entered in the ordinary course of business. All related party transactions entered during the year were in the ordinary course of business and at arm''s length basis. No material related party transactions were entered into by your Company during the year.

A statement giving details of all related party transactions, entered pursuant to the omnibus approval so granted, is placed before the Audit Committee for their review, on a quarterly basis. The policy on related party transactions has been hosted on the Company''s website https://www. hcgoncology.com/policiesandguidelines/ in terms of the Listing Regulations relating to Corporate Governance.

Disclosures as required under Section 134(3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in Form AOC 2 which is annexed herewith as Annexure 5 and forms part of the report.

Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed the reports on related party transactions with the Stock Exchanges.

14. Disclosure under Foreign Exchange Management (Non- Debt Instrument) Rules, 2019 ("NDI Rules"):

The Company has made preferential allotment of 2,95,16,260 equity shares and 1,85,60,663 warrants (convertible to equal number of equity shares) of the Company at INR 130 per equity share, aggregating to INR 625 Crore, to Aceso Company Pte. Ltd., Singapore ("Aceso"). Pursuant to the preferential allotment of shares to Aceso, and further acquisition of shares of the Company by Aceso through open offer, the Company has become a foreign owned and controlled company under Foreign Exchange Management (Non- Debt Instrument) Rules, 2019 ("NDI Rules") and other applicable laws, on September 08, 2020. The Company has

complied with the provisions relating to the same during the financial year, except to the extent provided under Sl. No. 37 (observations made by the Secretarial Auditor) of the Report.

15. Share Capital as on March 31, 2023:

15.1 Authorized Share Capital: As on the date of this report, the authorized share capital of the Company is INR 200,00,00,000 consisting of 20,00,00,000 equity shares of INR 10 each.

15.2 Issued, Subscribed and Paid-up Share Capital

The Issued, Subscribed and Paid-up Share Capital of the Company has increased form INR 139,01,19,920 consisting of 13,90,11,992 equity shares of INR 10 each on March 31, 2022 to INR 139,11,60,620 consisting of 13,91,16,062 equity shares of INR 10 each on account of the following allotments of securities made by the Board of Directors of the Company during the year.

The Board of Directors of the Company has allotted 4,000 equity shares on May 26, 2022, 64,770 equity shares on August 10, 2022, 12,175 equity shares on November 10, 2022 and 23,125 equity shares on February 09, 2023, upon exercise of ESOPs by the employees as per HCG ESOS 2014 and HCG ESOS 2021.

Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

16. Declaration by Independent Directors:

(B) of the Listing Regulations. The Company has received and taken on record, the necessary declaration from each of the independent directors under Section 149 of the Companies Act, 2013 that they meet with the criteria of their independence. In the opinion of the Board, Independent Directors fulfil the conditions specified in Companies Act, 2013 read with the Schedules and Rules made thereunder as well as in Listing Regulations and are independent from the management.

For the purpose of Rule 8(5) (iiia) of the Companies (Accounts) Rules, 2014, the Board of Directors are of the opinion that the independent directors possess requisite qualifications, experience, expertise and hold high standards of integrity. List of key skills, expertise and core competencies of the Board, including the Independent Directors is provided in the Corporate Governance Report, forming part of the Annual Report.

17. Annual Return:

The Annual Return of your Company as on March 31, 2023, in Form MGT- 7 as provided under sub-section (3) of Section 92 of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company at https://hcgoncology.com/ corporate/investor-relations/.

18. Board of Directors:

Composition of Board of Directors

Our Board comprises of directors with a broad range of skills, experience, backgrounds and perspectives. This mix of skills, knowledge and experience enriches the Board discussion and contributes towards a high performing and effective Board.

As on March 31, 2023, the composition of your Company''s Board has an ideal combination of Executive, Non-Executive and Independent Directors and thereby ensuring separation of management and governance while maintaining its independence. In compliance with the terms of the Listing Regulations, Independent Directors constitute 50% of the Board strength including an independent women director.

Type of Directorship	No. of Directors	% of Board strength
Executive Directors	3	30%
Non-Executive Non-Independent Directors	2	20%
Independent Directors	5	50%
Total	10	100%

All 5 (five) Independent Directors are free from any business, pecuniary or other relationship that could materially influence their judgment and satisfy the criteria of independence as defined under the Companies Act, 2013 and Listing Regulations. The Company has 2 (two) woman Directors on the Board, one of whom is an Independent Non-Executive Director and one is a Whole-time Director. The profiles of these Directors forms part of the Annual Report.

18.1 Directors appointed during the financial year:

During the financial year, there were no new appointments to the Board. The appointments to the Board after March 31, 2023, till the date of the report are as under:

(a) Mrs. Anjali Ajaikumar Rossi, Whole-time Director, has been reappointed as Executive Director, effective from April 01, 2023, for a period up to: (a) June 30, 2026, or

(b) termination of the employment of the ''Executive Chairman'' in accordance with Article 14.6 of Part B of the Articles of Association of the Company, whichever is earlier.

(b) Dr. B. S. Ajaikumar, Executive Chairman, has been reappointed, effective from July 01, 2023, for a period up to June 30, 2025, or until the occurrence of the events set out under Article 14.6 of Part B of the Articles of Association of the Company, whichever is earlier.

(c) Mr. Rajiv Maliwal has been appointed as an Independent Non-Executive Director on May 25, 2023, for a period of 3 years.

The Company has received necessary approvals from the shareholders for the appointment of all the directors.

18.2 Directors resigned or ceased to be a director due to the completion of the tenure, during the financial year till date:

Mr. Abhay Havaldar, Independent Non-Executive Director, has resigned from the Board of the Company, with effect from April 02, 2023. Mr. Abhay Havaldar has informed the Company that, considering his primary activity as an investor, he is required to join several other boards which unfortunately limits his ability to do justice to what is required to be an effective Board member of HCG, and that there are no other material reasons for his resignation from the Board. He has served as a director on the Board from August 20, 2020.

Members of the Board placed on record their appreciation for the remarkable support and guidance provided by Mr. Abhay Havaldar during his tenure as Director, and for his active participation in all the decision making processes of the Board.

18.3 Retirement by rotation:

Mr. Amit Soni (DIN: 05111144), Non-Independent NonExecutive Director of the Company and Mr. Meghraj Arvindrao Gore, Whole-time Director & CEO (DIN: 07505123), are liable to retire by rotation at the ensuing Annual General Meeting ("AGM") pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and being eligible offers herself for reappointment.

Appropriate resolutions for their re-appointment are being placed for the approval of the shareholders of the Company at the ensuing AGM. A brief profile of Mr. Amit Soni and Mr. Meghraj Arvindrao Gore and other related information is detailed in the Notice convening the 25^th AGM of your Company.

The Board considers the said re-appointments to be in the interest of the Company and hence recommends the same to the shareholders for approval.

19. Number of meetings of the Board:

The meetings of the Board are scheduled at regular intervals to decide and discuss on the business performance, policies, strategies and other matters of significance. The schedule of the meetings is circulated in advance to ensure proper planning and effective participation in meetings. In certain exigencies, decisions of the Board are also accorded through circulation.

The Board met 5 (five) times during the financial year 202223 viz., on May 26, 2022, August 10, 2022, November 10, 2022, February 09, 2023 and March 27, 2023. The maximum interval between any two meetings did not exceed 120 days.

Detailed information regarding the meetings of the Board and meetings of the Committees of the Board is included in the report on Corporate Governance which forms a part of the Board''s Report.

20. Key Managerial personnel:

In accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following were the Key Managerial Personnel of the Company as on March 31, 2023.

a) Dr. B. S. Ajaikumar - Executive Chairman,

b) Mr. Meghraj Arvindrao Gore - Whole-time Director and Chief Executive Officer,

c) Mr. Srinivasa V Raghavan - Chief Financial Officer and

d) Ms. Sunu Manuel - Company Secretary

21. Committees of the Board and their constitution:

During the financial year, the Board had the following six Committees. The Composition of the Committees of the Board along with relevant information pertaining to

Directors are detailed in the Corporate Governance Report which forms a part of this Report.

A. Audit Committee;

B. Nomination and Remuneration Committee;

C. Stakeholders'' Relationship Committee;

D. Corporate Social Responsibility Committee;

E. Strategy Committee; and

F. Risk Management Committee.

Keeping in view the requirements of the Companies Act, 2013 and Listing Regulations, as amended from time to time, the Board reviews the terms of reference of these Committees and the nomination of Board members to various Committees. The recommendations, if any, of these Committees are submitted to the Board for approval.

(A). Audit Committee

The Audit Committee of the Board reviews, acts on and reports to the Board with respect to various auditing and accounting matters. The scope and function of the Audit Committee is in accordance with Section 177 of the Companies Act, 2013, Regulation 18 of Listing Regulations, and have been detailed in the Corporate Governance Report, forming part of this Annual Report.

Audit Committee met 5 (five) times during the financial year 2022 -23. The meetings were held on May 25, 2022, July 11, 2022, August 09, 2022, November 09, 2022 and February 08, 2023. All recommendations made by the Audit Committee have been accepted by the Board of Directors.

The composition of the Audit Committee during FY 2022 - 23 and the attendance at the committee meetings are given in the below table.

Name	Position	Number of meetings attended
Ms. Geeta Mathur	Chairperson	5
Mr. Rajagopalan Raghavan	Member	4
Mr. Amit Soni	Member	5
Mr. Pradeep Kanakia	Member with effect from May 26, 2022	4

Notes:

Mr. Pradip Kanakia, Independent Director, was appointed as a member of the Audit Committee effective from May 26, 2022.

(B) Nomination and Remuneration Committee

The scope and function of the Nomination and Remuneration Committee is in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations.

Nomination and Remuneration Committee of the Board has met 5 (five) times during the financial year 2022-23. The meetings were held on May 26, 2022, August 10, 2022, November 10, 2022, February 09, 2023, and March 27, 2023.

The composition of the Nomination and Remuneration Committee and the attendance at the committee meetings during FY 2022-23 are given in the below table.

Name	Position	Number of
		meetings attended
Mr. Rajagopalan Raghavan	Chairperson	5
Mr. Siddharth Patel	Member	5
Dr. B. S. Ajaikumar	Member	5
Mr. Abhay Prabhakar Havaldar	Member	4
Ms. Geeta Mathur	Member	5
Mr. Jeyandran Venugopal	Member	4

Note:

(i) Mr. Abhay Havaldar, Independent Non-Executive Director has resigned from the Board of the Company with effect from April 02, 2023.

(ii) Mr. Pradip Kanakia, Independent Non-Executive Director has been appointed as a Member of the Nomination and Remuneration Committee with effect from May 16, 2023.

This Committee is constituted in compliance with Section 178 of the Companies Act, 2013 and Listing Regulations as Stakeholders'' Relationship Committee.

Stakeholders'' Relationship Committee of the Board has met once during the financial year 2022-23. The meeting was held on March 29, 2023. The Chairman of the Committee, Mr. Amit Soni is a non-executive director.

The composition of the Stakeholders'' Relationship Committee and their attendance at the Committee meetings during FY 2022-23 are given in the below table.

Name	Position	Number of
		meetings attended
Mr. Amit Soni	Chairman	1
Dr. B. S. Ajaikumar	Member	1
Mr. Abhay Havaldar	Member	1

Note:

(i) Mr. Abhay Havaldar, Independent Non-Executive Director has resigned from the Board of the Company with effect from April 02, 2023.

(ii) Mr. Rajagopalan Raghavan, Independent Non-Executive Director has been appointed as Member of the Stakeholders'' Relationship Committee with effect from June 28, 2023.

(D). Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee was constituted by our Board of Directors at their meeting held on May 29, 2015. The terms of reference of the Corporate Social Responsibility Committee of our Company are as per Section 135 of the Companies Act, 2013 and the applicable rules thereunder.

The Committee did not meet during the financial year 2022-23, as there was no CSR spend for the financial year.

The composition of the Corporate Social Responsibility Committee is given in the below table:

Name	Position
Dr. B. S. Ajaikumar	Chairman
Mr. Siddharth Patel	Member
Mr. Jeyandran Venugopal	Member

(E) Strategy Committee

The Committee was constituted by our Board of Directors at their Meeting held on May 26, 2016 with the scope of reviewing strategic initiatives; and for having an oversight of the strategic direction of the Company.

The members of the Committee shall be nominated by the Board of Directors with a right to appoint, replace the members from time to time. The Company Secretary shall act as the Secretary of the Committee. CFO shall be an invitee to the Committee Meetings and would provide support to the Committee in terms of financial analysis and planning.

The Committee has met four times during the financial year 2022-23. The meetings were held on May 23, 2022, August 09, 2022, October 31, 2022 and February 01, 2023.

The members of the Committee and their attendance at the Committee meetings during FY 2022-23 are given in the below table:

Name	Position	Number of meetings attended
Dr. B. S. Ajaikumar	Chairman	4
Mr. Siddharth Patel	Member	4
Mr. Amit Soni	Member	4
Ms. Anjali Ajaikumar Rossi	Member	3

(F) Risk Management Committee

The Board of Directors of the Company has constituted Risk Management Committee on June 17, 2021, to assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of strategic, operational, and external environment risks. The Committee has overall responsibility for monitoring and approving the enterprise risk management framework and associated practices of the Company.

Prior to the formation of the Risk Management Committee, the Audit Committee of the Board was overseeing the Risk Management function of the enterprise as a whole, and was called as Audit and Risk Management Committee. With effect from June 17, 2021, the Audit and Risk Management Committee is known as Audit Committee.

The Committee has met two times during the financial year 2022-23. The meetings were held on August 24, 2022 and January 16, 2023.

The composition of the Risk Management Committee and the attendance at the committee meetings during FY 2022-23 are given in the below table:

Name	Position	Number of
		meetings attended
Dr. B. S. Ajaikumar	Chairman	2
Mrs. Geetha Mathur.	Member	2
Mr. Raj Gore	Member	2

Details of terms of reference of the Committees, attendance at meetings of the Committees are provided in the Corporate Governance report. The Company Secretary acts as the Secretary of all the Committees of the Board.

22. Board Evaluation:

In terms of the requirement of the Companies Act, 2013 and the Listing Regulations, an annual performance evaluation of the Board was undertaken. The Board evaluation framework has been designed in compliance with the requirements under the Companies Act, 2013, and the Listing Regulations, and in consonance with Guidance Note on Board Evaluation issued by SEBI in January 2019. The Board evaluation was conducted through questionnaire having qualitative

parameters and feedback based on rating, where the Board has carried out annual evaluation of (i) its own performance; (ii) directors'' performance on an individual basis; (iii) Chairman of the Board; and (iv) performance of all committees of the board for the Financial Year 2022-23.

Evaluation of the Board was based on criteria such as composition and role of the Board, Board communication and relationships, functioning of Board committees, review of performance and compensation to Executive Directors, succession planning, strategic planning, Board culture, various aspects of the Board''s functioning, execution and performance of specific duties, obligations and governance etc.

Evaluation of Directors was based on criteria such as participation and contribution in Board and committee meetings, representation of shareholder interest and

enhancing shareholder value, experience and expertise to provide feedback and guidance to top management on business strategy, governance and risk, understanding of the organization''s strategy, risk and environment, level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The process also covered separate evaluation of Chairperson of the Board, Executive Directors, Non- Executive Directors and Independent Directors.

Evaluation of committees were based on criteria such as adequate independence of each of the committees, frequency of meetings and time allocated for discussions at meetings, functioning of Board committees and effectiveness of its advice/recommendation to the Board, etc.

The Board had, during the year, opportunities to interact and make an assessment of its functioning as a collective body. In addition, there were opportunities for committees to interact, for Independent Directors to interact amongst themselves and for each Independent Director to interact with the Chairman. The Board found that, there was considerable value and richness in such discussions and deliberations.

The Board Evaluation discussion was focused around how to make the Board and its committees more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was appraised of the business issues and the related opportunities and risks. The Board discussed various aspects of the functioning of the Board and its committees such as structure, composition, meetings, functions and interaction with the management and what needs to be done to further improve the effectiveness of the Board''s functioning.

Additionally, during the evaluation discussion, the Board also focused on the contribution being made by the Board as a whole, through its committees and discussions on a one on one basis with the Chairman.

The process of Board Evaluation was led by the Chairman of the Nomination and Remuneration Committee. The overall assessment of the Board was that it was functioning as a cohesive body including the committees of the Board that were functioning well with periodic reporting by the committees to the Board on the work done and progress made during the period. The Board acknowledged the efforts and contributions made by the Chairperson, Executive and Non- Executive Directors and Independent Directors towards the Company''s performance.

The Board also noted that the actions identified in the past evaluation had been acted upon. Subsequent to the evaluation done in the financial year 2022-23, given the changing external environment, some areas have been identified for the Board to engage itself with and these will be acted upon.

The Directors expressed their satisfaction with the evaluation process. Further, the evaluation process confirms that the

Board and its committees continue to operate effectively and the performance of the Directors and the Chair is satisfactory.

23. Risk Management and Enterprise Risk Management Policy:

Pursuant to Regulation 21 of Listing Regulations, your Company has developed and rolled out a comprehensive Enterprise Risk Management Policy. The policy aims at elimination or reduction of risk exposures through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures. The Risk Management and Steering Committee (RMSC) reviews the Company''s portfolio of risks and considers it against the Company''s risk appetite and recommends changes to the Risk Management technique and / or associated frameworks, processes and practices of the Company. The enterprise risk management process of the Company is progressing satisfactorily, but the entire process is yet to reach a level of maturity. RMSC also advises and guides the Company for making the process more robust and to achieve prudent balance between risk and reward in both ongoing and new business activities. The Risk Management Committee periodically reviews the risk management process.

For further details on the enterprise wide risk management framework, refer to Management and Discussion Analysis Report forming part of the Annual Report.

24. Company''s Policy on Appointment and Remuneration of Directors:

The Nomination and Remuneration Committee has framed a policy for Board Diversity, which lays down the criteria for appointment of Directors on the Board of your Company and guides organization''s approach to Board Diversity.

Your Company believes that Board diversity, basis the gender, race, age will help build diversity of thought and will set the tone at the top. A mix of individuals representing different industry experience, qualification and skill set will bring in different perspectives and help the organization grow. The Board of Directors is responsible for review of the policy from time to time. The policy on Board Diversity has been placed on the Company''s website at https://www. hcgoncology.com/policiesandguidelines/.

25. Compliance Management Framework:

For monitoring compliances to applicable laws, your Company has instituted an online compliance management system within the organization to monitor compliances and provide update to the senior management and Board on a periodic basis. The Audit Committee and the Board periodically monitor status of compliances with applicable laws.

26. Corporate Social Responsibility:

Your Company has been taking initiatives under Corporate Social Responsibility (CSR) for society at large, well before it has been prescribed thorough the Companies Act, 2013; and over the years, had been pursuing as a part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself and create an environment of partnership for inclusive development.

As per the provisions of Section 135 of the Companies Act, 2013, the Company has well defined policy on CSR which covers the activities as prescribed under Schedule VII of the Companies Act 2013. The CSR Policy is available on the website of the Company at https://www.hcgoncology.com/ policies-and-guidelines/.

The composition of CSR committee and disclosure as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is attached herewith as Annexure 6 and forms an integral part of this Annual Report.

27. Internal Audit:

Your Company has continued its engagement with M/s. Ernst & Young LLP, to conduct internal audit across the organization during the year under review. We have also strengthened the in-house internal audit team to supplement and support the efforts of M/s. Ernst & Young LLP.

28. Internal Financial Control system and their adequacy:

The management has laid down internal financial controls to be followed by the Company. We have adopted policies and procedures for ensuring the orderly and efficient conduct of the business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control system commensurate with the nature of business, size and complexity of operations and has been designed to provide reasonable assurance on the achievement of objectives in effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. In furtherance to this, your Company has instituted an online compliance management system within the organization to monitor compliances and provide update to senior management and Board on a periodic basis. The Audit Committee and the Board periodically monitor status of compliances with applicable laws.

As part of the Corporate Governance Report, CEO/ CFO certification is provided, for assurance on the existence of effective internal control systems and procedures in the Company.

The internal control framework is supplemented with an internal audit program that provides an independent view of the efficacy and effectiveness of the process and control environment and supports a continuous improvement program. The internal audit program is managed by an Internal Audit function; and the Audit Committee of the Board oversees the Internal Audit function.

The scope and authority of the Internal Audit Function is derived from the Audit Committee Charter approved by the Audit Committee of the Board. The Internal Audit function develops an internal audit plan to assess control design and operating effectiveness, as per the risk assessment methodology. The Internal Audit function provides assurance to the Board and management that a system of internal control is designed and deployed to manage key business risks and is operating effectively.

29. Whistle Blower/Vigil Mechanism for Directors and employees:

Section 177(9) and (10) of the Companies Act, 2013, mandates every listed company to establish a vigil mechanism for its directors and employees which shall function as a channel for receiving and redressing their complaints. The vigil mechanism provides for (a) adequate safeguards against victimization of persons who use the vigil mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.

Under this policy, we have adopted a vigil mechanism which would encourage our directors, employees and all other stakeholders to report any incidence of fraudulent financial or other information to the stakeholders, reporting of instance(s) of leak or suspected leak of unpublished price sensitive information, and any conduct that results in violation of the Company''s code of business conduct, to the management (on an anonymous basis, if employees so desire). Further, your Company has prohibited discrimination, retaliation or harassment of any kind against any employee who reports under the vigil mechanism or participates in the investigation.

Awareness of policies is created by, inter alia, training and sending group mailers highlighting actions taken by the Company against the errant employees. All complaints received through the whistle blower mechanism are reviewed and investigated by the Ombudsperson. Dedicated email address has been created to facilitate receipt of complaints directly by the Ombudsperson.

The Audit Committee periodically reviews the functioning of this mechanism. No individual in the Company has been denied access to the Audit Committee or its Chairperson.

This meets the requirement under Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of Listing Regulations.

Mechanism followed under the process is appropriately communicated within the Company across all levels and has been displayed on the Company''s intranet and website at https://www.hcgoncology.com/policies-and-guidelines/..

30. Code for Prevention of Insider Trading:

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by Designated Persons and their Immediate Relatives under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code of practices and procedures for fair disclosure of unpublished price sensitive information which has been made available on the Company''s website at https://www.hcgoncology.com/ policies-and-guidelines/.

31. Company''s Policy on Appointment and Remuneration of Directors:

The Nomination and Remuneration Committee has framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel (KMP), senior management personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

The Policy of the Company on the Director''s appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of section 178 of the Companies Act, 2013, is available on our website https://www.hcgoncology.com/policies-and-guidelines/. We affirm that the remuneration paid to Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

32. Particulars of employees:

The statement containing particulars in terms of Section 197 (12) of the Companies Act, 2013, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 for the year ended March 31, 2023 forms part of this Annual Report and is appended herewith as Annexure 3 to this Report.

A statement containing, inter alia, names of top ten employees and employees if employed throughout the financial year and in receipt of remuneration of INR 102 Lakhs or more, employees employed for part of the year and in receipt of INR 8.50 Lakhs per month or more, pursuant to Rule 5(2) the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is also provided in Annexure 3 to this report.

33. Significant or Material orders:

During the period under report, there were no material or significant orders passed by the Regulators/Courts/ Tribunals which would have an impact on the going concern status and operations of the Company in future.

34. Statutory Auditors:

The shareholders at the 19th (nineteenth) Annual General Meeting of the Company held on August 10, 2017, had approved the appointment of M/s. B S R & Co. LLP (Firm Registration No. 101248W/W-100022) as Statutory Auditors for a term of 5 (five) years commencing from the conclusion of the said Annual General Meeting of the Company, till the conclusion of the Annual General Meeting to be held in the year 2022.

Since the first term of M/s. B S R & Co. LLP, Chartered Accountants, as Statutory Auditor, was coming to an end at the Annual General Meeting held on September 29, 2022, the Board of Directors of the Company at their meeting held on May 26, 2022, on the recommendation of the Audit Committee, had approved the reappointment of M/s. B S R & Co., LLP, Chartered Accountants as Statutory Auditors, for a second term of 5 (five) consecutive years commencing from financial year 2022-23 and ending with financial year 2026-27, subject to the approval of shareholders.

The shareholders at the 24^th (Twenty Fourth) Annual General Meeting of the Company held on September 29, 2022, had approved the appointment of M/s. B S R & Co. LLP (Firm Registration No. 101248W/W-100022) as Statutory Auditors for a term of 5 (five) years commencing from the conclusion of the said Annual General Meeting of the Company, till the conclusion of the 29th (Twenty Nineth) Annual General Meeting to be held in the year 2027.

35. Statutory Auditors'' Report:

There are no qualifications, reservations or adverse remarks made by M/s B S R & Co. LLP., Statutory Auditors, in their report for the financial year ended March 31, 2023. The Auditors'' Report being self-explanatory does not call for any further comments from the Board of Directors, except for the following:

(a) Title deeds of immovable properties disclosed in the standalone financial statements are held in the name of the Company, except for title deeds of the properties of the Company in Ahmedabad, Bengaluru and Vijayawada. Please refer to Clause (i) (c) of Annexure A to the Independent Auditor''s Report on the Standalone Financial Statements of the Company, and Clause (xxi) of Annexure A to the Independent Auditor''s Report on the Consolidated Financial Statements of the Company for the year ended 31 March 2023, for the observations in detail.

(b) Proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears on their examination of those books and the reports of the other auditors, except that the back-up of Tally with respect to a subsidiary incorporated in India, whose financial statements reflects total assets (before consolidation adjustments) of I NR 55275 million as at 31 March 2023 and total revenues (before consolidation adjustments) of INR 663.29 million for the year ended on that date, as considered in the consolidated financial statements, which form part of the ''books of account and other relevant books and papers in electronic mode'' have not been maintained on the servers physically located in India on a daily basis. The back-up of Tally has been maintained on the servers physically located in India as at the year end. Please refer to Sl. No.2 A(b) under the Report on Other Legal and Regulatory Requirements to the Independent Auditor''s Report on the Consolidated Financial Statements of the Company, for the observation in detail.

In this regard, the Board of Directors places its response as

under:

(i) With respect to the observation under (a) above on the tittle deeds not in the name of the Company, all the three properties were owned by the subsidiaries of the Company viz., HCG Medi-surge Hospitals Private Limited (Ahmedabad), Banashankari Medical and Oncology Research Centre Private Limited (Bengaluru) and Healthcare Global Vijay Oncology Private Limited (Vijayawada).

Banashankari Medical and Oncology Research Centre Private Limited (Bengaluru) and Healthcare Global Vijay Oncology Private Limited (Vijayawada) have been amalgamated with the Company, and on account of the amalgamation, all the properties of these two companies have been transferred to the Company as per the order of the respective High Courts sanctioning the amalgamation. With respect to the property in Ahmedabad, it was owned by HCG Medi-surge Hospitals Private Limited, a subsidiary of the Company, where the legal ownership of the property has been transferred to the Company on account of the demerger of the multi-specialty business of HCG Medi-surge Hospitals Private Limited.

As per the Scheme of Amalgamation/Demerger as approved by the High Court, in respect of such of the assets belonging to the Transferor Company, the same shall, without any further act, instrument or deed, be transferred to and stand vested in and / or be deemed to be transferred to and stand vested in the Transferee Company. However, the Company is in the process of updating the name of the Company in the title deeds of these properties as required under local jurisdictional authorities.

(ii) Regarding the observation on the maintenance of back up of Tally, this is with respect to BACC Health Care Private Limited, a wholly owned subsidiary of the Company (BACC), which is into the business of IVF, advanced diagnosis and treatment in the field of Assisted Reproduction Technology. IVF is one of the businesses which HCG entered into a decade ago and the business faced severe challenges last year given a rampant regulatory change which had taken the entire industry by storm. The Business stood up to the challenge and ensured all the regulatory compliances are duly met and has started to do quite well in the past few months, again.

BACC has a fully integrated Hospital Information System (HIS) which captures operational as well as certain financial information from the root level. This is the backbone of BACC''s operations, and this application has been ring-fenced with all the adequate support infrastructure including maintenance, upgrades, backup etc. BACC uses Tally as its accounting software where entries are passed based on the information in the HIS and other data points. Tally is being backed up on a daily basis, while the HIS has been backed up on a daily basis. There were no instances of any information loss, or such matters due to Tally not being backed up daily, earlier. HCG places utmost emphasis on adoption of Information Technology tools to foster growth of the business as appropriate.

Further, the Statutory Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or reenactment (s) for the time being in force).

36. Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report:

No material changes and commitments, other than disclosed as part of this report, affecting the financial position of the Company have occurred between March 31, 2023 and the date of the report. There has been no change in the nature of business of the Company during the last financial year.

37. Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. V. Sreedharan, Partner, M/s V. Sreedharan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended March, 31, 2023. The said Report of the Secretarial Auditor in Form MR 3 as required under Section 204 of the Companies Act, 2013 read with Regulation

24A(1) of the Listing Regulations is annexed herewith as Annexure 1 and forms part of the report.

The Secretarial Auditors, in their report for the financial year ended March 31, 2023, have observed that:

As per Regulation 11(b) of Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 read with Rule 23(6) of Foreign Exchange Management (Non-Debt Instruments) Rules,2019, the first level Indian Company making downstream investment shall file Form DI with the Reserve Bank of India(RBI) within 30 days from the date of allotment of equity instruments.

The Company has made downstream investments in 3 of its subsidiaries during the year. Though (2) two of the subsidiaries of the Company had filed Form DI earlier (other than the LLP), those filings were rejected by the Authorized Dealer Bank, requiring these subsidiaries to file Form DI in relation to the investments made by the Company prior to becoming a Foreign Owned Controlled Company (''FOCC''). These 2 subsidiaries have again filed the form DI on August 04, 2023, including those for investments made prior to the Company becoming a FOCC, and is waiting for any further updates from Authorized Dealer/ RBI.

With respect to the other subsidiary - HCG Sun Hospitals LLP (LLP), the LLP had not filed Form DI for the investment made by the Company on February 06,2023, as on March 31, 2023. However, the LLP has filed the form DI on August 04, 2023, including those for investments made prior to the Company becoming a FOCC, and is waiting for any further updates from Authorized Dealer/ RBI

In this regard, the Board of Directors would like to inform that the Company was unable to complete the filings within the due date, on account a new requirement of the Authorized Dealer Bank (AD Bank) requiring the subsidiaries of the Company to file Form DI for all the investments made by the Company prior to the Company becoming a FOCC. The subsidiaries of the Company had been filing Form D1 from December 2020 till December 2022, and the AD Bank had never come up with such a requirement, earlier.

As per The Master Direction - Reporting under Foreign Exchange Management Act, 1999, states that "An Indian entity or an investment vehicle making downstream investment in another Indian entity which is considered as indirect foreign investment shall file Form DI with the Reserve Bank within 30 days from the date of allotment of equity instruments."

Regulation 4(11) of Foreign Exchange Management (Mode of payment and reporting of non-debt instruments) Regulations, 2019 provides that: "The reporting requirement for any Investment in India by a person resident outside India shall be as follows: Form DI: An Indian entity or an investment Vehicle making downstream investment in another Indian entity which is considered as indirect foreign investment for the investee Indian entity in terms of Rule 22 of the Rules shall file Form DI with the Reserve Bank within 30 days from the date of allotment of equity instruments."

The user manual for the FIRMS Portal for reporting in Form DI refers to the date on which the investment became indirect foreign investment having to be reported, along with the date of allotment. It is not clear if this is intended to cover past allotments as well.

The Company has separately checked with some authorised dealers and have been informed that the position in this regard is not clear, and different authorised dealers have taken different positions on this at different points of time.

In our view, the requirements of the RBI Master Directions indicate that the filing is to be made at the time of the downstream investment being undertaken, and not in respect of prior investments. However, as mentioned above, the feedback from authorised dealers in this regard is that the position does not appear to be certain.

In view of this uncertainty and lack of clarity, the Company has filed Form DI as per the advice of the Authorized Dealer, and as a measure of abundant caution.

Pursuant to Regulation 24A(2) of the Listing Regulations, the Secretarial Compliance Report, issued by M/s. V. Sreedharan & Associates, Practicing Company Secretaries, Bengaluru is annexed herewith as part of Annexure 1.

Other than the above, there are no other qualification, reservations or adverse remarks made by M/s. V. Sreedharan and Associates, Practicing Company Secretaries, Secretarial Auditor of the Company in their Secretarial Compliance Report, and all the other information that have been included in the certificate are self-explanatory.

The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) with effect from 1st October 2017. The Company has devised proper systems to ensure compliance with its provisions and is in compliance with the same. Your Company has complied with the applicable Secretarial Standards relating to ''Meetings of the Board of Directors'' and ''General Meetings'' during the year.

In compliance with the requirements of Listing Regulations, Secretarial Audit Report of Material Subsidiary Company viz., HCG Medi-Surge Hospitals Private Limited is also attached herewith as Annexure 8 and forms an integral part of this Annual Report. The Secretarial Audit Report of HCG Medi-Surge Hospitals Private Limited is self- explanatory and does not contain any qualification, reservation or adverse remark.

38. Cost Records and Cost Auditor:

In terms of the Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. Accordingly, such accounts and records were made and maintained for the financial year 2022-23.

The remuneration of M/s. Rao, Murthy & Associates, Cost Auditors of the Company for FY 2022-23, amounting to INR 1,75,000 (Rupees One Lakh Seventy-Five Thousand Only) (exclusive of taxes and re-imbursement of actual out-ofpocket expenses) in connection with the cost audit for FY

2022- 23 has been ratified by the shareholders, at the AGM held on September 29, 2022.

Cost Audit Report for the financial year ended March 31, 2022 has been filed with the Registrar of Companies.

The board of Directors on the basis of the recommendations from Audit Committee has appointed M/s. Rao, Murthy & Associates (Firm Registration No. 00065), Costs Accountants as the Cost Auditors of the Company for FY

2023- 24 at a remuneration of INR 1,75,000 (Rupees One Lakh Seventy-Five Thousand Only) (exclusive of taxes and re-imbursement of actual out-of-pocket expenses, if any, subject to the ratification of the said fees by the shareholders at the ensuing AGM.

39. Particulars regarding Conservation of energy, Technology absorption and Foreign exchange earnings and outgo as per Section 134(3)(m) of the Companies Act, 2013:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act,

2013 read with Rule 8 of the Companies (Accounts) Rules,

2014 is detailed in Annexure 7.

40. Prevention of Sexual Harassment Policy:

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company conducts sessions for employees to build awareness amongst employees about the Policy and the provisions of Prevention of Sexual Harassment of Women at Workplace Act. The Company''s process ensures complete anonymity and confidentiality of information.

The below table provides details of complaints received/ disposed during the financial year 2022-23.

Number of complaints pending at the beginning of the financial year	0
No. of complaints filed during the financial year	5
No. of complaints disposed during the financial year	5
No. of complaints pending at the end of the	0
financial year

41. Green initiative:

All agenda papers for the Board and committee meetings are disseminated electronically on a real-time basis.

The information regarding the performance of the Company is shared with the shareholders vide the Annual Report. The Annual Reports for FY 2022-23 are being sent in electronic mode, to all members who have registered their email ids for the purpose of receiving documents / communication in electronic mode with the Company and/or Depository Participants. The Annual Reports are also available in the "Investor Relations" section on the Company''s website https://www.hcgoncology.com/annual-reports/.

The General Circular No. 14/ 2020 dated April 8, 2020, the General Circular No. 17/2020 dated April 13, 2020, the General Circular No. 22/2020 dated June 15, 2020, the General Circular No. 33/2020 dated September 28, 2020, the General Circular No. 39/2020 dated December 13, 2020, the General Circular No. 10/2021 dated June 23, 2021, the General Circular No. 20/2021 dated December 08, 2021, the General Circular No. 3/2022 dated May 05, 2022 and the General Circular No. 11/2022 dated December 28, 2022 in relation to "Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and the rules made thereunder on account of the threat posed by COVID - 19" issued by the Ministry of Corporate Affairs, Government of India have permitted Companies to dispatch the Notice calling General Meeting and Annual Report by e-mail only.

The Company had during FY 2022-23 sent various communications including Annual Reports, by email to those shareholders whose email addresses were registered with the Company/Depositories. In support of the ''Green Initiative'' the Company encourages Members to register their email address with their Depository Participant or the Company, to receive soft copies of the Annual Report, Notices and other information disseminated by the Company, on a real-time basis without any delay.

We are also in the process of starting a sustainability initiative with the aim of being carbon neutral and minimize our impact on the environment. Sustainability practices will be implemented and tracked diligently to ensure that we comply with the goals we set for ourselves.

42. Employee Stock Option Schemes:

As required under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the applicable disclosures as on March 31, 2023 are annexed to this Report as Annexure 2.

42.1 HCG ESOS 2014: Pursuant to regulation 12(1) of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014, the Company has obtained the approval of the members at the Annual General Meeting held on September 29, 2016, for ratifying Employee Stock Option Scheme of the Company (HCG ESOS 2014), the pre-IPO plan. HCG ESOS 2014 is in compliance with Securities and Exchange Board of India (Share Based

Employee Benefits) Regulation 2014 and there have been no material changes to the plan during the financial year.

42.2: HCG ESOS 2021: The Board of Directors of the company, on February 11, 2021, approved the new Employee Stock Options Scheme titled "HCG Employee Stock Option Scheme - 2021" (HCG ESOS 2021). The HCG ESOS 2021 allows the issuance of options to employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The shareholders have approved HCG ESOS 2021 vide Postal Ballot on May 23, 2021.

As per the Scheme, the Nomination and Remuneration Committee can grant the options to the employees deemed eligible. The Exercise Price shall be a price that is not less than the face value per share per option. Under the HCG ESOS 2021, a maximum of 62,67,000 (Sixty-Two Lakh Sixty-Seven Thousand Only) Options can be Granted exercisable into 62,67,000 (Sixty-Two Lakh Sixty-Seven Thousand Only) Equity Shares of face value of INR 10 (Rupees Ten only) each. Vesting of Options would be a function of continued employment with the Company (passage of time) and achievement of performance criteria as specified by the Nomination and Remuneration Committee as communicated at the time of grant of options. The option holders may exercise those options vested within a period of 7 years from the date of grant, while in employment.

The Nomination and Remuneration Committee of the board evaluates the performance and other criteria of employees and approves the grant of options based on the recommendation of the Strategy Committee. These options vest with employees over a specified period subject to fulfilment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company''s shares at a price determined on the date of grant of options. Upon HCG ESOS 2021 coming into force, it has been decided that no future grants shall be made under HCG ESOS 2014.

The cost is determined by the fair value at the date when the grant is made using an appropriate valuation model and management''s estimate of equity instruments that will vest. That cost is recognised over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. Total stock compensation cost for the year ended March 31, 2023 is INR 59.69 million (FY 2021-22: INR 28.33 million).

No employee was issued stock options during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The stock option plans are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended and there have been no material changes to these plans during the financial year.

Disclosures on various plans, details of options granted, shares allotted upon exercise, etc. as required under the Employee Benefits Regulations read with Securities and Exchange Board of India circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 are available on the Company''s website at httpsf://www.hcgel.com/investors/.

43. Director''s Responsibility Statement:

Pursuant to Section 134 (3) (C) and 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year under review;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant Board committees, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2022-23.

44. Corporate Governance:

Your Company places utmost importance on its fiduciary role as a guardian of stakeholders'' interest and strives to achieve a mutually aligned objective of value and wealth creation for all interested parties. The Board and the Management humbly acknowledges this role and continues to propagate this belief through all layers of the organization to create an environment of accountability and trust.

These responsibilities continue to be the focus of its attention through the tumultuous ride along the path of expansion, ensuring the highest standards of ethics and integrity in all its business dealings while avoiding potential conflicts of interest. The result of this is a corporate structure which serves its ever-expanding business needs while maintaining transparency and adherence to the above stated beliefs.

A Report on Corporate Governance has been appended to this report and forms an integral part of this Report. As required by Regulation 17(8) read with Schedule II Part B of the Listing Regulations, the Executive Chairman, Wholetime Director & Chief Executive Officer and Chief Financial Officer have given appropriate certifications to the Board of Directors.

Further, pursuant to Regulation 34(3) of Listing Regulations read with Part E of Schedule V of the Listing Regulations, a certificate from M/s. V. Sreedharan, Partner, V Sreedharan & Associates, (CP Number 833), Bengaluru, Practicing Company Secretaries certifying the compliance with various provisions of the Corporate Governance is annexed to this Report.

The Company has received a certificate from M/s. V. Sreedharan, Partner, V Sreedharan & Associates, (CP Number 833) Bengaluru, Practicing Company Secretaries, pursuant to clause 10(i) of Part C under Schedule V of Listing Regulations that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India or the Ministry of Corporate Affairs or any such statutory authority and same forms part of the Corporate Governance Report.

45. Business Responsibility and Sustainability Report

In November 2018, the Ministry of Corporate Affairs (MCA) constituted a Committee on Business Responsibility Reporting ("the Committee") to finalize business responsibility reporting formats for listed and unlisted companies, based on the framework of the National Guidelines on Responsible Business Conduct (NGRBC). Through its report, the Committee recommended that BRR be rechristened BRSR, where disclosures are based on Environmental, Social and Governance (ESG) parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting. SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from the financial year 2022-23.

Your Company has, on a voluntary basis, opted for the BRSR report for Financial Year 2021-22 and has provided as a separate section for the same. BRSR report for Financial Year 2022-23 forms an integral part of this Annual Report.

46. Disclosure related to Insolvency and Bankruptcy.

During the financial year under review, there are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.

47. Declaration on Code of Conduct:

The Company has adopted the Code of Conduct for all its Senior Management Personnel and Directors and the same is affirmed by all the Board members and senior management personnel as required under Regulation 34 read with Part D of Schedule V of the Listing Regulations. A declaration signed by Dr. B. S. Ajaikumar, Executive Chairman and Mr. Raj Gore, Whole-time Director and CEO of the Company affirming the compliance with the Code of Conduct of the Company for the financial year 2022-23 has been annexed as part of this Report.

48. OTHER DISCLOSURES

a) . Your Company has not issued shares with differential

voting rights and sweat equity shares during the year under review.

b) . Your Company has complied with the applicable

Secretarial Standards relating to ''Meetings of the Board of Directors'' and ''General Meetings'' during the year.

c) . There were no instances where your Company required

the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

49. Acknowledgements and Appreciations:

We stay committed to partnering for value creation and take this opportunity to thank one and all who have participated in our journey this far. Your Directors desire to place on record, its sincere appreciation to all employees at all levels, who with sustained dedicated effort and hard work, enabled the Company to deliver a good all-round performance. Your Directors also wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by the vendors, business associates, consultants, bankers, regulatory and government authorities, shareholders and investors at large and look forward to their continued support. We also take this opportunity to express sincere thanks to the medical fraternity and patients for their continued co-operation, patronage and trust reposed in the Company and its healthcare services.

For and on behalf of the Board of Directors

Date: August 10, 2023 Dr. B. S. Ajaikumar

Place: Bengaluru Executive Chairman

Mar 31, 2018

Dear Members,

The Directors are pleased to present the Twentieth Annual Report of your Company together with the Audited Standalone and Consolidated Financial Statements and the Auditorsâ Report thereon for the financial year ended March 31, 2018.

1. Financial Results:

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

Consolidated	2017-18 (Rs. in millions)	2016-17 (Rs. in millions)
Income from operations	8,306.9	7,001.1
Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items	7,118.6	5,951.2
Profit before other income, Depreciation, Interest cost, tax and exceptional items	1,188.2	1,049.9
Other income	128.0	96.7
Depreciation, Finance Charges and exceptional items	1,030.4	798.2
Share of (loss) of equity accounted investees	(14.0)	-
Profit before tax	271.8	348.4
Profit after tax before share of profit of minority interest	169.4	230.4
Standalone
Income from operations	5,868.7	5,450.4
Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items	4,981.4	4,623.6
Profit before other income, Depreciation, Interest cost, tax and exceptional items	887.3	826.7
Other income	159.3	67.2
Depreciation, Finance Charges and exceptional items	677.8	600.9
Profit/(Loss) before tax	368.6	293.0
Profit/(Loss) after tax	248.8	194.8

2. Performance Overview Consolidated Operations:

The consolidated income from operations for FY 2017 - 18 was Rs.8,306.9 million as compared to Rs.7,001.1 million in the previous fiscal year, reflecting a growth of 18.7%. EBITDA in FY 2017-18 was Rs.1,188.2 million as compared to Rs.1,049.9 million in FY 2016-17, reflecting a year-on-year increase of 13.2%. EBITDA margin for the year was 14.3% as compared to 15.0% in FY 2016-17, reflecting a decrease of 70 basis points primarily due to the losses incurred by new centres. PAT in the fiscal year was Rs.169.4 million as compared to Rs.230.4 million in FY 2016-17.

The revenue growth was driven by 19.1% growth from HCG Centres (including the multi-specialty hospitals) while the Milann centres contributed growth of 13.5%. HCG Centres constituted 92% of the consolidated revenues for the Company and the remaining 8% of the consolidated revenue was contributed by Milann Centres.

Standalone Operations:

The Company ended the year FY 2017-18 with income from operations of Rs.5,868.7 million as compared to Rs.5,450.4 million for the previous financial year, reflecting an increase of 7.7%. Our EBITDA before exceptional items for FY 2017-18 was Rs.887.3 million with EBITDA margin of 15.1%.

3. Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated February 16, 2015, notified the Indian Accounting Standards (âInd ASâ) applicable to certain class of companies. Ind AS has replaced the existing GAAP prescribed under Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For HCG Group, Ind AS is applicable from April 01, 2016.

4. Business and Strategy:

4.1 Business:

The Company is a provider of speciality healthcare in India focused on cancer and fertility. Under the âHCGâ brand, we operate the largest cancer care network in India in terms of the total number of private cancer treatment centres licensed by the AERB. Each of our comprehensive cancer centres offers, at a single location, comprehensive cancer diagnosis and treatment services (including radiation, medical oncology and surgical treatments).

Given the large number of patient cases treated across our HCG network, we believe that we are able to efficiently utilise our equipment, technologies and human resources, thereby deriving economies of scale. Furthermore, through the adoption of a centralised drug and consumables formulary, we are able to lower the overall cost of drugs and consumables. We believe that our business model is scalable and when combined with efficient utilisation of resources, it enables us to operate within a competitive cost structure.

We also provide fertility treatment under our âMilannâ brand. Our Milann fertility centres provide comprehensive reproductive medicine services, including assisted reproduction, gynaecological endoscopy and fertility preservation; and follow a multidisciplinary and technology-focused approach to diagnosis and treatment. Our Milann network also operates on a model similar to our HCG network, wherein the various Milann fertility centres aim to provide medical services following established protocols with a focus on quality medical care across diagnosis and treatment.

4.2 New Cancer Care Centres:

4.2.1 Cancer Care Kenya, Nairobi: Despite the growing incidence of cancer, there is a shortage of cancer centres in many countries in Africa. We believe that this growing demand presents us with an opportunity to establish a network of speciality cancer centres in Africa. The Company through its subsidiary HCG Kenya, has acquired majority stake in Cancer Care Kenya (CCK) a leading cancer care centre in Nairobi, Kenya. CDC, the development finance institution of UK Government, which has partnered with the Company for Africa investments, has partnered through HCG Kenya an off-shore subsidiary for the acquisition. MP Shah Hospital, a leading tertiary care hospital in Kenya, has also participated in the transaction. HCG Kenya has received necessary approvals from Competition Authority of Kenya (CAK) in May 2017, for the acquisition. CCK, which started operations in 2010, is the first private comprehensive cancer centre in Kenya. CCK treats over a thousand patients annually including over two hundred patients from other African nations. CCKâs team includes internationally trained radiation, medical and surgical oncologists, physicists, radiation technicians and oncology nurses. CCK is the first private cancer care centre in Kenya. The Centre was launched in July 2017 in association with Cancer Care Kenya and MP Shah Hospital.

4.2.2 HCG APEX Cancer Centre, Borivali: The Company in order to significantly strengthen its presence in western India, has launched the first dedicated comprehensive cancer hospital in Mumbai, in May 2017, in collaboration with Apex Criticare LLP, founded with the aim of providing consistently high quality and result oriented cancer treatment by adopting global innovations. HCG APEX Cancer Centre is a state-of-the-art comprising of 69 beds along with oncology facilities. The hospital provides quality cancer care through surgical oncology, radiation oncology and medical oncology, all under one roof with a complete range of diagnostics. The cancer centre introduced the 1st Elekta Versa HD Radiation Machine in the state of Maharashtra, which is equipped with the Agilityâ¢ for high-speed, high precision beam shaping to support exceptionally accurate tumor targeting and improved healthy tissue preservation. HCG APEX Cancer Centre, Mumbai, has a clinical team comprising of highly qualified, trained and experienced surgical oncologists, radiation oncologists, medical oncologists, radiologists and nuclear medicine physicians, who are available round-the-clock for extensive patient service. All the facilities at the HCG APEX Cancer Centre are designed and executed as per the NABH Guidelines 2016. With the latest technology and expertise to treat cancer, HCG Apex Cancer Centre is emerging as one of the Best Cancer Hospital in Mumbai, India.

4.2.3 HCG NCHRI Cancer Centre, Nagpur: There has been a lack of dedicated advanced cancer care facilities in central India. With the inauguration of HCG NCHRI Cancer Centre in June 2017, we have now created access to the most advanced dedicated cancer centre in the region. HCG NCHRI Cancer Centre is a 115 bed dedicated comprehensive cancer hospital established in collaboration with the Nagpur Cancer Hospital and Research Institute Private Limited (âNCHRIâ). HCG NCHRI Cancer Centre, Nagpur, is the first private, comprehensive cancer care hospital in central India with all oncology facilities under one roof. The hospital provides quality cancer care through surgical oncology, radiation oncology and medical oncology with a full range of diagnostics. The Centre introduced TrueBeam STX for the first time in central India. This revolutionizes the cancer care industry by providing expertise and hope to hundreds of patients. The hospital treats all types of cancer with latest advancement in radiotherapy system like image-guided radiotherapy and radio-surgery which is designed to treat tumors with speed and precision and has a clinical team comprising of highly qualified, trained and experienced surgical oncologists, radiation oncologists, medical oncologists, radiologists and nuclear medicine physicians, who are available round-the-clock for extensive patient service. All the facilities at the HCG NCHRI Cancer Centre are designed and executed as per the NABH guidelines, 2016, and are a perfect amalgamation of the latest technology available in the oncology space, with highly qualified clinicians.

4.2.4 HCG Manavata Cancer Centre, Nashik: The Company had established the first comprehensive cancer centre in Nashik in 2008. The centre has 65 beds offering advanced diagnostics, radiation, medical and surgical oncology. Last year, HCG has expanded its operations in Nashik and has upgraded the centre in a new building and has additional 90 beds featuring advanced radiation therapy, multidisciplinary team of oncologists including sub specialists, bone-marrow transplant unit. The new centre has commenced its operations in May 2018. Also, the centre which was operating under HCG, has been moved into a new legal entity, named HCG Manavata Oncology LLP, which is owned by HCG and Dr. Rajnish Nagarkar in the ratio of 51:49 respectively.

4.3 New Milann Centres:

We believe that there is significant potential for growth in the fertility segment of the Indian healthcare industry. Further, the fragmentation of the market presents us with an opportunity to leverage the expertise of building our HCG brand into a nationally recognised speciality healthcare brand and to build and establish our Milann brand across India. Milann, during the year, has launched IVF Centres at Mumbai, Ahmedabad and two additional centres at Bengaluru - Whitefield and Banaswadi. BACC, the subsidiary of HCG operates eight Milann fertility centers across Bengaluru, Delhi, Chandigarh, Mumbai and Ahmedabad as on March 31, 2018. Milann is the first to receive ICMR approval for Uterus Transplant and has been Ranked No. 1 in India and first in the South India region continuously for 3 years in the fertility segment in the Times Health All India Critical Care Hospital Ranking Survey.

4.4 Acquisition, Investment, Disinvestment, Mergers and Amalgamations:

4.4.1 Acquisition of City Cancer Centre, Vijayawada: The Company has been operating a cancer care centre in Vijayawada and Ongole and a PET CT centre in Vijayawada (âHCG Vijayawadaâ). In order to consolidate the existing business of HCG Vijayawada and that of City Cancer Centre under the Company, and for improving the performance, efficiency, brand visibility and leadership in Andhra Pradesh, the Company vide business transfer agreement entered into with Dr. M. Gopichand, one of the promoters of the Company, in February 2018, has acquired the business of City Cancer Centre, located at Vijayawada 520002, a sole proprietary concern, owned by Dr. M. Gopichand. He is a renowned Surgical Oncologist in Vijayawada, and has entered into a consultancy agreement with the Company to provide medical consultancy services on an exclusive basis. As per the business transfer agreement with Dr. Gopichand, the Company has to pay a consideration of Rs.52 Crores, payable partly by way of issuance of shares of the Company, and by way of cash consideration, in tranches, and certain cash tranche payments are linked to the performance of the combined business. The Company has issued and allotted shares in April 2018 to Dr. Gopichand, in fulfilment of the payment of consideration payable by way of shares.

4.4.2 Suchirayu HealthCare Solutions Private Limited, Hubli: The Company, with an aim to make healthcare more accessible and affordable to the people of Hubli and North Karnataka, has entered into an operations and management arrangement with Suchirayu in August 2017. The Company has also acquired equity shares of Suchirayu to an extent of 17.72%. Suchirayu owns and operates an advanced multispecialty hospital in Hubli, having a capacity of 225 beds with most advanced technology in cathlab, CT, MRI and has best in class physicians.

4.4.3 Disinvestment of shares in HCG Regency Oncology Healthcare Private Limited: The Company has entered into a Share Purchase Agreement (âSPAâ) with Regency Hospital Limited (âRHLâ) and HCG Regency Oncology Healthcare Private Limited (âHCG Regencyâ) on March 28, 2018, relating to the sale/ transfer of shareholding of the Company in HCG Regency to RHL. The Company pursuant to the SPA has transferred its entire shareholding in HCG Regency, representing 51% of the share capital of HCG Regency to RHL. In view of the sale/transfer of entire shareholding of the Company in HCG Regency to RHL, the Company has ceased to be a shareholder of HCG Regency, effective from the close of business hours of March 28, 2018; and accordingly, HCG Regency has ceased to be a subsidiary of the Company effective from March 29, 2018. This was a strategic decision driven by lower than estimated mix of cash patients, other priorities and business dynamics.

4.4.4 iCrest, Bengaluru: The developments in healthcare of late have established value of regenerative medicine, offering new found hope to patients. There is synergy with the Company in using adult stem cells in treating several conditions including cancer. The Company in April 2018 has acquired equity shares of International Stemcell Services Limited (âISSLâ or âiCrestâ) to an extent of 12.00% (Twelve Percent) from its existing shareholders. ISSL is a knowledge-centric Company in the space of stem cells and regenerative medicine. The research activities with respect to stem cells and regenerative medicine carried out by ISSL would support the Company in the development of targeted therapies for cancer treatment

4.4.5 Merger of HCG Pinnacle Oncology Private Limited, subsidiary Company with the Company: During the year, HCG Pinnacle Oncology Private Limited the wholly owned subsidiary of the Company (Transferor Company), has been merged with the Company (Transferee Company) in accordance with the terms of a Scheme of Amalgamation (the Scheme) as approved by the Regional Director, Ministry of Corporate Affairs, Hyderabad with an appointed date of April 01, 2016. The Scheme was approved by the Regional Director, MCA, Hyderabad on January 30, 2018. The consolidation of operations of HCG Pinnacle and the Company has led to a more efficient utilisation of capital and superior deployment of brand promotion, sales and distribution strategies and created a consolidated and diversified base for future growth of oncology segment.

4.4.6 Amalgamation of DKR with BACC: During the year, DKR HealthCare Private Limited (Transferor Company), the wholly owned subsidiary of BACC HealthCare Private Limited (Transferee Company) has been merged with the Transferee Company in accordance with the terms of a Scheme of Amalgamation (the Scheme) as approved by the Regional Director, Ministry of Corporate affairs, Hyderabad with an appointed date of 01st April 2017.The scheme was approved by Regional Director, MCA, Hyderabad on January 29, 2018. This amalgamation has led to administrative and operational rationalization and has promoted organisational efficiencies.

4.4.7 Business combination of Triesta Sciences with Strand Life Sciences: The Company has entered into a business transfer agreement, with Strand Life Sciences in January 2018, providing for a business combination of its Triesta Sciences business unit (âTriesta Sciencesâ), with Strand Life Sciences Private Limited, a Company incorporated under the Companies Act, 1956 and having its registered office at 5th Floor, Kirloskar Business Park, Bellary Road, Hebbal, Bengaluru 560024 (âStrand Life Sciencesâ). Pursuant to the business transfer agreement, the Company has transferred its Triesta unit on slump sale basis for a consideration aggregating to 38.2 % stake in Strand Life Sciences. Strand Life Sciences is renowned in the field of bioinformatics and genomics research and is engaged in the business of developing, implementing and deploying technology for data, image and text analysis, and for diagnostic testing in the fields of genomics, research, pharmaceutical research and development, biotechnology and healthcare. Triesta Sciences has strong capabilities in molecular diagnostics and clinical research. The business combination of Triesta Business and Strand Life Sciences creates an entity which will have a leadership position in specialized diagnostics and genomics research.

4.5 Strategy:

a) Expand the reach of our cancer care network in India:

We plan to expand its network in India by establishing new cancer centres across India and by expanding the capacity and service offering of the existing HCG cancer centres. We carry out a competitive assessment of the markets in which HCG plans to expand the network based on a number of factors, including the estimated incidence of cancer in the primary and secondary catchment population, the number of comprehensive cancer centres, if any, in the catchment; the average distance patients have to travel to avail of such comprehensive cancer care; affordability of healthcare generally and cancer care in particular; and the available third party payer options, whether corporate, government or private insurance. HCG will continue to expand its network through green field projects, partnership arrangements and acquisitions; and that the past experiences will aid the Management in identifying potential opportunities in the future and assist HCG in integrating new cancer centres into the existing HCG network. We believe that our planned network will cater to the increasing unmet demand for cancer care in India.

b) Strengthen our HCG brand to reach more cancer patients

We believe that our HCG brand distinguishes us from our competitors. As we establish new comprehensive cancer centres across India, we plan to invest in building our brand, enhancing our market presence, brand image and visibility. We intend to strengthen our patient support groups comprising cancer survivors to further spread awareness of cancer screening and to educate patients regarding cancer treatment options and their relative outcomes and benefits. Through these initiatives, we seek to further strengthen our brand and our commitment to the community, cancer patients and their families.

c) Expand our cancer care network overseas

We believe that despite the growing incidence of cancer, there is a shortage of cancer centres in many countries in Africa. As a result, patients suffering from cancer often travel outside the region at a significant cost for availing quality cancer care, including to our comprehensive cancer centres in India. In the past, we have experienced an increase in the number of patients travelling from Africa and other regions to our centre of excellence in Bengaluru, as well as to our other comprehensive cancer centres in India for cancer treatment. We believe that this growing demand presents us with an opportunity to establish a network of speciality cancer centres in Africa. In addition, we periodically and selectively evaluate partnering opportunities in countries in the Middle East and South and Southeast Asia.

d) Upgrade and strengthen our information technology infrastructure

We are in the process of significantly upgrading our information technology infrastructure in order to enhance the quality of care delivered to patients and to further enhance our clinical best practices and research capabilities. Our planned information technology infrastructure will be based on a private cloud-computing system and will encompass a centralised EMR system seamlessly integrated with various other centralised systems including HIS and ERP system. We believe that the implementation of these information systems will maximise efficiencies through the greater integration of our network and help us fine tune protocols through knowledge sharing and collaboration. Further, we believe that these initiatives will enhance our ability to conduct longitudinal research studies (which are longterm observational research studies), and associate clinical outcomes with mutation and other genomic findings in cancer patient tissues maintained at our biorepository. We believe that this will position us as a partner of choice for cancer researchers and academia.

e) Expand our Milann network of fertility centres across India and strengthen Milann brand

We believe that in expanding our Milann network, we are well-positioned to leverage HCGâs successful track record of growing through partnerships with specialist physicians and hospitals, as well as our relationship base within the medical community.

We intend to invest in building our Milann brand through targeted media campaigns focusing on building patient awareness of fertility treatment primarily through patient testimonials and socially relevant messages. We also intend to undertake community outreach programmes, strengthen our patient support groups and undertake other awareness building activities among corporate entities. In addition, we intend to undertake various direct consumer marketing activities, including advertising in print, television, outdoor and digital media.

5. Management Discussion and Analysis Report

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), the Management Discussion and Analysis Report on the Companyâs financial and operational performance, industry trends, business outlook and Initiatives and other material changes with respect to the Company and its subsidiaries, wherever applicable, are presented in separate section which forms part of the Annual Report.

6. Transfer to reserves

There are no appropriations to/from the general reserves of the Company during the year under review.

7. Dividend

The Company continues to look at growth prospects through new investment opportunities. Considering that consolidation is taking place in the Healthcare Industry in India, it presents us with more challenges in terms of growth and it is imperative that the Company looks at available options for organic as well as in-organic growth. Achieving a consistent sustainable growth over the next few years and consolidating Companyâs position competitively would be a key objective.

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 do not recommended any dividend for the financial year under review.

8. Transfer of unpaid and unclaimed amount to IEPF

9. Consolidated financial statements

In accordance with the Companies (Indian Accounting Standards), Rules, 2015, the Company has started following the Indian Accounting Standards (Ind AS) for preparation of its financial statements from April 1, 2016.

10. Subsidiaries and Associates

We, along with our subsidiaries and Associates, provide speciality healthcare focused on cancer and fertility. As on March 31, 2018, the Subsidiaries and Associate Companies of the Company are as under:

Sl. No.		Name of the entity	Country of Incorporation	% of ownership held by the Company as at March 31, 2018
1		Name of the entity	India	74.00%
2		Malnad Hospital & Institute of Oncology Private Limited	India	70.25%
3		HealthCare Global Senthil Multi Specialty Hospitals Private Limited	India	100.00%
4		Niruja Product Development and Healthcare Research Private Limited (name changed with effect from November 10, 2016 from MIMS HCG Oncology Private Limited)	India	100.00%
5		BACC Health Care Private Limited	India	50.10%
6	HealthCare Diwan Chand Imaging LLP		India		75.00%
7	APEX HCG Oncology Hospitals LLP		India		50.10%
8	HCG NCHRI Oncology LLP		India		76.00%
9	HCG Oncology LLP		India		74.00%
10	Strand-Triesta Cancer Genomics LLP		India		30.00%
11	HCG EKO Oncology LLP		India		50.50%
12	HCG Manavata Oncology LLP		India		51.00%
13	HCG (Mauritius) Pvt. Ltd.		Mauritius		100.00%
14	Healthcare Global (Africa) Pvt. Ltd.		Mauritius		76.73%
15	HealthCare Global (Uganda) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)		Uganda		76.73%
16	HealthCare Global (Kenya) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)		Kenya		76.73%
17	HealthCare Global (Tanzania) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)		Tanzania		76.73%
18	HCG SUN Hospitals LLP		India		74.00%
19	Cancer Care Kenya Limited (Subsidiary of HealthCare Global (Kenya) Private Limited)		Kenya		59.47%
20	Strand Life Sciences Private Limited		India		38.20%

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013 read with Regulation 33 of the Listing Regulations, and applicable accounting standards, the consolidated financial statements of the Company, prepared in accordance with the relevant accounting standards specified under Section 133 of the Companies Act, 2013 read with the rules made there under, forms part of this Annual Report.

Further, pursuant to the provisions of Section 136 (1) of the Companies Act, 2013:

a) The Annual Report of the Company, containing therein its standalone and consolidated financial statements, is placed on the website of the Company, being www.hcgel.com.

b) The audited financial statements of subsidiary companies are posted on the website of the Company, being www.hcgel.com.

None of the above Companies is a Material Subsidiary within the meaning of Material Subsidiary as defined under the Listing Regulations.

Pursuant to Section 129 of the Companies Act, 2013, a statement containing the salient features of the financial statements of the subsidiary companies in Form AOC-1 is annexed herewith as Annexure 5 and forms part of the Report.

10.1 Subsidiaries incorporated during the Financial Year

HCG SUN Hospitals LLP: HCG SUN Hospitals LLP was incorporated on September 22, 2017, under the Limited Liability Partnership Act, 2008. The Partners of the LLP are HCG and SHIV-SUN Medical Services LLP, in the capital contribution ratio of 74:26, respectively. HCG and SHIV-SUN have agreed to join hands to set up a multispecialty hospital with high end infrastructure in Rajkot, under the name âHCG Hospitals.

11. Public deposits

Your Company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

12. Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations, disclosure on particulars relating to Loans/advances given, guarantees provided and investments made are provided as part of the financial statements.

13. Related party transactions

In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on the Companyâs website at https://hcgel.com/policies-and-guidelines/. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions on yearly basis for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at armâs length.

All Related Party Transactions entered during the year were in ordinary course of the business and at armâs length basis. No Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements, were entered into by your Company during the year.

A statement giving details of all related party transactions, entered pursuant to the omnibus approval so granted, is placed before the Audit Committee for their review, on a quarterly basis. The policy on Related Party Transactions has been hosted on the Companyâs website https://hcgel.com/policies-and-guidelines/ in terms of the Listing Regulations relating to Corporate Governance.

Disclosures as required under Section 134(3) (h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in Form AOC 2 as specified under Companies Act, 2013, which is annexed herewith as Annexure 6 and forms part of the report.

14. Initial Public Offer

During the year 2015-16, the Company had completed its Initial Public Offering of 29,800,000 equity shares of Rs.10 each, comprising of Fresh Issue of 11,600,000 equity shares and Offer for Sale of 18,200,000 equity shares at a premium of Rs.208 per equity share. The total issue size was Rs.6496.4 million. The shares got listed on the National Stock Exchange of India Limited and BSE Limited on March 30, 2016.

The proceeds of the initial public offer are proposed to be utilized for the following purposes:

1. Purchase of medical equipment

2. Investment in IT software, services and hardware

3. Pre-payment of debt; and

4. General Corporate Purposes

During the year under review, the Company has not deviated in utilizing the proceeds of issue.

15. Share capital

a) Authorized Share Capital: HCG Pinnacle Oncology Private Limited, one of the wholly owned subsidiaries of the Company has been merged with the Company, vide order dated January 30, 2018 of the Regional Director, South East Region, Hyderabad, Ministry of Corporate Affairs. As a result of the said merger, the Authorized Share Capital of HCG Pinnacle Oncology Private Limited amounting to Rs.50.000.000 has been added to the Authorized Share Capital of the Company. As on the date of this report, the authorized share capital of the Company is Rs.1,320,000,000 consisting of 132,000,000 equity shares of Rs.10 each. Prior to the order approving the said merger, the authorized capital was Rs. 1.270.000.000.

b) Issued, Subscribed and Paid-up Share Capital: The Issued, Subscribed and Paid-up Share Capital of the Company has been increased from Rs.857,129,860 consisting of 85,712,986 equity shares of Rs.10 each to Rs.869,044,730 consisting of 86,904,473 equity shares of Rs.10 each during the year.

The increase in the Issued, Subscribed and Paid-up Share Capital was on account of allotment of shares as under:

Name of allottee	No. of shares allotted	Issue price (Rs.)	Date of allotment
Indgrowth Capital Fund I	1,166,667	300	28.12.2017
Employees (On exercise of ESOP)	24,820	10	08.02.2008

16. Number of meetings of the Board

The Board met five times during the financial year 2017-18 viz., on, May 24, 2017, August 11, 2017, November 7, 2017, November 22, 2017 and February 8, 2018.

Detailed information regarding the meetings of the Board and meetings of the Committees of the Board is included in the report on Corporate Governance which forms a part of Directorsâ Report.

17. Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director, in accordance with Section 149(7) of the Companies Act, 2013, that he/she met the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and the Regulation 16(1)(B) of the Listing Regulations, The Company has received and taken on record, the necessary declaration from each of the independent directors under Section 149 of the Companies Act, 2013 that they meet with the criteria of their independence.

18. Extract of Annual Return

The extract of the Annual Return of your Company as on March 31, 2018 as provided under sub-section (3) of Section 92 in the Form MGT 9 is annexed herewith as Annexure 1.

19. Directorâs Responsibility Statement

Pursuant to Section 134 (3) (C) and 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:

a) in the preparation of the annual accounts, 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 at the end of the financial year and of the profit of the Company for that 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.

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

20. Appointment of Directors

During the year under review, there has been no change in the Directors of the Company. Dr. Amit Varma and Dr. Ramesh S. Bilimagga who were appointed as Additional Directors with effect from November 10, 2016, liable to retire by rotation, have been reappointed by the shareholders at the Annual General Meeting held on August 10, 2017.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company, on May 22, 2018, subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting, has appointed Dr. B.S. Ramesh as a Whole Time Director, designated as âExecutive Directorâ.

The Notice of twentieth Annual General Meeting of the Company contains the above proposal for the approval of the Members.

21. Reappointment of Directors

As per the provisions of the Companies Act, 2013, Dr. Amit Varma and Dr. B. S. Ramesh, Directors of the Company, retire at the forthcoming Annual General Meeting and have sought for reappointment.

22. Key Managerial personnel

The Key Managerial Personnel of the Company are:

a) Dr. B.S.Ajaikumar - Chairman & CEO

b) Mr. Yogesh Patel - Chief Financial Officer

c) Ms. Sunu Manuel - Company Secretary

During the year, there were no changes in Key Managerial Personnel of the Company.

23. Board of Directors and Committees of the Board and their constitution

Your Companyâs Board of Directors comprises of Executive Directors, Non-Executive Directors and Independent Directors. The Composition of the Board along with relevant information pertaining to Directors are detailed in the Corporate Governance Report which forms a part of this Report.

The Board has formed the following five Committees:

1. Audit and Risk Management Committee

2. Nomination and Remuneration Committee

3. Stakeholdersâ Relationship Committee

4. Corporate Social Responsibility Committee and

5. Strategy Committee.

(a) Audit and Risk Management Committee

Pursuant to the requirements of Section 177 of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers), Rules 2014, the Company has an Audit and Risk Management Committee and the composition of the committee is as under:

1. Mr. Suresh Chandra Senapaty, Chairman

2. Dr. Sudhakar Rao

3. Mr. Shanker Annaswamy

The Audit committee was reconstituted and renamed as the âAudit and Risk Management Committeeâ by a meeting of the Board of Directors held on May 29, 2015.

(b) Nomination and Remuneration Committee

Pusuant to the requirements of Section 178 of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers), Rules 2014, the Board of Directors have reconstituted the Nomination and Remuneration Committee.

The members of the Nomination and Remuneration Committee are:

1. Mr. Shanker Annaswamy, Chairman

2. Dr. Sampath Thattai Ramesh

3. Mr. Gangadhara Ganapati

The Stakeholdersâ Relationship Committee was constituted by our Board of Directors at their meeting held on May 29, 2015. The scope and function of the Stakeholdersâ Relationship Committee is in accordance with Section 178 of the Companies Act, 2013.

The members of the Stakeholdersâ Relationship Committee are:

1. Mr. Gangadhara Ganapati, Chairman

2. Dr. B.S Ajaikumar

(d) Corporate Social Responsibility Committee

The members of the Corporate Social Responsibility Committee are:

1. Mr. Sudhakar Rao, Chairman

2. Dr. Sampath Thattai Ramesh

3. Ms. Bhushani Kumar

4. Dr. B.S Ajaikumar

(e) Strategy Committee

The Committee was constituted by our Board of Directors at their Meeting held on May 26, 2016 with the scope of reviewing strategic initiatives; and for having an ooversight of the strategic direction of the Company.

The members of the Committee are:

1. Dr. B. S. Ajaikumar, Chairman

2. Mr. Gangadhara Ganapati

3. Mr. Suresh Senapaty

4. Mr. Shanker Annaswamy

5. Dr. Amit Varma

24. Board Evaluation

In terms of the requirement of the Companies Act, 201 3 and the Listing Regulations, an annual performance evaluation of the Board was undertaken. The Board evaluation framework has been designed in compliance with the requirements under the Companies Act, 2013 and the Listing Regulations, and in consonance with Guidance Note on Board Evaluation issued by SEBI in January 2017. The Board evaluation was conducted through questionnaire having qualitative parameters and feedback based on rating.

Evaluation of the Board was based on criteria such as composition and role of the Board, Board communication and relationships, functioning of Board Committees, review of performance and compensation to Executive Directors, succession planning, strategic planning, etc

Evaluation of Directors was based on criteria such as participation and contribution in Board and Committee meetings, representation of shareholder interest and enhancing shareholder value, experience and expertise to provide feedback and guidance to top management on business strategy, governance and risk, understanding of the organizationâs strategy, risk and environment, etc. The process also covered separate evaluation of Chairperson of the Board, Executive Directors, Non- Executive Directors and Independent Directors

Evaluation of Committees was based on criteria such as adequate independence of each Committee, frequency of meetings and time allocated for discussions at meetings, functioning of Board Committees and effectiveness of its advice/recommendation to the Board, etc.

The Board had, during the year, opportunities to interact and make an assessment of its functioning as a collective body. In addition, there were opportunities for Committees to interact, for Independent Directors to interact amongst themselves and for each Independent Director to interact with the Chairman. The Board found that, there was considerable value and richness in such discussions and deliberations.

The Board Evaluation discussion was focused around how to make the Board and its Committees more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was appraised of the business issues and the related opportunities and risks. The Board discussed various aspects of the functioning of the Board and its Committees such as structure, composition, meetings, functions and interaction with Management and what needs to be done to further improve the effectiveness of the Boardâs functioning.

Additionally, during the evaluation discussion, the Board also focused on the contribution being made by the Board as a whole, through its Committees and discussions on a one on one basis with the Chairman.

The process of Board Evaluation was led by the Chairman of the Nomination and Remuneration Committee. The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board that were functioning well with periodic reporting by the Committees to the Board on the work done and progress made during the period. The Board acknowledged the efforts and contributions made by the Chairperson, Executive and Non- Executive Directors and Independent Directors towards the Companyâs performance.

The Board also noted that the actions identified in the past evaluation had been acted upon. Subsequent to the evaluation done in the financial year 2017-18, given the changing external environment, some areas have been identified for the Board to engage itself with and these will be acted upon.

25. Risk Management

Pursuant to Regulation 21 of the Listing Regulations, your Company has developed and rolled out a comprehensive Enterprise Risk Management Policy. The policy aims at elimination or reduction of risk exposures through identification and analysis of various types of risks and facilitating timely action for taking risk mitigation measures. The Risk Management and Steering Committee (RMSC) reviews the Companyâs portfolio of risks and considers it against the Companyâs risk appetite and recommends changes to the Risk Management technique and / or associated frameworks, processes and practices of the Company. The enterprise risk management process of the Company is progressing satisfactorily, but the entire process is yet to reach a level of maturity. RMSC also advises and guides the Company for making the process more robust and to achieve prudent balance between risk and reward in both ongoing and new business activities. The Audit and Risk Management Committee quarterly reviews the risk management process.

For further details on the enterprise wide risk management framework, refer to Management and Discussion Analysis Report forming part of the Annual Report.

26. Corporate Social Responsibility

HCG has also been involved in a number of social initiatives to support the community and bring about a positive change in preventive healthcare, through education and awareness building activities. Free cancer detection and screening camps, Continuous Medical Education (CMEs) are now a regular feature in HCGâs community outreach program. We believe that organizational growth is impossible without the sharing and pooling of our knowledge and resources. Best practices are disseminated across our facilities through coordinated CMEs, Continuous Nursing Education (CNEs) and seminars. HCG organizes such continuous education programmes every year.

As per the provisions of Section 135 of the Companies Act, 2013, the Company has well defined policy on CSR which covers the activities as prescribed under Schedule VII of the Companies Act 2013.

Annual Report on Corporate Social Responsibility is annexed herewith as Annexure 7.

27. Internal Audit

Your Company has continued its engagement with M/s. Ernst & Young LLP, Chartered Accountants, to conduct internal audit across the organization. We have also strengthened the inhouse internal audit team to supplement and support the efforts of M/s. Ernst & Young LLP.

28. Internal Control system and their adequacy

The Management has laid down internal financial controls to be followed by the Company. We have adopted policies and procedures for ensuring the orderly and efficient conduct of the business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

As part of the Corporate Governance Report, CEO/ CFO certification is provided, for assurance on the existence of effective internal control systems and procedures in the Company.

The internal control framework is supplemented with an internal audit program that provides an independent view of the efficacy and effectiveness of the process and control environment and supports a continuous improvement program. The internal audit program is managed by an Internal Audit function and the Audit and Risk Management Committee of the Board oversees the Internal Audit function.

The scope and authority of the Internal Audit Function is derived from the Audit Charter approved by the Audit and Risk Management Committee of the Board. The Internal Audit function develops an internal audit plan to assess control design and operating effectiveness, as per the risk assessment methodology. The Internal Audit function provides assurance to the Board and management that a system of internal control is designed and deployed to manage key business risks and is operating effectively.

29. Vigil Mechanism for Directors and employees

Section 177(9) of the Companies Act, 2013, mandates every listed Company or such class of companies as may be prescribed to establish a Vigil mechanism for its directors and employees which shall function as a channel for receiving and redressing their complaints. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.

Under this policy, we encourage our directors, employees and all other stakeholders to report their genuine concern of any conduct that results in violation of the ethical behaviour, or to report any act, if not conducted in a fair, transparent manner thereby compromising professionalism, honesty and integrity (on an anonymous basis, if stakeholders so desire).

Likewise, under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employeeâs reasonable belief that such conduct or practice have occurred or are occurring, reports that information or participates in the said investigation. No individual in the Company has been denied access to the Audit and Risk Management Committee or its Chairman.

This meets the requirement under Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations.

Mechanism followed under the process is appropriately communicated within the Company across all levels and has been displayed on the Companyâs intranet and website at https://hcgel.com/policies-and-guidelines/. The Audit and Risk Management Committee periodically reviews the functioning of this mechanism.

30. Companyâs Policy on Appointment and Remuneration of Directors

As on the date of report, the Board consists of 9 members, of which there are 5 Independent Directors, 3 Non-Independent and Non-Executive Directors and 2 Executive Directors.

An appropriate mix of Executive and Independent Directors ensures greater independence of Board. The Company has a well laid down policy on appointment and remuneration of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel.

The remuneration of Executive Director comprises of fixed remuneration and variable pay, based on performance and adheres to the applicable provisions of the Companies Act, 2013 read with relevant rules as detailed in Corporate Governance Report which forms a part of this report.

The remuneration of Independent Directors comprises of sitting fees which is paid for attending the meetings of the Board and the Committees of the Board in accordance with the provisions of Companies Act, 2013.

The Policy of the Company on the Directorâs appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of section 178 of the Companies Act, 2013, is available on our website https://hcgel. com/policies-and-guidelines/. We affirm that the remuneration paid to Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

31. Particulars of employees

The information required in terms of Section 197 (12) of the Companies Act, 2013, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 for the year ended March 31, 2017 is provided as Annexure 4 to this Report.

A statement containing, inter alia, names of employees employed throughout the financial year and in receipt of remuneration of Rs.12 million or more, employees employed for part of the year and in receipt of Rs.1 million or more per month, pursuant to Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is also provided in Annexure 4 to this report.

32. Significant and Material orders

During the period under report, there have been no material or significant orders passed by the Regulators/Courts which would have an impact on the going concern status and operations of the Company in future.

33. Statutory Auditors

Under Section 139 of the Indian Companies Act, 2013 and Rules made thereunder, it is mandatory to rotate the Statutory Auditors on completion of the maximum term permitted under the said section.

The tenure of M/s. Deloitte Haskins & Sells, as Statutory Auditors has come to an end at the last Annual General Meeting held on August 10, 2017; and accordingly the shareholders on the Annual General Meeting have approved the appointment of M/s. B S R & Co. LLP (Firm Registration No. 101248W/W-100022) as Statutory Auditors for a term of 5 years commencing from the conclusion of the Annual General Meeting of the Company held on August 10, 2017, till the conclusion of the Annual General Meeting to be held in the year 2022.

34. Auditorsâ Report

There are no qualifications, reservations or adverse remarks made by M/s B S R & Co. LLP, Statutory Auditors, in their report for the financial year ended March 31, 2018; and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Audit and Risk Management Committee during the year under review.

35. Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report:

There are no other material changes affecting the financial position of the Company between the end of the financial year to which this financial statements relate and the date of the report.

There has been no change in the nature of business of the Company during the last financial year.

36. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. V Sreedharan, Partner, M/s V Sreedharan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended March, 31, 2018. The said Report of the Secretarial Audit in Form MR 3 is annexed herewith as Annexure 2 and forms part of the report.

There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor of the Company, in their Secretarial Audit Report.

37. Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost records maintained by the Company in respect of its hospital activity is required to be audited. Your Directors had, on the recommendation of the Audit and Risk Management Committee, appointed M/s. M. Thimmarayaswamy & Co., Cost Accountants to audit the cost records of the Company for the Financial Year 2017-18.

Cost Audit Report for the financial year ended 31st March 2017 has been duly filed with the Registrar of Companies.

38. Particulars regarding Conservation of energy, Technology absorption and Foreign exchange earnings and outgo as per Section 134(3)(m) of the Companies Act, 2013.

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is detailed in Annexure 8.

39. Prevention of Sexual Harassment Policy

During the year 2017-2018, three complaints were received at a group level and the same were investigated, out of which two resolved as per the provisions of the Act. One complaint was pending as on the date of this report.

In order to build awareness in this area, the Company has been conducting programmes in the organization on a continuous basis.

40. Green initiative

As a green initiative in corporate governance, Ministry of Corporate affairs have permitted companies to send electronic copies of Annual Report, notices, etc., to the e-mail IDs of shareholders. We are accordingly arranging to send soft copies of these documents to the e-mail IDs of shareholders available with us.

In case any of the shareholders would like to receive physical copies of these documents, the same shall be forwarded on request to the Company by post or an e-mail.

41. Employee Stock Option Schemes

As required under Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014, the applicable disclosures as on March 31, 2018 are annexed to this Report as Annexure 3.

During the financial year under review, pursuant to regulation 12(1) of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014, the Company has obtained the approval of the members at the Annual General Meeting held on September 29, 2016, for ratifying Employee Stock Option Scheme of the Company (HCG ESOS 2014), the pre-IPO plan. HCG ESOS 2014 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014.

The Nomination and Remuneration Committee of the board evaluates the performance and other criteria of employees and approves the grant of options based on the recommendation of the Management. These options vest with employees over a specified period subject to fulfilment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Companyâs shares at a price determined on the date of grant of options.

The stock compensation cost is computed under fair value method and accounted in line with graded vesting of options over the total vesting period of four years. For the year ended March 31, 2018, the Company has recorded stock compensation expense of Rs.27,093,288 (2017: Rs.9,450,182).

For further details on the Scheme refer Annexure 3 of the Directorâs report.

42. Corporate Governance

The Company is committed to observe good corporate governance practices. The report on Corporate Governance for the financial year ended March 31, 2018, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms a part of this Annual Report.

Certificate from Mr. V Sreedharan, Partner, M/s V Sreedharan & Associates, a firm of Company Secretaries in Practice confirming the compliance with the conditions of Corporate Governance as stipulated by Regulation 34 (3) of Listing Regulations is attached to this report.

43. Declaration on Code of Conduct

The Company has adopted the Code of Conduct for all its Senior Management Personnel and Directors and the same is affirmed by all the Board Members and Senior Management Personnel as required under Regulation 34 read with Part D of Schedule V of the Listing Regulations. A declaration signed by Dr. B.S. Ajaikumar, Chairman & CEO of the Company affirming the compliance with the Code of Conduct of the Company for the financial year 2017-18 has been annexed as part of this Report.

44. Acknowledgements and Appreciations

For and on behalf of the Board of Directors

Date: May 22, 2018 Dr. B. S. Ajaikumar

Place: Bengaluru Chairman & CEO

Mar 31, 2017

The Directors have great pleasure in presenting the Nineteenth Annual Report of your Company together with the Audited Standalone and Consolidated Financial Statements and the Auditorsâ Report thereon for the financial year ended March 31, 2017. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. Financial Results:

The highlights of consolidated financial results of your Company and its subsidiaries; and your Company as a standalone entity are as follows:

Consolidated	2016-17 (INR in millions)	2015-16 (INR in millions)
Income from operations	7,001.1	5,841.7
Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items	5,951.2	4,994.1
Profit before other income, Depreciation, Interest cost, tax and exceptional items	1,049.9	847.6
Other income	96.7	39.9
Depreciation, Finance Charges and exceptional items	798.2	884.8
Profit before tax	348.4	2.7
Profit after tax before share of profit of minority interest	230.4	22.4
Standalone
Income from operations	5,387.8	4,711.3
Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items	4,537.6	4,073.4
Profit before other income, Depreciation, Interest cost, tax and exceptional items	850.2	638.0
Other income	72.2	33.9
Depreciation, Finance Charges and exceptional items	571.2	758.2
Profit/(Loss) before tax	351.2	(86.4)
Profit/(Loss) after tax	235.2	(47.3)

2. Performance Overview

CONSOLIDATED OPERATIONS:

The consolidated income from operations for FY 2016 - 17 was INR 7,001.1 million as compared to INR 5,841.7 million in the previous fiscal year, reflecting a growth of 19.8%. EBITDA in FY 2016- 17 was INR 1,049.9 million as compared to INR 847.6 million in FY 2016-17, reflecting a year-on-year increase of 23.9%. EBITDA margin for the year was 15.0% as compared to 14.5% in FY 2015-16, reflecting an increase of 50 basis points. PAT (after minority interest) in the fiscal year was INR 221.7 million as compared to a loss after tax of INR 14.6 million in FY 2015-16.

The revenue growth was driven by 19.2% growth from HCG Centres (including the multi-specialty hospitals) while the Milann centres contributed growth of 27.8%. HCG Centres constituted 92% of the consolidated revenues for the Company and the remaining 8% of the consolidated revenue was contributed by Milann Centres.

STANDALONE OPERATIONS:

The Company ended the year FY 2016-17 with income from operations of INR 5,387.8 million as compared to INR 4,711.3 million, reflecting an increase of 14.4% compared to the previous fiscal year. Our EBITDA before exceptional items for FY 2016-17 was INR 850.2 million with EBITDA margin of 15.8%.

3. Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated February 16, 2015, notified the Indian Accounting Standards ("Ind AS") applicable to certain class of companies. Ind AS has replaced the existing GAAP prescribed under Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For HCG Group, Ind AS is applicable from April 01, 2016, with a transition date of April 01, 2015 and IGAAP as the previous GAAP.

The reconciliations and descriptions of the effect of the transition from IGAAP to Ind AS have been provided in Note 3 in the notes to accounts in the standalone and consolidated financial statements.

4. Business and Strategy:

4.1 BUSINESS:

The Company is a provider of specialty healthcare in India focused on cancer and fertility. Under the "HCG" brand, we operate the largest cancer care network in India in terms of the total number of private cancer treatment centres licensed by the AERB. Each of our comprehensive cancer centres offers, at a single location, comprehensive cancer diagnosis and treatment services (including radiation, medical oncology and surgical treatments). Our freestanding diagnostic centres and our day care chemotherapy centre offer diagnosis and medical oncology services, respectively.

In our HCG network, our specialist physicians adopt a technology-focused approach to diagnosis and treatment. For instance, we use advanced technologies, including molecular pathology and molecular imaging for accurate diagnosis and staging of cancer, which enable us to decide upon the appropriate course of treatment for each patient. We also utilize targeted nuclear medicine therapies as well as advanced radiation treatments to minimize side effects and improve the outcome of treatments. By ensuring that we adopt these diagnostic and treatment technologies throughout our HCG network, we are able to provide consistent quality of care to all patients.

Given the large number of patient cases treated across our HCG network, we believe that we are able to efficiently utilize our equipment, technologies and human resources, thereby deriving economies of scale. Furthermore, through the adoption of a centralized drug and consumables formulary, we are able to lower the overall cost of drugs and consumables. We believe that our business model is scalable and when combined with efficient utilization of resources, it enables us to operate within a competitive cost structure.

We also provide fertility treatment under our Milann brand. Our Milann fertility centres provide comprehensive reproductive medicine services, including assisted reproduction, gynaecological endoscopy and fertility preservation; and follow a multidisciplinary and technology-focused approach to diagnosis and treatment. Our Milann network also operates on a model similar to our HCG network, wherein the various Milann fertility centres aim to provide medical services following established protocols with a focus on quality medical care across diagnosis and treatment.

Under our Triesta brand, we provide clinical reference laboratory services in India with a specialization in oncology, including molecular diagnostic services and genomic testing. Our Triesta central reference laboratory is located in our centre of excellence in Bengaluru. Our Triesta central reference laboratory is accredited by NABL in India, as well as by CAP for quality assurance of laboratory tests performed. Additionally, Triesta offers research and development services to pharmaceutical and biotechnology companies in the areas of clinical trial management and biomarker discovery and validation. Triesta is led by a team of specialist oncopathologists, molecular biologists and clinical researchers. We believe that Triesta is well-positioned to leverage the wide variety of patient cases across our HCG network to develop its capabilities and business.

4.2 NEW CANCER CARE CENTRES:

a) HCG Pinnacle Cancer Centre: In April 2016, HCG launched its first cancer centre in Visakhapatnam, under its subsidiary company, HCG Pinnacle Oncology Private Limited. HCG Pinnacle Cancer Centre has a capacity of upto 88 beds and provide high quality and comprehensive cancer care services. With the commencement of operations of the centre at Visakhapatnam, the Company has expanded its presence in Andhra Pradesh to three centres along with Ongole and Vijayawada. HCG Pinnacle Cancer Centre is the only centre in the State of Andhra Pradesh with a True Beam installation and is the most advanced and comprehensive cancer care centre. The centre is also equipped with 16 slice PET CT machine Discovery IQ from GE which enables effective cancer diagnostics.

b) HCG Cancer Centre, Baroda: The Company in May 2016 has launched its new advanced comprehensive cancer centre in Baroda, under its subsidiary, HCG Oncology LLP The Centre has a bed capacity of 65 beds and is one of the most advanced in terms of technology in the HCG network. The centre is HCGâs second comprehensive cancer centre in the state of Gujarat with Ahmedabad. The new centre features several advanced technologies such as the TrueBeam Radiotherapy system, PET-CT for radiotherapy planning and diagnosis, TrueBeam minimally invasive surgery system as well as an integrated cloud hosted oncology IT system.

c) HCG Manavata Cancer Centre: HCG has expanded its operations in Nashik in March 2017. The Company had established the first comprehensive cancer centre in Nashik in 2008. The centre has 65 beds offering advanced diagnostics, radiation, medical and surgical oncology. The upgraded centre in a new building has additional 90 beds featuring advanced radiation therapy, multidisciplinary team of oncologists including sub specialists, bone-marrow transplant unit. The new centre is expected to commence operations later in 2017. Also, the centre which was operating under HCG, is moved into a new legal entity, named HCG Manavata Oncology LLP, which is owned by HCG and Dr. Rajnish Nagarkar in the ratio of 51:49 respectively.

d) Cancer Care Kenya, Nairobi: HCG through its subsidiary HCG Kenya has signed definitive agreements in March 2017 to acquire a majority stake in Cancer Care Kenya (CCK) a leading cancer care centre in Nairobi, Kenya, subject to review and approval by the Competition Authority of Kenya (CAK) and other requisite approvals. CDC, the development finance institution of UK Government, which has partnered with HCG for Africa investments, would partner with HCG through HCG Kenya an off-shore subsidiary for the acquisition. MP Shah Hospital, a leading tertiary care hospital in Kenya, will also participate in the transaction. HCG Kenya has received necessary approvals from CAK in May 2017, for the acquisition.

CCK, which started operations in 2010, is the first private comprehensive cancer centre in Kenya. CCK treats over a thousand patients annually including over two hundred patients from other African nations. CCKâs team includes internationally trained radiation, medical and surgical oncologists, physicists, radiation technicians and oncology nurses.

e) HCG Regency Cancer Centre, Kanpur: In May 2017, HCG launched its first cancer centre in Kanpur, the largest city in the state of Uttar Pradesh, under its subsidiary company, HCG Regency Oncology Healthcare Private Limited. HCG Regency Oncology Centre is equipped with 90 beds and features advanced radiation therapy, a multi-disciplinary team of oncologists including sub-specialists, as well as the first PET-CT and bone marrow transplant unit.

4.3 STRATEGY:

a) Expand the reach of our cancer care network in India:

We plan to expand its network in India by establishing new cancer centres across India and by expanding the capacity and service offering of the existing HCG cancer centres. We carry out a competitive assessment of the markets in which HCG plans to expand the network based on a number of factors, including the estimated incidence of cancer in the primary and secondary catchment population, the number of comprehensive cancer centres, if any, in the catchment; the average distance patients have to travel to avail of such comprehensive cancer care; affordability of healthcare generally and cancer care in particular; and the available third party payer options, whether corporate, government or private insurance. HCG will continue to expand its network through green field projects, partnership arrangements and acquisitions; and affirmed that the past experiences will aid the Management in identifying potential opportunities in the future and assist HCG in integrating new cancer centres into the existing HCG network.

b) Strengthen our HCG brand to reach more cancer patients

c) Expand our cancer care network overseas

We believe that despite the growing incidence of cancer, there is a shortage of cancer centres in many countries in Africa. As a result, patients suffering from cancer often travel outside the region at a significant cost for availing quality cancer care, including to our comprehensive cancer centres in India. In the past, we have experienced an increase in the number of patients travelling from Africa and other regions to our centre of excellence in Bengaluru, as well as to our other comprehensive cancer centres in India for cancer treatment. We believe that this growing demand presents us with an opportunity to establish a network of specialty cancer centres in Africa. In addition, we periodically and selectively evaluate partnering opportunities in countries in the Middle East and South and Southeast Asia.

d) Upgrade and strengthen our information technology infrastructure

We are in the process of significantly upgrading our information technology infrastructure in order to enhance the quality of care delivered to patients and to further enhance our clinical best practices and research capabilities. Our planned information technology infrastructure will be based on a private cloud-computing system and will encompass a centralized EMR system seamlessly integrated with various other centralized systems including HIS and ERP system. We believe that the implementation of these information systems will maximize efficiencies through the greater integration of our network and help us fine tune protocols through knowledge sharing and collaboration. Further, we believe that these initiatives will enhance our ability to conduct longitudinal research studies (which are long-term observational research studies), and associate clinical outcomes with mutation and other genomic findings in cancer patient tissues maintained at our biorepository. We believe that this will position us as a partner of choice for cancer researchers and academia.

e) Expand our Milann network of fertility centres across India and strengthen Milann brand

5. Management Discussion and Analysis Report

In terms of regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report on the Companyâs financial and operational performance, industry trends, business outlook and Initiatives and other material changes with respect to the Company and its subsidiaries, wherever applicable, are presented in separate section which forms part of the Annual Report.

6. Transfer to reserves

There are no appropriations to/from the General reserves of the Company during the year under review.

7. Dividend

As per Regulation 43A of the SEBI Listing Regulations, the Company has adopted Dividend Distribution Policy setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of Dividend to the Shareholders and/or retaining profits earned by the Company. The highlights of the Policy is enclosed as Annexure 7 to the Boardâs Report and is also available on the website of the Company (www.hcgel.com).

8. Transfer of unpaid and unclaimed amount to IEPF

9. Consolidated financial statements

In accordance with the Companies (Indian Accounting Standards), Rules, 2015 of the Companies Act, 2013, the Company has started following the Indian Accounting Standards (Ind AS) for preparation of its financial statements from April 1, 2016. The financial statements, both standalone and consolidated, for the financial year ended March 31, 2016 have also been restated accordingly.

10. Subsidiaries and Associates

We, along with our subsidiaries and Associates, provide specialty healthcare focused on cancer and fertility.

As on March 31, 2017, the Subsidiaries and Associate Companies of the Company are as under, of which none are material subsidiaries.

Sl. No.	Name of the entity	Country of Incorporation	% of ownership held by the Company as at March 31, 2017
A	HCG Medi-Surge Hospitals Private Limited	India	74.00%
B	Malnad Hospital & Institute of Oncology Private Limited	India	70.25%
C	HealthCare Global Senthil Multi Specialty Hospitals Private Limited	India	100.00%
D	Niruja Product Development And Healthcare Research Private Limited (name changed with effect from November 10, 2016 from MIMS HCG Oncology Private Limited)	India	100.00%
E	BACC Healthcare Private Limited	India	50.10%
F	HCG Regency Oncology Healthcare Private Limited	India	51.00%
G	HCG Pinnacle Oncology Private Limited	India	50.10%

Sl. No.	Name of the entity	Country of Incorporation	% of ownership held by the Company as at March 31, 2017
H	HealthCare Diwan Chand Imaging LLP	India	75.00%
I APEX HCG Oncology Hospitals LLP		India	50.10%
J	HCG NCHRI Oncology LLP	India	76.00%
K	HCG Oncology LLP	India	74.00%
L	Strand-Triesta Cancer Genomics LLP	India	30.00%
M	HCG EKO Oncology LLP	India	50.50%
N	HCG Manavata Oncology LLP (incorporated on August 10, 2016)	India	51.00%
O	DKR Healthcare Private Limited (formerly Parenthood Healthcare Private Limited) 100% subsidiary of BACC Healthcare Private Limited, which is subsidiary of the Company	India	50.10%
P	HCG (Mauritius) Pvt. Ltd.	Mauritius	100.00%
Q	Healthcare Global (Africa) Pvt. Ltd.	Mauritius	100.00%
R	HealthCare Global (Uganda) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Uganda	100.00%
S	HealthCare Global (Kenya) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Kenya	100.00%
T	HealthCare Global (Tanzania) Private Limited (Wholly Owned Subsidiary of Healthcare Global (Africa) Pvt. Ltd)	Tanzania	100.00%

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013 read with Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable accounting standards, the consolidated financial statements of the Company, prepared in accordance with the relevant accounting standards specified under Section 133 of the Companies Act, 2013 read with the rules made there under, forms part of this Annual Report.

Further, pursuant to the provisions of Section 136 (1) of the Companies Act, 2013:

a) The Annual Report of the Company, containing therein its standalone and consolidated financial statements, is placed on the website of the Company, being www.hcgel. com.

b) The audited financial statements of subsidiary companies are posted on the website of the Company, being www. hcgel.com.

A statement containing the salient features of the financial statements of the subsidiary companies in Form AOC-1 is annexed herewith as "Annexure 6" and forms part of the Report as per provisions of the Section 129(3) of the Companies Act 2013.

10.1 SUBSIDIARIES INCORPORATED DURING THE FINANCIAL YEAR

HCG Manavata Oncology LLP HCG Manavata Oncology LLP was incorporated on August 10, 2016, under The Limited Liability Partnership Act, 2008 as a limited liability partnership firm. The Partners of the LLP are HCG and Dr. Rajnish Nagarkar, in the capital contribution ratio of 51:49, respectively. HCG Manavata Oncology LLP is authorized to primarily engage in the business of setting up hospitals at Nashik, Maharashtra with high end linear accelerators, pharmacy and matters incidental and ancillary thereto.

10.2 CHANGES IN THE SHAREHOLDING IN THE SUBSIDIARIES DURING THE FINANCIAL YEAR

HCG NCHRI Oncology LLP: During the year under review, the percentage of holding of the Company in HCG NCHRI Oncology LLP subsidiary has increased from 51% to 76%.

10.3 DISINVESTMENTS MADE BY THE COMPANY DURING THE FINANCIAL YEAR

The Company has not made any disinvestments during the Financial Year.

11. Public deposits

12. Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), disclosure on particulars relating to Loans/advances given, guarantees provided and investments made are provided as part of the financial statements.

13. Related party transactions

In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on the Companyâs website at www.hcgel.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

14. Initial Public Offer

During the year 2015-16, the Company had completed its Initial Public Offering of 29,800,000 equity shares of INR 10 each, comprising of Fresh Issue of 11,600,000 equity shares and Offer for Sale of 18,200,000 equity shares at a premium of INR 208 per equity share. The total issue size was INR 6496.4 million. The shares got listed on the National Stock Exchange of India Limited and BSE Limited on March 30, 2016.

The proceeds of the initial public offer are proposed to be utilized for the following purposes:

1. Purchase of medical equipment

2. Investment in IT software, services and hardware

3. Pre-payment of debt; and

4. General Corporate Purposes

During the year under review, the Company has not deviated in utilizing the proceeds of issue.

15. Share capital

a) Authorized Share Capital: There is no change in the authorized share capital of the Company during the year. As on the date of this report, the authorized share capital of the Company is INR 1,270,000,000 consisting of 127,000,000 equity shares of INR 10 each.

b) The Issued, Subscribed and Paid-up Share Capital of the Company has increased from INR 850,759,860 consisting of 85,075,986 equity shares of INR 10 each to INR 857,129,860 consisting of 85,712,986 equity shares of INR 10 each during the year.

The increase in the Issued, Subscribed and Paid-up Share Capital was on account of allotment of shares to employees pursuant to ESOP 2014.

16. Number of meetings of the Board

The Board met four times during the financial year 2016-17 viz., on, May 26, 2016, August 12, 2016, November 10, 2016 and February 8, 2017.

Detailed information regarding the meetings of the Board and meetings of the Committees of the Board is included in the report on Corporate Governance which forms a part of Directorsâ Report.

17. Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director, in accordance with Section 149(7) of the Companies Act, 2013, that he/she met the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and the Regulation 16(1)(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.The Company has received and taken on record, the necessary declaration from each of the independent directors under Section 149 of the Companies Act, 2013 that they meet with the criteria of their independence.

18. Extract of Annual Return

The extract of the Annual Return of your Company as on March 31, 2017 as provided under sub-section (3) of Section 92 in the Form MGT 9 is annexed herewith as "Annexure 1".

19. Director''s Responsibility Statement

The financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. For periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the then applicable Accounting Standards in India (''previous GAAPâ). These are the Groupâs first Ind AS financial statements. The date of transition to Ind AS is April 1, 2015.

Pursuant to Section 134 (3) (C) and 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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.

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

20. Appointment of Directors

The Board of Directors of the Company have appointed Dr. Amit Varma and Dr. Ramesh S. Bilimagga as Additional Directors with effect from November 10, 2016, liable to retire by rotation, who shall hold office till the date of ensuing Annual General Meeting, unless reappointed by the shareholders. The Board of Directors have made necessary recommendation for the appointment of Dr. Amit Varma and Dr. Ramesh S. Bilimagga as Directors of the Company at the ensuing Annual General Meeting.

21. Resignation of Directors

Mr. Prakash Parthasarathy, Non-Executive Director, nominee of PI Opportunities Fund, retired by rotation at the Annual General Meeting held on September 29, 2016 and had not sought for reappointment at the Annual General Meeting. The Board place on record its appreciation for the contribution made by Mr. Prakash Parthasarathy during his tenure as Director of the Company.

Dr. Jennifer Gek Choo Lee, Non-Executive Director, nominee of V-Sciences Investments Pte Ltd, and Mr. Rajesh Singhal, Non-Executive Director, nominee of Milestone Private Equity Fund have resigned from Directorships with effect from August 12, 2016. The Board place on record its appreciation for the contributions made by Dr. Jennifer Gek Choo Lee and Mr. Rajesh Singhal during their tenure as Directors of the Company.

As per the provisions of the Companies Act, 2013, Dr. B. S. Ajaikumar and Mr. Gangadhara Ganapati, Directors of the Company, retire at the forthcoming Annual General Meeting and have sought for reappointment.

22. Key Managerial personnel

Mr. Krishnan S. Subramanian, Chief Financial Officer has resigned from the Company with effect from August 16, 2016. Mr. Yogesh Patel has been appointed as Chief Financial Officer of the Company with effect from October 6, 2016.

The Board hereby places on record its appreciation for the contribution made by Mr. Krishnan S. Subramanian during his tenure as Chief Financial Officer of the Company.

23. Committees of the Board and their constitution

The Board has formed the following five Committees:

1. Audit and Risk Management Committee

2. Nomination and Remuneration Committee

3. Stakeholdersâ Relationship Committee

4. Corporate Social Responsibility Committee and

5. Strategy Committee.

(a) Audit and Risk Management Committee

1. Mr. Suresh Chandra Senapaty, Chairman

2. Dr. Sudhakar Rao

3. Mr. Shanker Annaswamy

The Audit committee was reconstituted and renamed as the "Audit and Risk Management Committee" by a meeting of the Board of Directors held on May 29, 2015.

(b) Nomination and Remuneration Committee

Pursuant to the requirements of Section 178 of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers), Rules 2014, the Board of Directors have reconstituted the Nomination and Remuneration Committee on May 29, 2015.

The members of the Nomination and Remuneration Committee are:

1. Mr. Shanker Annaswamy, Chairman

2. Dr. Sampath Thattai Ramesh

3. Mr. Gangadhara Ganapati

(c) Stakeholders'' Relationship Committee

The members of the Stakeholdersâ Relationship Committee are:

1. Mr. Gangadhara Ganapati, Chairman

2. Dr. B.S Ajaikumar

(d) Corporate Social Responsibility Committee

The members of the Corporate Social Responsibility Committee are:

1. Dr. Sudhakar Rao, Chairman

2. Dr. Sampath Thattai Ramesh

3. Ms. Bhushani Kumar

4. Dr. B S Ajaikumar

(e) Strategy Committee

The present members of the Committee are:

1. Dr. B. S. Ajaikumar, Chairman

2. Mr. Gangadhara Ganapati

3. Mr. Suresh Senapaty

4. Mr. Shanker Annaswamy

5. Dr. Amit Varma

24. Board Evaluation

In terms of the requirement of the Companies Act, 2013 and the Listing Regulations, an annual performance evaluation of the Board was undertaken. The annual evaluation process covered the evaluation of the Board as a whole, Committees of the Board, Chairperson, Executive and Non- Executive Directors and Independent Directors, and were carried out through a structured questionnaire having qualitative parameters and feedback based on ratings. The Board had, during the year, opportunities to interact and make an assessment of its functioning as a collective body. In addition, there were opportunities for Committees to interact, for Independent Directors to interact amongst themselves and for each Independent Director to interact with the Chairman. The Board found that, there was considerable value and richness in such discussions and deliberations.

The process of Board Evaluation was led by the Chairman of the Nomination and Remuneration Committee. The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board that were functioning well with periodic reporting by the Committees to the Board on the work done and progress made during the period. The Board acknowledged the efforts and contributions made by the Chairperson, Executive and Non- Executive Directors and Independent Directors towards the Companyâs performance.

The Board also noted that the actions identified in the past evaluation had been acted upon. Subsequent to the evaluation done in the financial year 2016-17, given the changing external environment, some areas have been identified for the Board to engage itself with and these will be acted upon.

25. Risk Management

The Company has put in place an enterprise wide risk management framework. This holistic approach provides the assurance that, to the best of its capabilities, the Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives. The Audit and Risk Management Committee advises and guides the Company for taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities. The Committee reviews the Companyâs portfolio of risks and considers it against the Companyâs Risk Appetite. The Committee also recommends changes to the Risk Management Technique and / or associated frameworks, processes and practices of the Company.

For further details on the enterprise wide risk management framework, refer to Management and Discussion Analysis Report forming part of the Annual Report.

26. Corporate Social Responsibility

The provisions of Corporate Social Responsibility ("CSR") under the Companies Act, 2013 were not applicable to the Company for the financial year 2016-17.

However, your Company has been, over the years, pursuing as a part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself and create an environment of partnership for inclusive development.

Over the years, HCG has also been involved in a number of social initiatives to support the community and bring about a positive change in preventive healthcare, through education and awareness building activities. Its CSR programmes are delivered through HCG Foundation, which is committed to providing health services and subsidized medical care to the socially and economically marginalized sections of society.

Free cancer detection and screening camps, Continuous Medical Education (CMEs) are now a regular feature in HCGâs community outreach program. We believe that organizational growth is impossible without the sharing and pooling of our knowledge and resources. Best practices are disseminated across our facilities through coordinated CMEs, Continuous Nursing Education (CNEs) and seminars. HCG organizes such continuous education programmes every year.

The CSR Committee has formulated a Corporate Social Responsibility Policy which indicates the activities the Company proposes to undertake as a part of its CSR programme.

27. Internal Control system and their adequacy

As part of the Corporate Governance Report, CEO/ CFO certification is provided, for assurance on the existence of effective internal control systems and procedures in the Company.

The internal control framework is supplemented with an internal audit program that provides an independent view of the efficacy and effectiveness of the process and control environment and supports a continuous improvement program. The internal audit program is managed by an Internal Audit function and the Audit and Risk Management Committee of the Board.

28. Vigil Mechanism for Directors and employees

Section 177(9) of the Companies Act, 2013, mandates every listed company or such class of companies as may be prescribed to establish a Vigil mechanism for its Directors and employees, which shall function as a channel for receiving and redressing of employeesâ complaints and shall be operated by the Audit and Risk management committee. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.

Under this policy, we encourage our employees to report their genuine concern of any conduct that results in violation of the ethical behaviour, or to report any act, if not conducted in a fair, transparent manner thereby compromising professionalism, honesty and integrity (on an anonymous basis, if employees so desire).

This meets the requirement under Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations.

Mechanism followed under the process is appropriately communicated within the Company across all levels and has been displayed on the Companyâs intranet and website at www.hcgel.com. The Audit and Risk Management Committee periodically reviews the functioning of this mechanism.

29. Companyâs Policy on Appointment and Remuneration of Directors

As on March 31, 2017, the Board consists of 9 members, of which 5 Directors are Independent Directors and 3 are Non-Executive Directors. Dr. B. S. Ajaikumar, Chairman & CEO is the only Executive Director on the Board.

An appropriate mix of Executive and Independent Directors ensures greater independence of Board. The Company has been following well laid down policy on appointment and remuneration of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel.

The Policy of the Company on the Directorâs appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of section 178 of the Companies Act, 2013, is available on our website www. hcgel.com. We affirm that the remuneration paid to Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

30. Particulars of employees

A statement containing, inter alia, names of employees employed throughout the financial year and in receipt of remuneration of INR 12 million or more, employees employed for part of the year and in receipt of INR 1 million or more per month, pursuant to Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is also provided in Annexure 4 to this report.

31. Significant and Material orders

32. Statutory Auditors

Under Section 139 of the Indian Companies Act, 2013 and Rules made there under, it is mandatory to rotate the Statutory Auditors on completion of the maximum term permitted under the said section.

Since the tenure of M/s. Deloitte Haskins & Sells, as Statutory Auditors would come to an end with the conclusion of the ensuing Annual General Meeting (AGM), and cannot be reappointed as Statutory Auditors at the AGM, the Audit and Risk Management Committee have recommended and the Board of Directors, subject to the approval of the shareholders have approved the appointment of M/s. B S R & Co. LLP (Firm Registration No. 101248W/W-100022) as Statutory Auditors on February 08, 2017, for a term of 5 years commencing from the conclusion of the Annual General Meeting of the Company scheduled to be held on August 10, 2017, till the conclusion of the Annual General Meeting to be held in the year 2022. The first year of audit will be of the financial statements for the year ending March 31, 2018, which will include the audit of the quarterly financial statements for the year.

The Company has also received a confirmation from M/s. B S R & Co. LLP Chartered Accountants, Bangalore, to the effect that their appointment, if made, at the ensuing Annual General Meeting, would be within the limits as mentioned in the provision of Section 141 of the Companies Act, 2013 and are eligible to be appointed.

Suitable resolution in this regard has been recommended by the Board of Directors of the Company for the consideration and approval of the shareholders at the ensuing AGM.

33. Auditorsâ Report

There are no qualifications, reservations or adverse remarks made by M/s Deloitte Haskins & Sells, Statutory Auditors in their report for the financial year ended March 31, 2017; and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

34. Material changes and commitments, if any, affecting the financial position of the company occurred between the end of the financial year to which these financial statements relate and the date of the report:

There are no other material changes affecting the financial position of the Company between the end of the financial year to which this financial statements relate and the date of the report.

35. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. V Sreedharan, Partner, M/s V Sreedharan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended March, 31, 2017. The said Report of the Secretarial Audit in Form MR 3 is annexed herewith as "Annexure 2" and forms part of the report.

There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor of the Company, in their Secretarial Audit Report.

36. Cost Auditor

Cost Audit Report for the financial year ended 31st March 2016 has been duly filed with the Registrar of Companies.

37. Particulars regarding Conservation of energy, Technology absorption and Foreign exchange earnings and outgo as per Section 134(3)(m) of the Companies Act, 2013.

Conservation of energy: The operations of your Company are not energy-intensive. However, significant measures are being taken to reduce energy consumption by using energy efficient equipment. The Company has taken initiatives to conserve energy and consume less energy.

Your Company constantly evaluates and invests in new technology to make the infrastructure more energy efficient. As the cost of energy forms a very small portion of the total costs, the financial implications of these measures are not material.

Technology absorption: Over the years your Company has brought into the country the best and the world class equipments for the treatment of cancer.

Being at the forefront in the fight against cancer involves pioneering innovative treatments, methods and the introduction of industry-changing technologies that benefit both the medical expert and the patient. HCG has led the march against cancer and set benchmarks in the industry by introducing many new technologies like TrueBeam, CyberKnife, Da Vinci - Robotic Surgery and Tomotherapy. Most of these equipments are imported.

The Company has a dedicated team of technically competent personnel who relentlessly work on technology upgradation and development related fields. Your Company also deploys its resources from time to time and imparts necessary training to keep abreast of the continuously changing technology.

Research and Development:

The Research and Development is intellectual property driven accelerated bridge between basic research and clinical implementation through high quality translational research to understand disease pathogenesis, translate such knowledge into improvements in patient care and set new paradigm in personalized medicine era through biospecimen banking. Putting a step forward for comprehensive cancer care, the R&D focusses on high end molecular diagnostics, genomics and other high end technologies and platform to identify and utilize genetic variability in cancer and genetic make-up of the individual to formulate personalized therapeutic approaches that would enable maximum efficacy with a concomitant improvement in patient quality of life.

As a comprehensive cancer hospital dedicated to transforming cancer care, HCG is at the forefront of cancer research, ensuring our patients have access to cutting edge treatments that deliver the best possible outcomes. We are focused on delivering patient-centred care through clinical, academic and research excellence. Medicine is constantly evolving. To ensure we remain at the forefront of the latest approaches to cancer care and treatment, we have dedicated research teams onsite that focus on medical physics, radiation oncology, radiotherapy, medical oncology, as well as an integrated clinical trials department. This provides the opportunity for our patients and team members to get involved in vital research, including the trial of new drugs, devices and other treatment techniques.

Triesta R&D offers the following range of services for Pharma, biotech, CRO and diagnostic companies engaged in drug discovery, drug development, biomarker discovery and companion diagnostics development:

- Targeted Gene sequencing

- Exome sequencing services

- Tumor profiling services

- Enriched Clinical trial

- Pharmacogenomics - Enable pharma in drug development

- Biomarker Validation

- Companion diagnostics

Our research is focused on the discovery of clinically relevant gene signatures to bring novel biomarkers of diagnostic, prognostic and predictive value in cancer patients. We also carry out research on areas where an understanding of intracellular signalling mechanisms has the potential to yield breakthrough-targeted therapeutics. R&D team has successfully written Investigator Initiated Research (IIR) projects for extramural grants. Triesta is actively publishing research papers, case studies, abstracts in international & national forums like ASCO, AACR and Indian Cancer Congress. Having access to well annotated and high quality clinical samples of various cancer types, Triesta is the preferred partner for global pharma companies, academia, diagnostic companies, venture & technology groups for oncology research and clinical projects.

Foreign exchange earnings and outgo: The details of Foreign Exchange Earnings and Outgo during the year ended March 31, 2017 vis a vis during the year ended March 31, 2016 is as under.

Particulars	For the year ended (INR)
	March 31, 2017	March 31, 2016
Expenditure in Foreign Exchange
Interest	2,841,133	5,014,116
Travel expenses	10,833,830	20,859,873
Repairs and maintenance: Machinery	23,205,150	19,153,402
Professional charges	24,600,351	21,676,217
Business promotion expenses	1,927,913	1,681,885
Total	63,408,377	68,385,493
Imports
Capital Goods	20,978,447	435,057,602
Consumables	15,495,448	17,753,402
Earnings in foreign exchange
Medical service income	361,565,939	356,380,654

38. Prevention of Sexual Harassment Policy

During the year 2016-2017, two complaints were received at a group level and the same were investigated and resolved as per the provisions of the Act. There were no complaints pending as on March 31, 2017.

In order to build awareness in this area, the Company has been conducting programmes in the organization on a continuous basis.

39. Green initiative

As a green initiative in corporate governance, Ministry of Corporate affairs have permitted companies to send electronic copies of Annual Report, notices, etc., to the e-mail IDs of shareholders who have registered their e-mail id either with their Depository Participants or with the Company/Registrars. We are accordingly arranging to send soft copies of these documents to the e-mail IDs of shareholders available with us.

In case any of the shareholders would like to receive physical copies of these documents, the same shall be forwarded on request to the company by post or an e-mail.

40. Employee Stock Option Schemes

As required under Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014, the applicable disclosures as on March 31, 2017 are annexed to this Report as "Annexure 3".

During the financial year under review, pursuant to regulation 12(1) of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014, the Company has obtained the approval of the members at the previous Annual General Meeting held on September 29, 2016, for ratifying Employee Stock Option Scheme of the Company (HCG ESOS 2014), the pre-IPO plan. HCG ESOS 2014 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulation 2014.

The Nomination and Remuneration Committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period subject to fulfillment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Companyâs shares at a price determined on the date of grant of options.

The stock compensation cost is computed under fair value method and accounted in line with graded vesting of options over the total vesting period of four years. For the year ended March 31, 2017, the Company has recorded stock compensation expense of INR 9,450,182 (2016: INR 5,392,740).

For further details on the Scheme refer Annexure 3 of the Directorâs report.

41. Corporate Governance

The Company is committed to observe good corporate governance practices. The report on Corporate Governance for the financial year ended March 31, 2017, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms a part of this Annual Report.

Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated by Regulation 34 (3) of SEBI (LODR) Regulations, 2015 is attached to this report.

42. Acknowledgements and Appreciations

For and on behalf of the Board of Directors

Date: May 24, 2017 Dr. B. S. Ajaikumar

Place: Bangalore Chairman

Mar 31, 2016

Dear members,

The Directors have pleasure in presenting the Annual Report of your Company together with the Audited Standalone and Consolidated Financial Statements and the Auditors'' Report thereon for the year ended March 31, 2016.

The financial statements and other reports annexed to the Annual report are in compliance with the requirements of the Companies Act, 2013.

1. Financial Results

The highlights of consolidated financial results of your Company and its subsidiaries and your Company as a standalone entity are as follows:

2015-16 2014-15

(Rs. in millions) (Rs. in millions) Consolidated

Income from operations 5,819.77 5,193.75

Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items 4,923.29 4,431.35

Profit before other income, Depreciation, Interest cost, tax and exceptional items 896.48 762.40

Other income 34.51 48.15

Depreciation, Finance Charges and exceptional items 880.97 780.41

Profit before tax 50.02 30.14

Profit after tax before share of Profit of minority interest 54.33 46.97

Profit after tax 12.21 8.34

Standalone

Income from operations 4,702.13 4,201.50

Total Expenditure excluding Depreciation, Interest cost, tax and exceptional items 4,027.79 3,637.02

Profit before other income, Depreciation, Interest cost, tax and exceptional items 674.34 564.48

Other income 29.95 42.91

Depreciation, Finance Charges and exceptional items 761.87 683.48

Profit/(Loss) before tax (57.58) (76.09)

Profit/Loss after tax (28.45) (23.66)

2. Performance Overview

Consolidated Operations

The consolidated income from operations for FY 2015 - 16 was Rs. 5,819.77 millions as compared to Rs. 5,193.75 millions in the previous fiscal year, reflecting a growth of 12%. EBITDA in FY 2015- 16 was Rs. 896.48 millions as compared to Rs. 762.40 millions in FY 2014-15, reflecting a year-on-year increase of 17.6%. EBITDA margin for the year was 15.4% as compared to 14.7% in FY 2014-15, reflecting an increase of 70 basis points. PAT in the fiscal year was Rs. 12.21 millions as compared to Rs. 8.34 millions in FY 2014-15 reflecting a year-on-year increase of 47.6%.

The revenue growth was driven by 12% growth from HCG Centres (including the multi-specialty hospitals) while the Milann centres contributed growth of 14%. HCG Centres constituted 92% of the consolidated revenues for the Company and the remaining 8% of the consolidated revenue was contributed by Milann Centres.

Standalone Operations

The Company ended the year FY 2015-16 with income from operations of Rs. 4,702.13 millions as compared to Rs. 4,201.50 millions, reflecting an increase of 12%, compared to the previous fiscal year. Our EBITDA before exceptional items for FY 2015-16 was Rs. 704.29 millions with EBITDA margin of 15%.

3. Business Strategy

Expand the reach of our cancer care network in India HCG plans to expand its network in India by establishing new cancer centres across India and by expanding the capacity and service offering of the existing HCG cancer centres. We carry out a competitive assessment of the markets in which HCG plans to expand the network based on a number of factors, including the estimated incidence of cancer in the primary and secondary catchment population, the number of comprehensive cancer centres, if any, in the catchment; the average distance patients have to travel to avail of such comprehensive cancer care; affordability of healthcare generally and cancer care in particular; and the available third party payer options, whether corporate, government or private insurance. HCG will continue to expand its network through green field projects, partnership arrangements and acquisitions; and afirmed that the past experiences will aid the Management in identifying potential opportunities in the future and assist HCG in integrating new cancer centres into the existing HCG network.

Strengthen our HCG brand to reach more cancer patients We believe that our HCG brand distinguishes us from our competitors. As we establish new comprehensive cancer centres across India, we plan to invest in building our brand, enhancing our market presence, brand image and visibility. We intend to strengthen our patient support groups comprising cancer survivors to further spread awareness of cancer screening and to educate patients regarding cancer treatment options and their relative outcomes and benefits. Through these initiatives, we seek to further strengthen our brand and our commitment to the community, cancer patients and their families.

Expand our cancer care network to Africa We believe that despite the growing incidence of cancer, there is a shortage of cancer centres in many countries in Africa. As a result, patients suffering from cancer often travel outside the region at a significant cost for availing quality cancer care, including to our comprehensive cancer centres in India. In the past, we have experienced an increase in the number of patients travelling from Africa and other regions to our centre of excellence in Bengaluru, as well as to our other comprehensive cancer centres in India for cancer treatment. We believe that this growing demand presents us with an opportunity to establish a network of specialty cancer centres in Africa.

Upgrade and strengthen our information technology infrastructure

We are in the process of significantly upgrading our information technology infrastructure in order to enhance the quality of care delivered to patients and to further enhance our clinical best practices and research capabilities. Our planned information technology infrastructure will be based on a private cloud-computing system and will encompass a centralised EMR system seamlessly integrated with various other centralised systems including HIS and ERP system. We believe that the implementation of these information systems will maximize efficienciesÂ through the greater integration of our network and help us fine tune protocols through knowledge sharing and collaboration. Further, we believe that these initiatives will enhance our ability to conduct longitudinal research studies (which are long-term observational research studies), and associate clinical outcomes with mutation and other genomic findings in cancer patient tissues maintained at our biorepository. We believe that this will position us as a partner of choice for cancer researchers and academia.

Expand our Milann network of fertility centres across India

and build our Milann brand

We believe that in expanding our Milann network, we are well-positioned to leverage HCG''s successful track record of growing through partnerships with specialist physicians and hospitals, as well as our relationship base within the medical community.

We intend to invest in building our Milann brand through targeted media campaigns focusing on building patient awareness of fertility treatment primarily through patient testimonials and socially relevant messages. We also intend to undertake community outreach programmes, strengthen our patient support groups and undertake other awareness building activities among corporate entities. In addition, we intend to undertake various direct consumer marketing activities, including advertising in print, television, outdoor and digital media.

4. Management''s Discussion and Analysis Report

The Management''s Discussion and Analysis Report on the company''s financial and operational performance, industry trends, business outlook and Initiatives and other material changes with respect to the company and its subsidiaries, wherever applicable, are presented in separate section which forms part of the Annual Report.

5. Transfer to reserves

There are no appropriations to/from the General reserves of the company during the year under review.

6. Dividend

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.

7. Consolidated financial statements

The consolidated financial statements of the company for the financial year ended March 31, 2016, prepared in accordance with Indian GAAP forms part of this Annual Report.

8. Subsidiaries and Associates

In accordance with Section 129(3) of the Companies Act, 2013 read with Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable accounting standards, the consolidated financial statements of the Company, prepared in accordance withthe relevant accounting standards specifed under Section 133 of the Companies Act, 2013 read with the rules made there under, forms part of this Annual Report. In view of the same, the financial statements and other documents of each Subsidiaries and Associate Companies are not attached to this Report.

Further, pursuant to proviso 3 and 4 of Section 136 (1) of the Companies Act, 2013:

a) The Annual Report of the Company, containing therein its standalone and consolidated financial statements are available on the website of the Company, being www. hcgel.com.

b) The audited financial statements of subsidiary companies will be made available on the website of the Company, being www.hcgel.com, post approval by shareholders of the Company.

As on March 31, 2016, the Subsidiaries and Associate Companies of the Company including proposed investments are as under, of which none are material subsidiaries. All the subsidiaries are engaged in health care activities. Pursuant to the provisions of the section 133 of the Companies Act 2013, a statement containing the salient features of the financial statements of the Company''s subsidiaries and associates in Form AOC-1, is annexed herewith as "Annexure 6" and forms part of the Report.

Sl. Name of the entity Country of % of ownership held No. Incorporation by the Company as at March 31, 2016

A HCG Medi-Surge Hospitals Private Limited India 74.00%

B Malnad Hospital & Institute of Oncology Private Limited India 70.25%

C HealthCare Global Senthil Multi Specialty Hospitals Private Limited India 100.00%

D MIMS HCG Oncology Private Limited India 100.00%

E BACC Healthcare Private Limited India 50.10%

F HealthCare Diwan Chand Imaging LLP India 75.00%

G HCG Pinnacle Oncology Private Limited India 50.10%

H APEX HCG Oncology Hospitals LLP India 50.10%

I HCG Regency Oncology Healthcare Private Limited India 50.10%

J DKR Healthcare Private Limited (formerly Parenthood Healthcare India 50.10% Private Limited) 100% subsidiary of BACC Healthcare Private Limited, which issubsidiary of the company

K HCG NCHRI Oncology LLP India 51.00%

L HCG Oncology LLP India 74.00%

M Strand-Triesta Cancer Genomics LLP India 30.00%

N HCG EKO Oncology LLP (incor- porated on May 15, 2015) India 50.50%

O HCG (Mauritius) PVT. LTD. (incorporated on May 22, 2015) Mauritius 100.00%

P Healthcare Global (Africa) PVT. LTD. (incorporated on May 22, 2015) Mauritius 100.00% subsidiary of HCG (Mauritius) PVT. LTD, which is subsidiary of the company Q HealthCare Global (Uganda) Private Limited, subsidiary of HCG (Africa) Uganda 100.00% PVT. LTD, which is subsidiary of the company R HealthCare Global (Kenya) Private Limited, subsidiary of HCG (Africa) PVT. Kenya 100.00%

LTD, which is subsidiary of the company S HealthCare Global (Tanzania) Private Limited, subsidiary of HCG (Africa) Tanzania 100.00% PVT. LTD, which is subsidiary of the company

8.1 Subsidiaries incorporated during the Financial Year

a) HCG (Mauritius) Pvt. Ltd. ("HCG Mauritius"): HCG Mauritius was incorporated on May 22, 2015, under the Companies Act, 2001 of Mauritius, as a private limited company. It has its registered office at St Louis Business Centre, Cnr Desroches and St Louis Streets, Port Louis, Mauritius. HCG Mauritius is authorised to hold companies which are primarily engaged in the business of treating persons with cancer, carrying on research in the field of oncology and providing various services in the field of oncology. HCG (Mauritius) Pvt. Ltd is a Wholly Owned Subsidiary of the Company.

b) HealthCare Global (Africa) Pvt. Ltd ("HCG Africa"): HCG Africa was incorporated on May 22, 2015, under the Companies Act, 2001 of Mauritius, as a private limited company. It has its registered office at St Louis Business Centre, Cnr Desroches and St Louis Streets, Port Louis, Mauritius. HCG Africa is authorised to engage in the business of treating persons with cancer, carrying on research in the field of oncology and providing various services in the field of oncology and hold companies which are engaged in the same business. HCG Mauritius holds 113,002 ordinary shares of USD 1 each aggregating to 100% of the issued and paid up share capital of HCG Africa.

c) HCG EKO Oncology LLP ("HCG EKO LLP"): HCG EKO LLP was incorporated on May 15, 2015, under the LLP Act as a limited liability partnership firm. It has its registered office at HCG Tower, No. 8, P Kalinga Rao Road, Sampangi Rama Nagar, Bengaluru 560 027, Karnataka. HCG EKO LLP is authorised to primarily engage in the business of setting up hospitals at Kolkata with high end linear accelerators, oncology pharmacy and matters incidental and ancillary thereto.

8.2 Disinvestments made by the Company during the Financial Year

a) Shareholding in other Subsidiaries of Africa: The Company has transferred its entire shareholding in HealthCare Global (Uganda) Private Limited ("HCG Uganda"), HealthCare Global (Kenya) Private Limited ("HCG Kenya") and HealthCare Global (Tanzania) Private Limited ("HCG Tanzania") to HealthCare Global (Africa) Pvt. Ltd. Accordingly, HCG Uganda, HCG Kenya and HCG Tanzania have become level two subsidiaries of the Company.

b) Shareholding in HCG TVH Medical Imaging Private Limited ("HCG TVH"): Our Company has entered into a share purchase agreement dated November 23, 2015 with HCG TVH, our erstwhile subsidiary and Anderson Diagnostics Private Limited. Pursuant to the terms of this agreement, our Company has transferred its entire shareholding in HCG TVH aggregating 51.00% of the total paid up equity share capital of HCG TVH to Anderson Diagnostics Private Limited for an aggregate consideration of Rs.510,000. Accordingly, HCG TVH has ceased to be the subsidiary of the Company during the Financial Year.

9. Public deposits

The company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 during the year under review.

10. Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

Loans/Advances given, Investments made, Guarantees provided, securities extended by the company during the year/previous year covered under Section 186 of the Companies Act, 2013 are as under. The loans and advances were utilized for the furtherance of the objects of these companies and for the operations in the ordinary course of business.

Name of the Company/Entity 2015-16 2014-15

Nagpur Cancer Hospital and Research Institute Private Limited - 22,163,300

HealthCare Global Senthil Multi-Specialty Hospitals Private Limited 553,615 293,072

HCG TVH Medical Imaging Private Limited 135,428 241,602

MIMS HCG Oncology Private Limited 130,832 134,866

HCG Medi-surge Hospitals Private Limited 20,230,932 27,656,963

Malnad Hospital and Institute of Oncology Private Limited 195,054 832,852

Healthcare Global (Kenya) Private Limited 854,699 1,262,000

Healthcare Global (Tanzania) Private Limited 1,866,962 709,371

HCG Pinnacle Oncology Private Limited 33,944,855 62,207

BACC Healthcare Private Limited 733,181 16,204

HCG Foundation - 81,254

HCG (Mauritius) Private Limited 620,444 -

HealthCare Global (Africa) Private Limited 620,444 - Investments made by the company during the year/previous year are as listed below:

Name of the Company/Entity 2015-16 2014-15

HealthCare Diwan Chand Imaging LLP 130,594 3,879,174

APEX HCG Oncology Hospitals LLP 5,112,200 21,525,000

HCG Regency Oncology Healthcare Private Limited 24,499,993 30,400,000

Healthcare Global (Kenya) Private Limited 1,262,000 3,710,850

Healthcare Global (Tanzania) Private Limited - 63,100

Malnad Hospital and Institute of Oncology Private Limited - 2,060,600

HCG (Mauritius) Private Limited 11,155,487 -

HCG Oncology LLP 68,715,301 - Security/Guarantee provided by the company during the year/previous year are as listed below:

Name of the Company/Entity 2015-16 2014-15

HCG Medi-surge Hospitals Private Limited 292,000,000 - Guarantees provided by the company during the year/previous year are as listed below:

Name of the Company/Entity 2015-16 2014-15

BACC Healthcare Private Limited 18,100,000 33,700,000

HCG Pinnacle Oncology Private Limited 10,900,000 -

HCG Oncology LLP 66500000 -

11. Related party transactions

All transactions entered into with the related parties as defined under the Companies Act, 2013, during the financial year were in the ordinary course of business and on an arm''s length basis and do not attract the provisions of Section 188 of the Companies Act, 2013.

Disclosures as required under Section 134(3) (h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in Form AOC 2 as specifed under Companies Act, 2013, which is annexed herewith as "Annexure 5" and forms part of the report.

12. Initial Public Offer

The Board of Directors of the Company and the Shareholders of the Company on May 29, 2015 and June 15,

2015, respectively, had approved the Initial Public Offer of upto 14,000,000 Equity Shares of Rs. 10 each and Offer For Sale of Equity Shares by certain members of the Company, upto 23,000,000 Equity Shares subject to approval of all regulatory authorities concerned in this regard.

During the year, the company has completed its Initial Public Offering of 29,800,000 equity shares of Rs. 10 each, comprising of Fresh Issue of 11,600,000 equity shares and Offer For Sale of 18,200,000 equity shares at a premium of Rs. 208 per equity share. The total issue size was Rs. 6496.4 million. The shares got listed the National Stock Exchange of India Limited and BSE Limited on March 30, 2016.

The proceeds of the initial public offer are proposed to be utilized for the following purposes:

1. Purchase of medical equipment

2. investment in IT software, services and hardware

3. Pre-payment of debt; and

4. General Corporate Purposes

During the year under review, the company has not deviated in utilizing the proceeds of issue.

13. Share capital

a) Authorized Capital: There is no change in the authorized share capital of the Company during the year. As on the date of this report, the authorized share capital of the Company is Rs. 1,270,000,000 consisting of 127,000,000 equity shares of Rs. 10 each.

b) The Issued, Subscribed and Paid up Capital has increased from Rs. 699,838,080 consisting of 69,983,808 equity shares of Rs. 10 each to Rs. 850,759,860 consisting of 85,075,986 equity shares of Rs. 10 each during the year.

The increase in the Issued, Subscribed and Paid up Capital was on account of the Preferential allotment of shares made by the Company upon conversion of Series C and Series D share warrants which were issued by the Company to Dr. B.S. Ajai Kumar, Promoter; allotment of shares to Dr. M. Gopichand (Pursuant to the Scheme of merger entered into by and between HealthCare Global Enterprises Limited and its subsidiary HealthCare Global Vijay Oncology Private Limited duly approved by the Hon''ble High Court of Karnataka), allotment of shares to employees pursuant to ESOP Scheme 2010 and 2014, apart from the Fresh Issue of shares to the public through IPO.

14. ERP Implementation

Your company is in the advanced stages of the SAP implementation project at all the hospitals/centres across the country. The implementation of ERP will standardize and improve the operational processes, facilitate control mechanisms through sophisticated checks and balances, minimize duplication and reduce costs.

15. Number of meetings of the Board

The meetings of the Board are scheduled at a regular intervals to decide and discuss on the business performance, policies, strategies and other matters of significance. The schedule of the meetings is circulated to ensure proper planning and effective participation in meetings. In certain exigencies, decisions of the Board are also accorded through circulation.

The Board met twelve times in financial year 2015-16 viz., on April 9, 2015, April 10, 2015, May 29, 2015, June 26, 2015, July 13, 2015, July 24, 2015, September 30, 2015, November

6, 2015, February 11, 2016, March 4, 2016, March 12, 2016 and March 28, 2016. The maximum interval between any two meetings did not exceed 120 days.

Detailed information regarding the meetings of the Board and meetings of the committees of Board is included in the report on Corporate Governance which forms a part of Directors'' Report.

16. Declaration by Independent Directors

The company has received and taken on record, the necessary declaration from each of the independent directors under Section 149 of the Companies Act, 2013 that they meet with the criteria of their independence.

17. Extract of Annual Return

The extract of the Annual Return of your Company as on March 31, 2016 as provided under sub-section (3) of Section 92 in the Form MGT 9 is annexed herewith as "Annexure 1".

18. Director''s Responsibility Statement

The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (''the Act''), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified).

Pursuant to Section 134 (3) (C) and 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:

a) in the preparation of the annual accounts, 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 at the end of the financial year and of the Profit and loss of the Company for that 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.

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

19. Appointment of Directors

The Board of Directors of the Company, have appointed Mr. Suresh C. Senapaty, Dr. S.T.Ramesh and Mrs. Bhushani Kumar as Independent Directors with effect from May 29, 2015 for a term of 5 years, eligible for re-appointment for an another term of 5 years. Subsequently, the shareholders have approved the appointment of Mr. Shanker Annaswamy and Mr. Sudhakar Rao, Mr. Suresh C. Senapaty and Dr. S.T.Ramesh as Independent Directors at the Extraordinary General Meeting held on June 15, 2015 and the appointment of Mrs. Bhushani Kumar at the Extraordinary General Meeting held on July 13, 2015. All the Independent Directors of the Company have provided necessary declaration that they meet the independence criteria as laid down under Section 149 of the Companies Act, 2013.

20. Resignation of Directors

Dr. Amit Varma, Non-Executive Director, nominee of Milestone Private Equity Fund, has resigned from Directorship, with effect from May 29, 2015. The Board hereby places on record its appreciation for the contribution made by Dr. Amit Varma during his tenure as Director of the Company.

As per the provisions of the Companies Act, 2013, Mr. Prakash Parthasarathy and Mr. Gangadhara Ganapati, Directors of the Company, retire at the forthcoming annual general meeting. Mr. Prakash Parthasarathy, Non-Executive Director, Nominee of PI Opportunities Fund 1, has not offered himself for re-appointment.

21. Key Management personnel

During the year under report, there is no change in Key Managerial Personnel (KMP) in terms of Section 2(51) & Section 203 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re- enactment thereof for the time being in force).

22. Committees of the Board and their constitution

As required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has formed four Committees viz. Audit and Risk Management Committee, Nomination and Remuneration

Committee, Stakeholders'' Relationship Committee and Corporate Social Responsibility Committee.

Keeping in view the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board decides the terms of reference of these Committees and the assignment of members to various committees. The recommendations, if any, of these Committees are submitted to the Board for approval.

(a) Audit and Risk Management Committee

Pursuant to the requirements of Section 177 of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers), Rules 2014, the company has an Audit and Risk Management Committee and the composition of the committee is as under:

1. Mr. Suresh Chandra Senapaty, Chairman

2. Mr. Sudhakar Rao

3. Mr. Shanker Annaswamy

4. Mr. Rajesh Singhal

5. Dr. B.S. Ajai Kumar

6. Ms. Sunu Manuel - Secretary of the Committee.

The Audit committee was last reconstituted and renamed as the "Audit and Risk Management Committee" by a meeting of the Board of Directors held on May 29, 2015.

(b) Nomination and Remuneration Committee Pursuant to the requirements of Section 178 of the Companies Act, 2013 and Rule 6 of the Companies (Meeting of Board and its Powers), Rules 2014, the Board of Directors have reconstituted the Nomination and Remuneration Committee on May 29, 2015.

The members of the Nomination and Remuneration Committee are:

1. Mr. Shanker Annaswamy, Chairman

2. Dr. Sampath Thattai Ramesh

3. Mr. Prakash Parthasarathy

4. Dr. Jennifer Gek Choo Lee

5. Ms. Sunu Manuel - Secretary of the Committee.

The terms of reference of the committee are in compliance with the Companies Act, 2013. The committee shall be responsible for setting policies regarding director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director, evaluation of board, setting up a succession plan and other matters provided under sub-section (3) of section 178 of the Companies Act, 2013.

(c) Stakeholders'' Relationship Committee

The Stakeholders'' Relationship Committee was constituted

by our Board of Directors at their meeting held on May 29, 2015. The scope and function of the Stakeholders'' Relationship Committee is in accordance with Section 178 of the Companies Act, 2013.

The members of the Stakeholders'' Relationship Committee are:

1. Mr. Gangadhara Ganapati, Chairman

2. Dr. Jennifer Gek Choo Lee

3. Mr. Rajesh Singhal

4. Dr. B.S. Ajai Kumar

5. Ms. Sunu Manuel - Secretary of the Committee.

(d) Corporate Social Responsibility Committee The Corporate Social Responsibility Committee was constituted by our Board of Directors at their meeting held on May 29, 2015. The terms of reference of the Corporate Social Responsibility Committee of our Company are as per Section 135 of the Companies Act, 2013 and the applicable rules there under.

The members of the Corporate Social Responsibility Committee are:

1. Mr. Sudhakar Rao, Chairman

2. Dr. Sampath Thattai Ramesh

3. Ms. Bhushani Kumar

4. Dr. B.S. Ajai Kumar

5. Ms. Sunu Manuel - Secretary of the Committee.

23. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, SEBI (LODR) Regulations 2015, and in line with the Company''s Board Evaluation Policy, peer evaluation of all Board members including the Chairman of the Board, annual performance evaluation of its own performance, as well as the evaluation of the working of the Committees of the Board has been carried out. This evaluation was led by the Chairman of the Nomination and Remuneration Committee with specific focus on the performance and effective functioning of the Board. The evaluation process also considers the time spent by each of the Board members, core competencies, personal characteristics, accomplishment of specific responsibilities and expertise.

24. Risk Management

Like any other company functioning in the complex set up of healthcare service industry, your Company is exposed to various risks like competition risks, market fluctuation risks, interest rate risks, exchange rate fluctuation risks, technology obsolescence risks, compliance risks, people risks etc. These risks are assessed from time to time by the

Audit and Risk Management committee and steps are taken to mitigate these risks.

At HCG, management has the overall responsibility to design, implement and monitor an effective process and control environment that is aligned to the inherent risk profile of the organization. Management is responsible for the identification, evaluation and management of significant risks. The Company is in the process of adopting a framework to focus on key risks that might impact achievement of business objectives. The framework entails a structured process to identify, assess and monitor the risks and initiate suitable mitigation strategies for effective risk management. The Board monitors exposure to these risks with the assistance of various committees and senior management.

The internal control framework is designed to manage and mitigate the risks faced by the Company. The Company has designed and implemented an entity level control framework, setting the control philosophy and principles which guide the organization policy and operating process framework. The organizational role, responsibility and accountability structures with appropriate performance oversight processes are defined and aligned to provide an enabling environment to the business units and functions to operate as per the design control environment. Review and oversight procedures are designed to monitor effective adherence as per design.

25. Corporate Social Responsibility

The provisions of Corporate Social Responsibility ("CSR") under the Companies Act, 2013 were not applicable to the Company for the financial year 2015-16.

However, your Company has been, over the years, pursuing as a part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the company itself and create an environment of partnership for inclusive development.

Over the years, HCG has also been involved in a number of social initiatives to support the community and bring about a positive change in preventive healthcare, through education and awareness building activities. Its CSR programmes are delivered through HCG Foundation, which is committed to providing health services and subsidized medical care to the socially and economically marginalized sections of society.

Free cancer detection and screening camps, Continuous Medical Education (CMEs) are now a regular feature in HCG''s community outreach program. We believe that organizational growth is impossible without the sharing and pooling of our knowledge and resources. Best practices are disseminated across our facilities through coordinated CMEs, Continuous Nursing Education (CNEs) and seminars. HCG organizes such continuous education programmes every year.

The CSR Committee formed and constituted as reported under the head Board Committees shall:

a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specifed in Schedule VII of the Companies Act, 2013;

b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a), as applicable; and;

c) monitor the Corporate Social Responsibility Policy of the company from time to time.

26. Internal Control system and their adequacy

The internal control system is commensurate with the nature of business, size and complexity of operations and has been designed to provide reasonable assurance on the achievement of objectives in effectiveness and efciency of operations, reliability of financial reporting and compliance with applicable laws and regulations.

As part of the Corporate Governance Report, CEO/ CFO certification is provided, for assurance on the existence of effective internal control systems and procedures in the Company.

The internal control framework is supplemented with an internal audit program that provides an independent view of the efcacy and effectiveness of the process and control environment and supports a continuous improvement program. The internal audit program is managed by an Internal Audit function and the Audit & Risk Management Committee of the Board.

The scope and authority of the Internal Audit Function is derived from the Audit Charter approved by the Audit & Risk Management Committee of the Board. The Internal Audit function develops an internal audit plan to assess control design and operating effectiveness, as per the risk assessment methodology.

The Internal Audit function provides assurance to the Board and management that a system of internal control is designed and deployed to manage key business risks and is operating effectively.

Management provides action plans to address the observations noted from the internal audit reviews and action plans are monitored towards resolution under the

supervision and guidance of the Audit and Risk Management Committee.

27. Vigil Mechanism for Directors and employees

Section 177(9) of the Companies Act, 2013, mandates every listed company or such class of companies as may be prescribed to establish a Vigil mechanism for its directors and employees, which shall function as a channel for receiving and redressing of employees'' complaints and shall be operated by the Audit and Risk management committee. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.

Under this policy, we encourage our employees to report their genuine concern of any conduct that results in violation of the ethical behaviour, or to report any act, if not conducted in a fair, transparent manner thereby compromising professionalism, honesty and integrity (on an anonymous basis, if employees so desire).

Likewise, under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employee''s reasonable belief that such conduct or practice have occurred or are occurring, reports that information or participates in the said investigation. No individual in the Company has been denied access to the Audit and Risk Management Committee or its Chairman.

This meets the requirement under Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations.

28. Company''s Policy on Appointment and Remuneration of Directors

As on March 31, 2016, the Board consists of 10 members, of which 5 Directors are Independent Directors and 4 are Non- Executive Directors. Dr. B.S. Ajai Kumar, Chairman & CEO is the only Executive Director on the Board.

An appropriate mix of Executive and Independent Directors ensures greater independence of Board. The Company has been following well laid down policy on appointment and remuneration of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel.

The remuneration of executive directors comprises of fixed remuneration and variable pay, based on performance and adheres to the applicable provisions of the Companies Act, 2013 read with relevant rules as detailed in Corporate Governance Report which forms a part of this report.

The remuneration of Independent Directors comprises of sitting fees which is paid for attending the meetings of the Board and the Committees of the Board in accordance with the provisions of Companies Act, 2013.

The Policy of the Company on the Director''s appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of section 178 of the Companies Act, 2013, is available on our website www.hcgel.com. We afirm that the remuneration paid to directors is as per the terms laid out in the nomination and remuneration policy of the Company.

29. Particulars of employees

The disclosure in terms of Section 197 (12) of the Companies Act, 2013, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, in respect of employees of the company, for the year ended March 31, 2016 is provided as Annexure 4 to this Report.

30. Significant and Material orders

During the period under report, there have been no material or significant orders passed by the Regulators/Courts which would have an impact on the going concern status and operations of the company in future.

31. Statutory Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants, Bangalore (Registration No. 008072S), the Statutory Auditors of the Company, have been appointed as the Auditors of the Company at the Annual General Meeting held on 30th September 2014 to hold office for a term of 3 years i.e., till the conclusion of the Annual General Meeting (AGM) of the Company to be held in the year 2017.

The provisions of the Companies Act, 2013 require their appointment to be ratifed by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.

The company has also received a declaration from M/s. Deloitte Haskins & Sells, Chartered Accountants, Bangalore, to the effect that the ratification, if made, would be within the limits as mentioned in the provision of Section 141 of the Companies Act, 2013 and are eligible to be appointed.

32. Auditors'' Report

There are no qualifications, reservations or adverse remarks made by M/s Deloitte Haskins & Sells, Statutory Auditors in their report for the financial year ended March 31, 2016; and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

33. Material changes and commitments, if any, afecting the financial position of the company occurred between the end of the financial year to which these financial statements relate and the date of the report:

There are no other material changes afecting the financial position of the company between the end of the financial year to which this financial statements relate and the date of the report.

34. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. V Sreedharan, Partner, M/s V Sreedharan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the company for the financial year ended March, 31, 2016. The said Report of the Secretarial Audit in Form MR 3 is annexed herewith as "Annexure 2" and forms part of the report.

There are no qualification, reservations or adverse remarks made by the Secretarial Auditor of the Company, in their Secretarial Audit Report.

35. Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost records maintained by the Company in respect of its hospital activity is required to be audited. Your Directors had, on the recommendation of the Audit and Risk Management Committee, appointed M/s. M. Thimmarayaswamy & Co., Cost Accountants to audit the cost records of the Company for the Financial Year 2016- 17, at a remuneration of Rs. 1,00,000 and out of pocket expenses, to be reimbursed at actuals. As required under the Companies Act, 2013, the remuneration payable to the cost auditors is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by the Members, for the remuneration payable to M/s. M. Thimmarayaswamy & Co., Cost Auditors is included in the notice convening the ensuing Annual General Meeting.

36. Particulars regarding Conservation of energy, Technology absorption and Foreign exchange earnings and outgo as per Section 134(3)(m) of the Companies Act, 2013.

Conservation of energy: The operations of your company are not energy-intensive. However, significant measures are being taken to reduce energy consumption by using energy efcient equipment. The Company has taken initiatives to conserve energy and consume less energy.

Your company constantly evaluates and invests in new technology to make the infrastructure more energy efcient. As the cost of energy consumed by the company forms a very small portion of the total costs, the financial implications of these measures are not material.

Technology absorption: Over the years your company has brought into the country the best and the world class equipments for the treatment of cancer. The company has a dedicated team of technically competent personnel who relentlessly work on technology upgradation and development related fields. Your company also deploys its resources from time to time and imparts necessary training to keep abreast of the continuously changing technology.

HCG, as part of its continuous endeavour to provide better healthcare services, has introduced two major latest technologies at some of the centres, during the period under report.

Robotic Surgery: Da Vinci - Robotic Surgery is an advanced form of minimally invasive or laparoscopic (small incision) surgery, where surgeons use a computer-controlled robot to assist them in certain surgical procedures. In recent years robotic surgery has become a new standard of treatment for many cancers including prostate, gynaecological and abdominal surgery. This facility is installed at Bangalore and Ahmedabad centres.

Tomotherapy Treatment System: The TomoTherapy treatment system uses a patented multi-leaf collimator (MLC) that divides the radiation beam into beamlets, all aimed at the tumor. More beam directions give physicians more control in how they plan treatmentsÂand more assurance that dose will be confined to the tumor, reducing the risk of short- and long-term side effects. This facility is installed at Kalinga Rao Road centre, Bangalore.

Both the Robotic Surgery and Tomotherapy treatment facilities are imported and are fully operational.

Research and Development: R&D of new services, designs, frameworks, processes and methodologies continue to be of importance at the company. This allows your company to increase quality and customer satisfaction through continuous innovation.

Foreign exchange earnings and outgo: The details of Foreign Exchange Earnings and Outgo during the year ended March 31, 2016 vis a vis during the year ended March 31, 2015, is as under:

Particulars For the year ended (Rs.)

March 31, March 31,

2016 2015

Expenditure in Foreign Exchange

Interest 5,014,116 6,977,248

Travel expenses 20,859,873 6,625,416

Repairs and maintenance :Machinery 19,153,402 11,788,000

Professional charges 21,676,217 3,562,075

Business promotion expenses 1,681,885 7,518,659

Total 68,385,493 36,471,398

Imports

Capital Goods 435,057,602 259,240,194

Consumables 17,753,402 9,970,579

Earnings in foreign exchange

Medical service income 356,380,654 310,044,092

37. Prevention of Sexual Harassment Policy

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year 2015-2016, two complaints were received by the Company relating to sexual harassment; and the Internal Complaints Committee after due consideration disposed of the cases by taking appropriate actions. There were no complaints pending as on March 31, 2016. 38. Green initiative

As a green initiative in corporate governance, Ministry of Corporate afairs have permitted companies to send electronic copies of Annual Report, notices, etc., to the e-mail IDs of shareholders. We are accordingly arranging to send sofit copies of these documents to the e-mail IDs of shareholders available with us.

In case any of the shareholders would like to receive physical copies of these documents, the same shall be forwarded on written request to the company.

We are also in the process of starting a sustainability initiative with the aim of being carbon neutral and minimize our impact on the environment. Sustainability practices will be implemented and tracked diligently to ensure that we comply with the goals we set for ourselves.

39. Employee stock option schemes

The company has two Employee stock option schemes namely "HCG ESOS 2010" adopted on June 16, 2010 and Employees Stock Option Scheme 2014 (ESOS 2014) adopted in 2014-15. For further details on the scheme refer Annexure 3 of the Director''s report.

40. Corporate Governance

Your Company continues to place greater emphasis on managing its afairs with diligence, transparency, responsibility and accountability and is committed to adopting and adhering to best Corporate Governance practices.

Your company is in compliance with the requirements of SEBI (LODR) Regulations, 2015. The Report on Corporate Governance in terms of Regulation 34 of the said Regulations forms part of the report.

Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated by Regulation 34 (3) of SEBI (LODR) Regulations, 2015 is attached to this report.

41. Management Discussion & Analysis

Report on Management Discussion and Analysis in terms of Regulation 34 of SEBI (LODR) Regulations, 2015 forms part of the report.

42. Acknowledgement

We stay committed to partnering for value creation and take this opportunity to thank one and all who have participated in our journey this far. Your Directors desires to place on record, its sincere appreciation to all employees at all levels, who with sustained dedicated efort and hard work, enabled the company to deliver a good all-round performance. Your Directors also wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by the various consultants, bankers, shareholders and investors at large and look forward to their continued support. We also take this opportunity to express sincere thanks to the medical fraternity and patients for their continued co-operation, patronage and trust reposed in the company and its health services.

For and on behalf of the Board of Directors

Date: May 26, 2016 Dr. BS Ajaikumar

Place: Bangalore Chairman

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