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Shalby Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2024

Your Directors are pleased to present the Twentieth Annual Report on business and operations of the Company along with audited financial statements for the financial year ended March 31,2024.

FINANCIAL PERFORMANCE SUMMARY

The summarized financial highlight is depicted below;

('' in million)

Particulars	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Revenue from operations	8,296.83	7,080.17	9,337.49	8,049.21
Other Income	207.04	195.66	194.26	225.20
Total Expenditure (Except Finance cost & Depreciation/ Amortization)	6,521.13	5,660.61	7,567.08	6,681.77
Profit before Interest Depreciation and Tax	1,982.74	1,615.21	1,964.67	1,592.64
Finance Cost	28.86	31.01	160.33	91.32
Depreciation/Amortization	370.76	370.64	522.44	480.88
Exceptional Item	-	-	-	-
Profit Before Tax	1,583.11	1,213.56	1,281.90	1,020.43
Provision for Taxation (Inclusive of deferred tax)	544.66	405.48	446.93	343.66
Profit After Tax	1,038.45	808.08	834.97	676.77
Other comprehensive income	2.31	2.57	6.43	11.25
Total Comprehensive Income	1,040.76	810.65	841.40	688.02

PERFORMANCE OF THE COMPANY

During the year under review, the revenue from operations of the Company increased to ? 8,296.83 million as compared to ? 7,080.17 million in the previous year. The EBITDA for the year under review increased to ? 1,982.74 million as compared to ?

1.615.21 million in the previous year. Your Company has earned Profit after tax of ? 1,038.45 million as against ? 808.08 million in the previous year.

During the year under review, the consolidated revenue from operations increased to ? 9,337.49 million as compared to ?

8.049.21 million in the previous year. The consolidated EBITDA increased to ? 1,964.67 million from ? 1,592.64 million in the previous financial year.

DIVIDEND

The Board of Directors has recommended a dividend of ? 1.20 per equity share (i.e. 12%) of face value of ? 10/- each on the paid up share capital of the Company for financial year ended on March

31, 2024 aggregating to ? 129.61 million, which if declared, at the ensuing Annual General meeting scheduled on Thursday, September 26, 2024, will be paid to those shareholders whose names appear in the Register of members as at closing hours of business on Thursday, September 19, 2024 (''cut-off date''). In respect of shares held in electronic form, the dividend will be paid on the basis of beneficial ownership furnished by both depositories, NSDL and CDSL for this purpose.

The Register of Members and Share Transfer Books will remain closed from Friday, September 20, 2024 to Thursday, September 26, 2024 (both days inclusive).

DIVIDEND DISTRIBUTION POLICY

this Policy are in line with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 (''Listing Regulations''), and is amended from time to time.

TRANSFER TO RESERVES

The Board of Directors has not appropriated and transferred any amount out of profit to General Reserves and has decided to retain the entire amount in profit and Loss account.

BUSINESS & STRATEGY Upcoming Projects

â¢ Nashik Project: The Company had entered into a definitive O&M agreement with Samruddhi Hospital Pvt Ltd (developer) in the year 2014 for a period of 30 years. Under this arrangement, the developer will construct the hospital building and hand over to your company for investing equipment and technology with an estimated capex of ? 310 million to manage the hospital thereto. The project delayed due to the novel Covid-19 pandemic spread across the globe. The unit is yet to be handed over to the company after the construction.

â¢ Mumbai Project: The Company is in the process of setting up a State of Art facility with 175 bed capacity in the heart of Mumbai, Santacruz. Your company had entered into a long revenue sharing agreement with the trust to manage the entire operations of hospital wherein the existing structure needs to be demolished completely and a new structure will be constructed with an estimated capex of ? 1,600 million. Due to ongoing novel Covid-19 pandemic spread across the globe, the project was delayed. The trust is yet to handover the property to Shalby, which is expected in FY25.

â¢ Franchise Business

Your company has rolled out a unique asset-light franchise business model under Shalby Orthopedics Centre of Excellence (SOCE) brand by leveraging it Orthopedic expertise of more than 30 years. In this process, your company has designed two operational models called Franchise owned Shalby Operated (FOSO), and Franchise owned Shalby Managed (FOSM). So far, we have operationalized 4 franchise units at Lucknow (FOSO), Zynova (FOSM), Gwalior (FOSM) and Ranchi (FOSM). In addition to that one more SOCE at Rajkot location will start its operation in FY2025. With all key strategies, the right people and leadership in place, we remain on course to capitalize our expertise and excellence in Orthopedics and aim to have over 40 SOCEs across India within the next 3-4 years.

â¢ Implant Business

The 4 different pillars that we are focusing on for the year of 2024-25

Pillar 1 - Sales

Sales in the US SAT is looking at coming on board to get to an 8Mn$ from the current number of 4.8Mn for the year that went by. We are looking at getting to this by onboarding more distributors, sales team as well as marketing efforts -We can talk about participating in large congresses, digital marketing, etc.

OUS Sales - SAT is looking for another 8 Mn$ through the right products across SEA (Malaysia), LATAM (5 countries), Russia and other countries where re-imbursements are higher than India at this juncture.

I n SAT business, Capex for instruments will be needed for the same

Pillar 2 - COGS reduction

COGS - We are looking to end the year at a COGS of 50% over 80% across portfolio by improving efficiencies, shift times, process, new vendors and suppliers on boarded. This is a 8 to 12 month project but actions have already been taken and things have started to show up including the current quarter that went by.

Pillar 3 - Capacity Increase and dual supply chain system

Currently, we are dependent on 1 vendor/ supplier for every material and hence cost is high as well as business s affected when our supplier has issues - E.g.: Medimet, Lincotek, etc. Plan is to have a multi-vendor supply system with higher capacity contributing to our sales forecast as well. With higher volume commitments to double our sales, we have initiated and on boarded new vendors with lower COGS as well as increased capacity - This will also protect business continuity

Pillar 4 - New Products - SAT team has to work for Today, next year and 2 years down the line - head of Engineering hired and the team is being built and also surgeons are being on boarded to support the new product initiatives.

Split into 3 parts

A. New Product launch from scratch - CKS Gold, Ambition, TUKS Gold - Expected to launch in 2024-25

B. Improvements in the current system - Additional SKUS in current products, improving our instrument

sets, huge growth in ASCs and hence creating a system to cater to the same, more sleek and improved instrumentation system - This will increase sales of our current products - Every new SKU still goes through a wear test and regulatory approval and is a 6-to-9-month project

C. New Design products to be initiated - Revision Knee, Revision Hip, Dual Mobility, Medial Knee - This project will take time frame of 2 to 3 years.

Sales grows up, COGS down and capacity built to drive growth - New Products are important to make sales grow from short term and long term. This will also put SAT in a good spot from an innovation stand point

CREDIT RATING

During the year under review, ICRA Limited has reaffirmed the long term credit ratings as ICRA A (Stable) on term loans and fund based facilities availed by the Company and the outlook on the long term rating is "Stable". This rating indicates adequate degree of safety regarding timely servicing of financial obligations and low credit risk.

SHARE CAPITAL

During the year under review, there is no change in the share capital of the Company. The authorized share capital of the Company stands at ? 1,177.50 million divided into 117,750,000 equity shares of ? 10 each. The issued, subscribed & paid up share capital of the Company stands at ? 1,080.10 million divided into 108,009,770 equity shares (including treasury shares) of ? 10 each.

SUBSIDIARIES AND ASSOCIATE COMPANIES

As on March 31, 2024, your Company has ten subsidiaries viz. Vrundavan Shalby Hospitals Limited, Shalby International Limited, Yogeshwar Healthcare Limited, Slaney Healthcare Pvt. Ltd., Shalby (Kenya) Limited, Mars Medical Devices Limited, Shalby Hospitals Mumbai Pvt. Ltd., Griffin Mediquip LLP, PK Healthcare Private Limited and Healers Hospital Private Limited.

During the last quarter of year under review, the Company has made strategic investment in PK Healthcare Private Limited (Sanar International Hospital) with an acquisition of 87.26% equity stake to accelerate its presence in Delhi/NCR region with a vision to scale up international business and also consolidate its presence in Northern part of India. PK Healthcare has one subsidiary namely Ningen Lifecare Pvt. Ltd. The Company also made strategic investment in Healers Hospital Private Limited

with an acquisition of 100% equity stake. The said investment in continuation of our strategy to consolidate asset base for its acquisition of Sanar International Hospital at Gurugram.

Mars Medical Devices Limited has further two subsidiaries, namely Shalby Advanced Technologies, Inc. at Delaware, USA for manufacturing and supply of orthopedic implant, instruments, knee systems and hip systems for which company has acquired assets from Consensus Orthopaedics, California, USA and the second one is Shalby Global Technologies Pte Ltd. in Singapore, which are into trading business of said implants and other medical devices. Both these companies are step-down subsidiaries of Shalby Limited. Shalby Advanced Technologies Inc. USA has incorporated its Indian subsidiary namely Shalby Advanced Technologies India Pvt. Ltd. w.e.f. April 11,2024.

As per Reg. 16 of the Listing Regulations, Mars Medical Devices Limited (unlisted wholly-owned Indian subsidiary) and Shalby Advanced Technologies Inc, USA (step-down foreign subsidiary) are material subsidiary companies. However, none of the subsidiaries is a significant material subsidiary.

In accordance with the provisions of Section 129(3) of the Companies Act, 2013 (''the Act'') and Regulation 34 of the Listing Regulations, the Consolidated Financial Statements form part of this Annual Report which shall also be laid before the ensuing Annual General Meeting of the Company for approval of members.

The Standalone and Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. A report on the performance and financial position of each of the subsidiaries and LLP as per the Act is provided as Annexure - A (AOC-1) which forms part of this Report. In accordance with Section 136 of the Act, the audited financial statements, including consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available at Investors Section under Annual Report tab at https://www.shalby.org/. The financial statements of the Company and subsidiary companies will be available for inspection by any shareholder(s) during working hours at the Company''s corporate office and that of the respective subsidiary companies concerned.

AWARDS & RECOGNITIONS

During the financial year 2023-24, your company has been conferred with the following awards / accolades:

1. Medical Value Travel Awards in the category of Specialist

Hospital by FICCI

2. Award for achieving Speciality of the Year in Orthopaedic by MT India Healthcare Awards

3. Best Orthopaedic Hospital at National level by Economic

Times

4. Asia''s biggest Tourism Awards 2024 for best Medical Tourism Centre of Gujarat

5. Dr. Vikram Shah honored with Healthcare Personality of the Year Award by FICCI for his valuable contribution and exemplary work in healthcare sector.

ANNUAL RETURN (MGT-7)

Pursuant to section 92(3) read with section 134(3)(a) of the Companies Act, 2013, the draft Annual return of the Company as on March 31, 2024 is available on the Company''s website.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186 OF THE COMPANIES ACT, 2013

Particulars of loans given, investments made, guarantees given and securities provided in the notes to the standalone financial statements forming part of this annual report.

PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY U/S 188 OF THE COMPANIES ACT, 2013

All the related party transactions that were entered into during the financial year were on arm''s length basis and your Company has taken approval of audit committee, Board of Directors and shareholders whenever applicable. Pursuant to Regulation 23 of the Listing Regulations, all related party transactions were placed before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions for their review and approval.

During the year under review, there was no material transactions carried out with any of the related parties in terms of regulation 23 of the Listing Regulations. The details of the related party transactions are provided in the Annexure - B (AOC - 2) pursuant to Section 134(3)(h) of the Act read with rule 8(2) of The Companies (Accounts) Rules, 2014. Your Company has formulated a policy on ''Related Party Transactions'' which are in line with Listing Regulations and is amended from time to time. Your Company''s policy on related party transactions is available on the website of the Company.

Your directors draw the attention of members to the notes to the financial statements which set out related party disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31,2024, your Company''s board had seven members

comprising of one executive director and six independent directors (including one woman independent director).

The details of Board and Committee composition, tenure of Directors, areas of expertise and other details are available in the Corporate Governance Report, which forms part of this Annual Report.

During the financial year 2023-24, Mr. Sushobhan Dasgupta, Vice Chairman and Global President has retired on January 31, 2024 on account of superannuation. The shareholders, at the 19^th Annual General Meeting held on August 14, 2023, have approved appointment of Mr. Vijay Kedia and Dr. Ashok Bhatia as Independent Directors for 5 years w.e.f May 18, 2023.

As on March 31, 2024, Dr. Vikram Shah, Chairman & Managing Director, Mr. Amit Pathak, Chief Financial Officer and Mr. Tushar Shah, Associate Vice President and Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Act.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet criteria of independence as prescribed under Section 149 (6) of the Act and under Regulation 16(1)(b) of the Listing Regulations and there has been no change in the circumstances which may affect their status as Independent Director during the year. They have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair their ability to discharge their duties with an objective independent judgment and without any external influence.

BOARD MEETINGS

The Board met six times during the year under review, on May 18, 2023, July 20, 2023, October 27, 2023, January 18, 2024, February 7, 2024 and March 12, 2024. The numbers of meetings and attendance of directors have been provided in the Report on Corporate Governance which forms part of Annual Report.

COMMITTEES

The Company has various committees which have been formed in compliance of provisions of the Act and the Listing Regulations and are in compliance with the provisions of relevant statutes.

The Board has constituted following committees.

i. Audit Committee

ii. Risk Management Committee.

iii. Stakeholder Relationship Committee

iv. Nomination and Remuneration Committee

v. Corporate Social Responsibility Committee

vi. Management Committee

The details with respect to the composition, powers, roles, terms of reference, numbers of committees along with their attendance etc. of respective Committees are provided in detail in the ''Report on Corporate Governance'' which forms part of this Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

POLICY ON APPOINTMENT AND REMUNERATION TO DIRECTORS, KMP & SENIOR MANAGEMENT PERSONNEL

Company''s policy on Directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed briefly in the Corporate Governance Report, which forms part of this Annual Report. Your Company''s Policy on remuneration for the Directors, Key Managerial Personnel and other employees and Company''s policy in this regard includes, inter-alia, criteria for determining qualifications, positive attributes, independence of a director and other matters as required under sub-section (3) of Section 178 of the Act and is amended from time to time. The said policy is available on the website of the company.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Company upholds the standards of governance and is compliant with the provisions of Corporate Governance as stipulated under the Listing Regulations. The Report on Corporate Governance for FY 2023-24, as per Regulation 34(3) read with Schedule V of the Listing Regulations forms a part of this Annual Report. The Certificate from Practicing Company Secretary confirming the compliance with the conditions of corporate governance as stipulated by Regulation 34(3) of the Listing Regulations is annexed to this Report.

In compliance with Corporate Governance requirements as per the Listing Regulations, your Company has formulated

and implemented a Code of Conduct for all Board Members and Senior Management Personnel of the Company, who have affirmed the compliance thereto.

In terms of regulation 34 of the Listing Regulations as updated from time to time, the Management 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 and CEO/CFO Certificates thereto, are presented in separate section which forms part of the Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In pursuance of Regulation 34 of the Listing Regulations, top 1000 companies based on market capitalization (calculated as on March 31 of every financial year) are required to prepare and enclose with its Annual Report, a Business Responsibility and Sustainability Report describing the initiatives taken by them from an environmental, social and governance perspectives. A separate report on Business Responsibility is annexed as part of the Annual Report.

PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEE

The criteria for performance evaluation and the statement indicating the manner in which formal annual evaluation has been made by the Board are given in the ''Report on Corporate Governance'', which forms part of this Annual Report.

Pursuant to provisions of the Act and the Listing Regulations the Board has carried out an annual evaluation of its own performance, Board committees and individual directors in the manner prescribed in Performance Evaluation Policy.

DEPOSITS

During the year, the Company has not accepted any fixed deposits from the public as per provisions of the Act and Rules made there under. Hence, the disclosures as required under Companies (Accounts) Rules, 2014, are not applicable to your Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to section 134 (5) of the Act, your Directors hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards read with requirement set out under Schedule III to the Act have been followed and there are no material departures from the same;

b) they 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) they 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) they had prepared the annual accounts on a going concern basis;

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

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

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

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under The Companies (Accounts) Rules, 2014 is set out below;

(A) Conservation of Energy:

The operations of the Company are not energy-intensive. However, the following significant measures are being taken to reduce the energy consumption by using energy efficient equipment.

â¢ Use of LED lights

â¢ Occupancy sensors installation in toilets to avoid permanent illumination and save electrical consumption

â¢ Proper thermal insulation to increase efficiency of HVAC system and thereby reducing energy consumption

â¢ use windows and doors to provide good levels of natural ventilation in some areas within a hospital, allowing mechanical ventilation to be switched off or turned down to save energy

â¢ Provide infrared controllers in water taps as they provide water only when required otherwise they switch off automatically and can save between 5% and 15% of water per tap per year

â¢ Introduction of timer based operation of air handling

units to reduce power consumption

â¢ Energy optimization practices implemented in transformer operation

â¢ VFD installation for AHU motor in a phased manner

â¢ All lifts and OT AHUs are operated with VFD panels

â¢ For recently commissioned units, building orientation has been so designed that helps to maximize use of Day Light and to reduce heat gain in order to reduce energy consumption.

â¢ For recently commissioned units, the building is being constructed by using structural steel to reduce embedded energy and also to reduce the impact of construction activities to the neighborhood and environment and with STP and recycled water is being used for flushing and plant watering to reduce water usage.

â¢ The glass used for facade in a number of facilities is double glazed and is energy efficient low emissivity type which helps in reducing solar beat gain coefficient while improving the visibility.

â¢ Rain water harvesting system installed at our greenfield recently completed projects to conserve natural resources

â¢ HVAC temperature is being adjusted based on the seasonal temperature and particular clinical requirements, to reduce the power consumption.

â¢ Disciplined SOP is being followed for routine maintenance on daily, weekly, monthly, and yearly basis, as required to keep the system installed in check and reduce consumptions of water and electricity.

â¢ I n case of modification or renovation, we maximize the usage of existing materials to conserve the natural resources.

There would not be a material financial implication of the said measures as energy costs comprise a very small portion of your company''s total expenses.

(B) Technology absorption:

I. The effort made towards technology absorption;

Over the years, your Company has brought into the country the best technology available in healthcare to serve the patients better and to bring healthcare of international standard within the reach of every individual.

In order to promote indigenous technology absorption, the following equipment, inter alia, has been installed at our various units;

a) Anesthesia workstation

b) Triple Dome OT lights

c) Electric OT table with 10 functions for renal transplant

d) Single door auto clave machine

e) Fabrilator Machine

f) Biosafety Cabinet for Chemotherapy

g) Anesthesia Trolley

h) Baby Cradle with infant Bed

i) Blood bank equipment including Deep freezer, Blood bank refrigerator, Platelet agitator/incubator, Blood collection monitor and tube sealer, Donor couch compofuge

j) X-ray system;

k) Dialysis machine;

l) Ventilator;

m) CT scanning machines;

n) MRI scanning machines;

o) Ultrasound systems; and

p) Linac systems.

The benefit accrued due to this is primarily cost reduction from import substitution considering the impact of exchange rate fluctuation and revision of customs duty tariffs. The performance and quality of these equipment have been found to be quite satisfactory.

II. The Company has / has not imported any equipment during the year under review. However, Company is using latest medical equipment/machinery in its hospital units.

Apart from above, various other small equipment imported from overseas have been installed at various units of Shalby.

III. The expenditure incurred on Research and Development

? 0.48 mn. expenditure made on clinical trial during the financial year 2023-24.

(C) Foreign exchange earnings and expenditure:

	2023-24	2022-23
Earnings in Foreign Currency	60.71	54.11
CIF Value of Imports	-	-

Expenses in Foreign Currency

- 1.34

PARTICULARS OF EMPLOYEES & REMUNERATION

The details regarding ratio of remuneration of each director to the median employee''s remuneration and other details as required in section 197(12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended herewith as Annexure - C.

The statement containing information as per provision of Section 197(12) read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in separate annexure forming part of this report. However, Annual Report is being sent without the said annexure. In terms of provisions of section 136 of the Act, the said annexure is open for inspection at the registered office of the Company during the office hours. Any member interested in obtaining the copy of the same may write to the Company Secretary at the Registered Office of the Company.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to 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 Company has in place adequate internal financial controls in order to ensure that the financial statements of the Company depict a true and fair position of the business of the Company. The Company continuously monitors and looks for possible gaps in its processes and it devices and adopts improved controls wherever necessary.

INSURANCE

The Company''s plants, properties, equipment and stocks are adequately insured against all major risks. The Company has also taken Directors'' and Officers'' Liability Insurance Policy to provide coverage against the liabilities arising on them.

RISK MANAGEMENT

The risks are measured, estimated and controlled with the objective to mitigate its adverse impact. Your company''s fundamental approach to risk management includes, anticipate, identify and measure the risk. Your company has in place a mechanism to monitor and mitigate various risks associated with the business. The Company has adopted a Risk Management Policy which inter alia, sets out our approach towards risk assessment, risk management and risk monitoring, which is periodically reviewed by the Board.

VIGIL MECHANISM

The Company has established a vigil mechanism and accordingly framed a Vigil Mechanism and Whistle Blower Policy. The policy enables the employees to report genuine concerns to the management regarding instances of unethical behavior, actual or suspected fraud or violation of Company''s Code of Conduct or mismanagement, if any. Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for strict confidentiality, adequate safeguards against victimization of Whistle Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in appropriate cases. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle blowers has been denied access to the Audit Committee of the Board pertaining to whistle blower policy. The said Vigil Mechanism and Whistle-Blower Policy is on the website of the Company.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of Section 135 of the Act, your Company has constituted a CSR Committee, which comprises of Mrs. Sujana Shah, Chairperson, Dr. Umesh Menon, Member and Mr. Shyamal Joshi as its members as on March 31,2024. The Company has also framed a Corporate Social Responsibility Policy in compliance with the provisions of the Act and is amended from time to time which is available on the website of the Company. The Annual Report on CSR activities outlining geographical areas for CSR activities, composition of CSR committee, amount of CSR fund expended etc. is annexed herewith as Annexure - D.

OTHER DISCLOSURES AND INFORMATION 1. Employee Stock Options

The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company''s objectives, and promoting increased participation by them in the growth of the Company.

Shalby Employee Stock Options Scheme-2021

The Company has introduced Employee Stock Option Scheme-2021 for benefit of eligible employees as approved by the Shareholders on December 3, 2021 vide Special Resolution passed through Postal Ballot.

The said scheme is implemented through Trust. During the year under review Company has granted stock options, the details of which are as under.

Opening	Options	Options	Options	Closing
balance of	Granted	Lapsed	Exercised	balance
Outstanding	during FY during FY during FY			of Active
Options as	2023-24	2023-24	2023-24	Options in
on April 1,				force as on
2023				March 31,
				2024
2,06,235	61,000	36,000	1,02,735	1,28,500

None of the employees has been granted Employee Stock Options exceeding 1% of the issued capital as on the date of grant during the year.

The details of the ESOP Scheme-2021, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are attached in Annexure - E.

2. Anti-sexual Harassment of Women at workplace

Your Company has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace under the provisions of Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act 2013 and rules framed thereunder. The Company has anti Sexual harassment Committee to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, no complaint has been received and there were no complaints pending at March 31, 2024.

3. Significant or Material Orders passed by the Authority

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its future operations.

AUDITORS

Statutory Auditors & Auditors'' Report

During the year under review, the Statutory Auditors, M/s. T. R. Chadha & Co., LLP, Chartered Accountants, Ahmedabad has been re-appointed for second term as approved by Shareholders in 19^thAnnual General Meeting held on August 14, 2023, for the period of 5 years from the conclusion of 19^th Annual General Meeting till conclusion of 24^th Annual General Meeting.

The Statutory Auditor''s comment on your company''s account for the year ended March 31,2024 are self-explanatory in nature and do not require any explanation. The Auditors Report does not Contain any qualification or adverse remarks.

Internal auditor

M/s. PricewaterhouseCoopers Services LLP, New Delhi is the Internal Auditors to conduct internal audit as per agreed scope of work pursuant to the provision of section 138 of the Act read with Companies (Accounts) Rules, 2014. Internal Auditors present their quarterly report in every meeting of Audit Committee.

Cost auditors

Pursuant to the provisions of Section 148 of the Act read with Companies (Audit and Auditors) Rules, 2014 and Companies (Cost Records and Audit) Rules, 2014, M/s. Borad Sanjay B & Associates, Ahmedabad has been appointed as Cost Auditors by the Board of Directors on the recommendation of Audit Committee, for audit of cost records for the year ended on March 31, 2024 and their remuneration was ratified by members at the 19^th Annual General meeting of the Company.

Your Company has received consent along with confirmation from M/s. Borad Sanjay B & Associates that the appointment is in accordance with the applicable provisions of the Act and Rules framed thereunder and they do not hold any disqualification under the provisions of the Act for their appointment for FY 2024-25. The Board of Directors of the Company reappointed M/s. Borad Sanjay B & Associates for audit of cost records for the year ended on March 31,2025 at a remuneration of ? 1,10,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred, if any, in connection with the cost audit. The Board of Directors of the Company recommended the members for their ratification. The Company has maintained cost account and records as specified by Central Government under Section 148(1) of the Act, read with Rule 8 of Companies (Accounts) Rule, 2014.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. Chintan I Patel & Associates, Practicing Company Secretaries, Ahmedabad (Mem No. F12315, PCS No. 20103) to conduct the Secretarial Audit of the Company for the year ended March 31, 2024. The Secretarial Audit Report for the FY 2023-24 is annexed to this Report as Annexure - F. The Company has appointed them to conduct Secretarial Audit for FY 2024-25.

As per the requirements of the Listing Regulations, Practicing Company Secretary of one material Indian subsidiary of the Company i.e. Mars Medical Devices Limited have undertaken secretarial audit for FY 2023-24. The said material Indian subsidiary of the Company has appointed M/s. Chintan I Patel & Associates, Practicing Company Secretaries, (Mem No. F12315, PCS No. 20103 to conduct the Secretarial Audit for FY 2024-25. The said Secretarial Audit Report confirms that the said material subsidiary has complied with the provisions of the Act, Rules, Regulations and Guidelines and that there were no deviations

or non-compliances. As required under Regulation 24A of the Listing Regulations, the said Secretarial Audit Report of said material unlisted subsidiary is attached herewith in Annexure - G.

There are no qualifications or reservations on adverse remarks or disclaimer in the said Secretarial Audit Report. Your Company has also obtained certificate from the secretarial auditor certifying that none of the directors of our Company has been debarred or disqualified from being continuing as directors of the Company by SEBI, Ministry of Corporate Affairs or such similar statutory authority. The said certificate has been annexed as Annexure - H to the Directors'' Report.

Report of Auditor(s) on instances of Fraud

During the year, none of the Auditors have reported any instances of fraud committed against your company by its officers or employees to the Audit Committee or to the Board, under Section 143(12) of the Act and therefore, no detail is required to be disclosed pursuant to provisions of the Act.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation for the whole hearted support and contribution made by all Doctors, nursing/paramedics, bankers, Government Authorities, auditors and shareholders during the year under review. Your Directors express their deep sense of appreciation and extend their sincere thanks to every employee at all level for their dedicated services and look forward their continued support.

CAUTIONARY STATEMENT

The Board''s Report and Management Discussion & Analysis may contain certain statements describing the Company''s objectives, expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company is not obliged to update any such forward looking statements. Some important factors that could influence the Company''s operations comprise economic developments, pricing and demand and supply conditions in global and domestic markets, changes in government regulations, tax laws, litigation and industrial relations.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

DR. VIKRAM I. SHAH

Date : May 28, 2024 Chairman & Managing Director

Place: Ahmedabad DIN : 00011653

Mar 31, 2023

The Directors are pleased to present the Nineteenth Annual Report on business and operations of the Company along with audited financial statements for the financial year ended March 31,2023.

financial performance summary

The summarized financial highlight is depicted below;

(Rs. in Million)
Particulars		Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from operations	7,080.17	6,467.95	8,049.21	6,989.45
Other Income	193.65	129.99	225.20	124.22
Total Expenditure (Except Finance cost & Depreciation/ Amortization)	5,658.60	5,171.46	6,681.78	5,790.13
Profit before Interest Depreciation and Tax	1,615.21	1,426.49	1,592.63	1,323.54
Finance Cost	31.01	27.90	91.32	59.01
Depreciation/Amortization	370.64	355.02	480.88	428.70
Exceptional Item	-	(44.37)	-	(44.37)
Profit Before Tax	1,213.56	999.20	1,020.43	791.46
Provision for Taxation (Inclusive of deferred tax)	405.48	301.15	343.66	251.75
Profit After Tax	808.08	698.06	676.77	539.71
Other comprehensive income	2.57	(2.94)	11.25	2.23
Total Comprehensive Income	810.65	695.12	688.02	541.93

performance of the company

During the year under review, the revenue from operations of the Company increased to '' 7,080.17 million as compared to '' 6,467.95 million in the previous year. The EBITDA for the year under review increased '' 1,615.21 to million against previous year of '' 1,426.49 million. Your Company has earned Profit after tax of '' 808.08 million as against '' 698.06 million in the previous year.

During the year under review, the consolidated revenue from operations increased to '' 8,049.21 million as compared to '' 6,989.45 million in the previous year. The consolidated EBITDA increased to ? 1,592.63 million from '' 1,323.54 million in the previous financial year.

dividend

The Board of Directors has recommended a dividend of '' 1.20 per equity share (i.e. 12%) of face value of '' 10/- each on the paid up share capital of the Company for financial year ended on March 31, 2023 aggregating to '' 129.61 million, which if declared, at the ensuing Annual General meeting scheduled on Monday,

August 14, 2023, will be paid to those shareholders whose names appear in the Register of members as at closing hours of business on Tuesday, August 8, 2023 (''cut-off date''). In respect of shares held in electronic form, the dividend will be paid on the basis of beneficial ownership furnished by both depositories, NSDL and CDSL for this purpose.

The Register of Members and Share Transfer Books will remain closed from Wednesday, August 9, 2023 to Monday, August 14, 2023 (both days inclusive).

dividend distribution policy

The Company has formulated a Dividend Distribution Policy which provides for the circumstances under which the members may / may not expect dividend, the financial parameters, internal and external factors, utilization of retained earnings, parameters regarding different classes of shares, etc. The provisions of this Policy are in line with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations'') and is amended from time to time.

transfer to reserves

The Board of Directors has not appropriated and transferred any amount out of profit to General Reserves and has decided to retain the entire amount in profit and Loss account.

business & strategy

Upcoming Projects

Nashik Project: The Company had entered into a definitive O&M agreement with Samruddhi Hospital Pvt Ltd (developer) in the year 2014 for a period of 30 years. Under this arrangement, the developer will construct the hospital building and hand over to your company for investing equipment and technology with an estimated capex of '' 310 million to manage the hospital thereto. The project delayed due to the novel Covid-19 pandemic spread across the globe. But we have noticed some progress now and estimated to receive the possession of constructed building during Fiscal 2024 to start the operation of the 146 bedded hospital.

Mumbai Project: The Company is in the process of setting up a State of Art facility with 175 bed capacity in the heart of Mumbai, Santacruz. Your company had entered into a long lease agreement with counterpart to manage the entire operations of hospital wherein the existing structure needs to be demolished completely and a new structure will be constructed with an estimated capex of '' 1,600 million. Due to ongoing novel Covid-19 pandemic spread across the globe, the project got delayed and now it is expected to start the operations by Fiscal 2026.

Franchise Business

Your company has rolled out a unique asset-light franchise business model under Shalby Orthopedics Centre Of Excellence (SOCE) brand by leveraging it Orthopedic expertise of more than 29 years. In this process, your company has designed two operational models called Franchise owned Shalby Operated (FOSO), and Franchise owned Shalby Managed (FOSM). So far, we have operationalised 4 franchise units at Udaipur (FOSM), Lucknow (FOSO), Gwalior (FOSM) and rebranded Vijay unit (Ahmedabad) as SOCE. In addition to that we have signed one more MOU at Rajkot location. With all key strategies, the right people and leadership in place, we remain on course to capitalize our expertise and excellence in Orthopedics and aim to have over 50 SOCEs across India within the next 3-4 years.

Implant Business

Your company felt proud to establish its presence in USA after ventured into implant (Knee & Hip) manufacturing business by accomplishing implant asset acquisition of Consensus Orthopedics, headquartered in California and incorporated Shalby Advanced Technologies Inc. (SAT) in the first quarter of Fiscal 2022. By acquiring the entire manufacturing assets

which includes plant, equipment, patents and inventories, we also inherited a legacy of Zero product recall in the US market. Moreover, this acquisition became a milestone in the history of your company which enabled Shalby not only backward integration in Orthopedics but also diversifying its revenue from hospital service business.

During the last financial year, our implant business has achieved many milestones. Our Implant business sales is multi folded in FY 2023 to INR 94 crore, majorly driven by adding more distributors and surgeons in the existing USA market, and inhouse consumption of implants in our hospitals in India. Our continuous efforts in R&D resulted into launching a new product called TUKS, under a new product line of Uni Knee systems, in the US and Indian Market both. We have received an overwhelming response from our surgeons for this product and with unique design and quality, we aspire to gain a sizable market of Uni knee systems in the US. We have built a strong team to create the strong pillars for implant business in India and to serve the surgeons and hospitals. We are very happy to announce that we have obtained the licence to sell our implants in the Indonesian market in the month of February 2023. This accomplishment has opened our door in the South-East Asian Market, in line with our future business roadmap.

Over the last two years, we have scaled up the production levels to 4500 components per month from 300 components when we started. We have also brought certain cost efficiencies supported by minimising ordering cost, negotiating with suppliers, streamlining manufacturing process and continuous improvisation in supply-chain practices. These cost competencies helped us to achieve the operating profit in Q4 FY 2022-23. and we expect this to continue in coming quarters.

As we mentioned last year, we built a strong team at leadership roles with the right mindset of people and would continue to add and nurture best talent to support the growth of the organisation. Your company is committed to establish a strong footprint into the vast opportunity that exists in the world''s largest implant market like USA and gradually to enter other South Asian Countries like Nepal and Bangladesh and other South-East Asian countries like Malaysia, Vietnam, and Philippines & later Middle East and East African Countries in an organic and phased manner.

These 3 well diversified businesses come together to create a strong ecosystem to carry forward the strong Shalby Legacy of world-class Orthocare for the Indian population.

credit rating

During the year under review, ICRA Limited has reaffirmed the long term credit ratings as ICRA A (Stable) on term loans and

fund based facilities availed by the Company and the outlook on the long term rating is "Stable". This rating indicates adequate degree of safety regarding timely servicing of financial obligations and low credit risk.

share capital

During the year under review, there is no change in the share capital of the Company. The authorized share capital of the Company stands at '' 1,177.50 million divided into 117,750,000 equity shares of '' 10 each. The issued, subscribed & paid up share capital of the Company stands at '' 1,080.10 million divided into 108,009,770 equity shares of '' 10 each.

subsidiaries and associate companies

As on March 31, 2023, your Company has eight subsidiaries viz. Vrundavan Shalby Hospitals Limited, Shalby International Limited, Yogeshwar Healthcare Limited, Slaney Healthcare Pvt. Ltd., Shalby (Kenya) Limited, Mars Medical Devices Limited, Shalby Hospitals Mumbai Pvt. Ltd. and Griffin Mediquip LLP.

Mars Medical Devices Limited has further two subsidiaries, namely Shalby Advanced Technologies, Inc. at Delaware, USA for manufacturing and supply of orthopaedic implant, instruments, knee systems and hip systems for which company has acquired assets from Consensus Orthopaedics, California, USA and the second one is Shalby Global Technologies Pte Ltd. in Singapore, which are into trading business of said implants and other medical devices. Both these companies are step-down subsidiaries of Shalby Limited.

As per Reg. 16 of the Listing Regulations, Mars Medical Devices Limited (unlisted wholly-owned Indian subsidiary) and Shalby Advanced Technologies Inc, USA (step-down foreign subsidiary) have became material subsidiary companies during the year under review. However, none of the subsidiaries is a significant material subsidiary.

Act, the audited financial statements, including consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available at Investors Section under Annual Report tab at https://www.shalby. org/. The financial statements of the Company and subsidiary companies will be available for inspection by any shareholder(s) during working hours at the Company''s corporate office and that of the respective subsidiary companies concerned.

awards & recognitions

During the financial year 2022-23, your company has been conferred with the following awards / accolades:

1. Best Medical Tourism Centre in Gujarat at Tourism Awards 2022 (Supported by Gujarat Tourism) Shalby Hospital Ahmedabad

2. Best Multispecialty Hospitals Chain by Eminent Research

3. ASSOCHAM Best Hospital for Patient Safety & Care - Group of Hospitals (Runner-up)

4. The Economic Times Best Orthopedic Hospital, National

5. Featured in the List of Top Leading Hospitals of India by Medgate Today Magazine for Orthopedic Category

6. AHPI Patient Centric Hospital, for Shalby Hospital Surat

7. Excellence in Arthroscopy & Sports Medicine by First India News at Health First Conclave & Awards for Shalby Hospital Jaipur

8. Excellence in Internal Medicine & Critical Care by First India News at Health First Conclave & Awards for Shalby Hospital Jaipur

9. Rajasthan Health Icons for Cardiac Sciences by The Times of India for Shalby Hospital Jaipur

10. Rajasthan Health Icons for Neuro Sciences by The Times of India for Shalby Hospital Jaipur

11. Awarded at News 18 Rajasthan Lifeline Conclave for Shalby Hospital Jaipur

12. Awarded as The Best Hospital in MP at News 24 MPCG News Health Conclave Shalby Hospital Indore

13. Lifeline Thank You Doctor Award by News 18 MPCG News for Shalby Hospital Indore

14. Business & Beyond Award by The Times of India for Shalby Hospital Mohali

15. Swachh Sarvekshan Award in Hospital Category by Jabalpur Municipal Corporation for Shalby Hospital Jabalpur

annual return (mgt-7)

Pursuant to section 92(3) read with section 134(3)(a) of the Act, the draft Annual return of the Company as on March 31, 2023 is available on the Company''s website.

particulars of loans, guarantees or

investments U/S 186 OF THE COMPANIES ACT, 2013

Particulars of loans given, investments made, guarantees given and securities provided in the notes to the standalone financial statements forming part of this annual report.

particulars of contracts or arrangement with related party U/S 188 OF THE COMPANIES ACT, 2013

During the year under review, there was no material transactions carried out with any of the related parties in terms of regulation 23 of the Listing Regulations. The details of the related party transactions are provided in the Annexure- B (AOC - 2) pursuant to Section 134(3)(h) of the Act read with rule 8(2) of The Companies (Accounts) Rules, 2014. Your Company has formulated a policy on ''Related Party Transactions'' which are in line with Listing Regulations and is amended from time to time.

Your directors draw the attention of members to the notes to the financial statements which set out related party disclosures.

directors and key managerial personnel

As on March 31,2023, your Company''s board had eight members comprising of one executive director, three non-executive directors and four independent directors (including one woman independent director).

The details of Board and Committee composition, tenure of Directors, areas of expertise and other details are available in the Corporate Governance Report, which forms part of this Annual Report.

During the financial year 2022-23, the appointment of Mr. Vijay Kedia as a Non-Executive Director has been approved by the Shareholders through postal ballot on December 10, 2022.

Mrs. Sujana Shah, Independent Director, has been appointed for second term w.e.f. May 07, 2023 for a period of 5 years and the members have approved the resolution through Postal Ballot on December 10, 2022.

In terms of section 152 of the Act, Mr. Sushobhan Dasgupta (DIN: 06381955), being the longest in the office shall retire at the ensuing Annual General Meeting and being eligible for reappointment, offers himself for reappointment.

In the opinion of the Board, Mr. Ashok Bhatia (DIN: 02090239) and Mr. Vijay Kedia (DIN: 0230480), both Non-Executive Directors possess the requisite expertise, integrity and experience (including proficiency) for appointment as an Independent Director of the Company and as recommended by the Nomination and Remuneration Committee, the Board of Directors at its meeting held on May 18, 2023 have appointed them as Independent Director for their respective first term of five years, subject to approval of the members of the Company.

A brief resume of Director being appointed / reappointed at this AGM along with the nature of expertise, shareholding in the Company and other details as stipulated under Regulation 36(3) of the Listing Regulations and Secretarial Standard on general meeting (SS-2) is appended as an annexure to the Notice of the ensuing Annual General Meeting.

As on March 31, 2023, Dr. Vikram Shah, Chairman & Managing Director, Mr. Venkat Parasuraman, Chief Financial Officer and Mr. Tushar Shah, Associate Vice President and Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Act.

Due to resignation of Mr. Venkat Parasuraman, Chief Financial Officer and Key Managerial Personnel of the Company effective from May 18, 2023, the Board of Directors on the recommendation of Nomination and Remuneration Committee & Audit Committee, has appointed Mr. Amit Pathak as the Chief Financial Officer (CFO) and Key Managerial Personnel of the Company w.e.f. May 19, 2023.

declaration by independent directors

Director during the year. They have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair their ability to discharge their duties with an objective independent judgment and without any external influence.

board meetings

The Board met four times during the year under review, on May 25, 2022, July 26, 2022, October 18, 2022 and January 17, 2023. The numbers of meetings and its attendance have been provided in the Report on Corporate Governance which forms part of Annual Report.

committees

The Company has various committees which have been formed in compliance of provisions of the Act and the Listing Regulations and are in compliance with the provisions of relevant statutes.

The Board has constituted following committees.

i. Audit Committee

ii. Risk Management Committee.

iii. Stakeholder Relationship Committee

iv. Nomination and Remuneration Committee

v. Corporate Social Responsibility Committee

vi. Management Committee

compliance with secretarial standards

The Board of Directors affirms that the Company has complied with the all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

material changes and commitments affecting financial position between the end of the financial year and date of the report

policy on appointment and remuneration to directors, kmp & senior management personnel

Company''s policy on Directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act has been

disclosed briefly in the Corporate Governance Report, which forms part of this Annual Report. Your Company''s Policy on remuneration for the Directors, Key Managerial Personnel and other employees and Company''s policy in this regard includes, inter-alia, criteria for determining qualifications, positive attributes, independence of a director and other matters as required under sub-section (3) of Section 178 of the Act and is amended from time to time.

corporate governance and management discussion and analysis report

Your Company upholds the standards of governance and is compliant with the provisions of Corporate Governance as stipulated under the Listing Regulations. The Report on Corporate Governance for FY 2022-23, as per Regulation 34(3) read with Schedule V of the Listing Regulations forms a part of this Annual Report. The Certificate from Practicing Company Secretary confirming the compliance with the conditions of corporate governance as stipulated by Regulation 34(3) of the Listing Regulations is annexed to this Report.

In compliance with Corporate Governance requirements as per the Listing Regulations, your Company has formulated and implemented a Code of Conduct for all Board Members and Senior Management Personnel of the Company, who have affirmed the compliance thereto.

business responsibility and sustainability report

performance evaluation of board and its committee

The criteria for performance evaluation and the statement indicating the manner in which formal annual evaluation has

been made by the Board are given in the ''Report on Corporate Governance'', which forms part of this Annual Report.

deposits

directors'' responsibility statement

Pursuant to section 134 (5) of the Act, your Directors hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards read with requirement set out under Schedule III to the Act have been followed and there are no material departures from the same;

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

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

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

conservation of energy, technology absorption and foreign exchange earnings and outgo

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under The

Companies (Accounts) Rules, 2014 is set out below;

(A) Conservation oF Energy:

The operations of the Company are not energy-intensive.

However, the following significant measures are being

taken to reduce the energy consumption by using energy

efficient equipment.

â¢ Use of LED lights

â¢ Occupancy sensors installation in toilets to avoid permanent illumination and save electrical consumption

â¢ Proper thermal insulation to increase efficiency of HVAC system and thereby reducing energy consumption

â¢ use windows and doors to provide good levels of natural ventilation in some areas within a hospital, allowing mechanical ventilation to be switched off or turned down to save energy

â¢ Provide infrared controllers in water taps as they provide water only when required otherwise they switch off automatically and can save between 5% and 15% of water per tap per year

â¢ Introduction of timer based operation of air handling units to reduce power consumption

â¢ Energy optimization practices implemented in transformer operation

â¢ VFD installation for AHU motor in a phased manner

â¢ All lifts and OT AHUs are operated with VFD panels

â¢ For recently commissioned units, building orientation has been so designed that helps to maximize use of Day Light and to reduce heat gain in order to reduce energy consumption.

â¢ Rain water harvesting system installed at our greenfield recently completed projects to conserve natural resources

â¢ HVAC temperature is being adjusted based on the seasonal temperature and particular clinical requirements, to reduce the power consumption.

â¢ In case of modification or renovation, we maximize the usage of existing materials to conserve the natural resources.

There would not be a material financial implication of the said measures as energy costs comprise a very small portion of your company''s total expenses.

(B) Technology absorption:

I. The effort made towards technology absorption;

In order to promote indigenous technology absorption, the following equipment, inter alia, has been installed at our various units;

a) Anesthesia workstation

b) Triple Dome OT lights

c) Electric OT table with 10 functions for renal transplant

d) Single door auto clave machine

e) Fabrilator Machine

f) Biosafety Cabinet for Chemotherapy

g) Anesthesia Trolley

h) Baby Cradle with infant Bed

i) Blood bank equipment including Deep freezer, Blood bank refrigerator, Platelet agitator/incubator, Blood collection monitor and tube sealer, Donor couch compofuge

j) X-ray system;

k) Dialysis machine;

l) Ventilator;

m) CT scanning machines;

n) MRI scanning machines;

o) Ultrasound systems; and

p) Linac systems.

II. The Company has not imported any equipment during the year under review. However, Company is using latest medical equipment/machinery in its hospital units.

Apart from above, various other small equipment imported from overseas have been installed at various units of Shalby.

III. The expenditure incurred on Research and Development

'' 0.88 mn. expenditure made on clinical trial during the financial year 2022-23.

(C) Foreign exchange earnings and expenditure:

('' in million)
Particulars	2022-23	2021-22
Earnings in Foreign Currency	54.11	42.56
CIF Value of Imports	-	-
Expenses in Foreign Currency	1.34	-

particulars of employees & remuneration

internal financial control and its adequacy

in place adequate internal financial controls in order to ensure that the financial statements of the Company depict a true and fair position of the business of the Company. The Company continuously monitors and looks for possible gaps in its processes and it devices and adopts improved controls wherever necessary.

insurance

risk management

vigil mechanism

corporate social responsibility

In accordance with the requirements of Section 135 of the Act, your Company has constituted a CSR Committee, which comprises of Mrs. Sujana Shah, Chairperson, Dr. Umesh Menon, Member and Mr. Shyamal Joshi as its members as on March 31, 2023. The Company has also framed a Corporate Social Responsibility Policy in compliance with the provisions of the Act and is amended from time to time. The Annual Report on CSR activities outlining geographical areas for CSR activities, composition of CSR committee, amount of CSR fund expended etc. is annexed herewith as Annexure - D.

other disclosures and information

1. Employee STocK OpTioNS

ShaLbY Employee STocK OpTioNS ScHeme-2021

The Company has introduced Employee Stock Option Scheme-2021 as approved by the Shareholders on December 3, 2021 vide Special Resolution passed through Postal Ballot.

Pursuant to approval by the shareholders the Nomination and Remuneration Committee has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and of its subsidiaries under the said scheme. The maximum number of shares under the 2019 Plan shall not exceed 1,000,250 equity shares. To implement the said scheme, Shalby Limited Employees Welfare Trust, has acquired 700,000 equity shares through secondary acquisition.

During the year under review Company has granted stock options, the details of which are as under.

OpEning	opTions	opTions opTions	Closing
balancE of	GrantEd	LapsEd ExErcisEd	balancE of
Options as during FY during FY during FY Option in forcE
on April 1, 2022	2022-23	2022-23 2022-23	as on March 31, 2023
0	2,39,235	33,000 Nil*	2,06,235
*None of the Options have been vested as on March 31,2023

None of the employees has been granted Employee Stock Options exceeding 1% of the issued capital as on the date of grant during the year.

2. ANTi-SEXuaL HarassMENT of Women aT workpLacE

regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, no complaint has been received and there were no complaints pending at March 31,2023.

3. Significant or Material Orders passed by the Authority

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its future operations.

auditors

Statutory Auditors & Auditors'' Report

Pursuant to Section 139 of the Act, the first term of Statutory Auditors, M/s. T. R. Chadha & Co., LLP, Chartered Accountants, Ahmedabad is getting expired on conclusion of forthcoming Annual General Meeting. The Board of Directors, upon receipt of consent and eligibility certificate from said auditors and on recommendation of Audit Committee, have appointed them as Statutory Auditors to hold the office from the conclusion of forthcoming 19^th Annual General Meeting till conclusion of 24^thAnnual General Meeting, subject to approval of members.

The said Statutory auditors have confirmed that they have not incurred any of the disqualification as mentioned in section 141(3) of the Act and the Rules framed thereunder.

The Statutory Auditor''s comment on your company''s account for the year ended March 31,2023 are self-explanatory in nature and do not require any explanation. The Auditors Report does not contain any qualification or adverse remarks.

Internal auditor

Cost auditors

Pursuant to the provisions of Section 148 of the Act read with Companies (Audit and Auditors) Rules, 2014 and Companies (Cost Records and Audit) Rules, 2014, M/s. Borad Sanjay B & Associates, Ahmedabad has been appointed as Cost Auditors by the Board of Directors on the recommendation of Audit Committee, for audit of cost records for the year ended on March 31, 2023 and their remuneration was ratified by members at the 18^th Annual General meeting of the Company.

Your Company has received consent along with confirmation from M/s. Borad Sanjay B & Associates that the appointment is in accordance with the applicable provisions of the Act and Rules framed thereunder and they do not hold any disqualification under the provisions of the Act for their appointment for FY 2023-24. The Board of Directors of the Company reappointed M/s. Borad Sanjay B & Associates for audit of cost records for the year ended on March 31,2024 at a remuneration of '' 1,10,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred, if any, in connection with the cost audit. The Board of Directors of the Company recommended the members for their ratification. The Company has maintained cost account and records as specified by Central Government under Section 148(1) of the Act, read with Rule 8 of Companies (Accounts) Rule, 2014.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. Chintan I Patel & Associates, Practicing Company Secretaries, Ahmedabad (Mem No. F12315, PCS No. 20103) to conduct the Secretarial Audit of the Company for the year ended March 31, 2023. The Secretarial Audit Report for the FY 2022-23 is annexed to this Report as Annexure - F.

As per the requirements of the Listing Regulations, Practicing Company Secretary of one material Indian subsidiary of the Company have undertaken secretarial audit for FY 2022-23. The said material Indian subsidiary of the Company has appointed M/s. Chintan I Patel & Associates, Practicing Company Secretaries, (Mem No. F12315, PCS No. 20103 to conduct the Secretarial Audit. The said Secretarial Audit Report confirms that the said material subsidiary has complied with the provisions of the Act, Rules, Regulations and Guidelines and that there were no deviations or non-compliances. As required under Regulation 24A of the Listing Regulations, the said Secretarial Audit Report of said material unlisted subsidiary is attached herewith in Annexure - G.

Reporting of Fraud by Auditor(s)

During the year, none of the Auditors have reported any instances of fraud committed against your company by its officers or

employees to the Audit Committee or to the Board, under Section 143(12) of the Act and therefore, no detail is required to be disclosed pursuant to provisions of the Act.

acknowledgements

cautionary statement

The Board''s Report and Management Discussion & Analysis may contain certain statements describing the Company''s objectives, expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company is not obliged to update any such forwardlooking statements. Some important factors that could influence the Company''s operations comprise economic developments, pricing and demand and supply conditions in global and domestic markets, changes in government regulations, tax laws, litigation and industrial relations.

Mar 31, 2018

Dear Members,

The Directors have immense pleasure in presenting the Fourteenth Annual Report on business and operations of the Company and audited financial statements for the financial year ended March 31, 2018.

FINANCIAL & OPERATIONAL PERFORMANCE

[Rs. in million]

Particulars	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Income from Healthcare services	3855.23	3223.86	3832.31	3237.66
Other Income	87.12	60.43	90.93	67.45
Total Expenditure	3357.34	2764.09	3350.50	2800.14
Profit before Interest Depreciation and Tax	930.67	782.43	924.87	778.01
Finance Cost	121.34	102.15	123.56	106.02
Depreciation/Amortization	224.32	160.08	228.57	167.02
Profit Before Tax	585.01	520.20	572.74	504.97
Provision for Taxation (Inclusive of provision for deferred tax)	144.86	216.58	145.59	217.95
Profit After Tax	440.15	303.62	427.15	287.02
Other comprehensive income	2.74	(2.34)	2.81	(2.40)
Total Comprehensive income	442.89	301.28	429.96	284.62
Surplus brought forward	1700.05	1404.10	1619.48	1330.28
Transfer to Capital Redemption Reserve	-	5.33	-	5.33
Balance carried to Balance Sheet	2142.94	1700.05	1995.72	1619.48

During the year under review, the income from healthcare services of the Company increased to Rs.3855.23 million as compared to Rs.3223.87 million in the previous year, registering a growth of 19.58%. Your Company has earned Profit after tax of Rs.440.15 million against Rs.303.62 million in the previous year registering a growth of 44.97%. The Company has carried net surplus of Rs.2142.94 million to the next year.

During the year under review, the consolidated income from healthcare services increased to Rs.3832.31 million as compared to Rs.3237.66 million in the previous year, registering a growth of 18.37%. The consolidated EBITDA exhibited a growth in of 18.88% in Fiscal 2018 rising to Rs.924.87 million from Rs.778.01 million in the previous financial year. The financial performance of the established units and gradual ramp up in the performance of the recently commissioned units are expected to drive up the EBITDA and EBITDA margin in the current financial year.

Consolidated Profit Margins:

Profit before tax (PBT) for Fiscal 2018 increased to Rs.572.74 million as compared to Rs.504.97 million in the previous year, registering a growth of 13.42%. Profit after tax (PAT) grew by 48.82% to Rs.427.15 million from Rs.287.02 million in the previous year. PAT margin improved to 10.89% in Fiscal 2018 as compared to 8.68% in the previous year.

Consolidated Earnings per Share:

The EPS of the Company decreased from Rs.3.40 in the previous year to Rs.2.85 in Fiscal 2018 due to addition of 19.354 million new shares issued under Initial Public Offer.

INDIAN ACCOUNTING STANDARDS (âInd ASâ)

In accordance with applicability of Indian Accounting Standards, the standalone and consolidated financial statements of the Company for the financial year ended on March 31, 2018 have been prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 & 2016 as applicable. The date of transition to Ind AS is April 1, 2016 and comparative figures in the Balance sheet as at March 31, 2017 and April 1, 2016 and statement of Profit and Loss and cash flow statement for the year ended March 31, 2017 have been restated accordingly. The reconciliations and descriptions of the effect of the transition from previous GAAP and Ind AS have been prepared and provided in the notes to the accounts to the standalone and consolidated financial statements. The detailed notes as to âBasis of Preparationâ have been provided in the notes to the accounts to the standalone and consolidated financial statements.

DIVIDEND

With a view to conserve resources and expansion of business, your directors do not recommend any dividend for the financial year under review.

INITIAL PUBLIC OFFER AND LISTING OF SHARES

The Directors are pleased to inform you that the Companyâs Initial Public offering of 20,354,838 equity shares of Rs.10 each at price of Rs.248 per equity share (including premium of Rs.238 per share) comprising of fresh issue of 19,354,838 equity shares amounting to Rs.4800 million and offer for sale of 1,000,000 equity shares amounting to Rs.248 million aggregating to Rs.5048 million by way of Book Building process received overwhelming response from the investors. The issue was opened on December 5, 2017 and closed on December 7, 2017 and it was overall oversubscribed by 2.87 times excluding anchor portion. under the said IPO, Company has allotted 19,354,838 equity shares of Rs.10 each at a premium of Rs.238 per share aggregating to Rs.4800 million on December 13, 2017. The trading of Equity shares of the Company commenced on National Stock Exchange Limited and BSE Limited effective from December 15, 2017 and consequently the Company has become a listed entity

UTILIZATION OF IPO PROCEEDS

Your Company has appointed HDFC Bank Limited as Monitoring agency in terms of regulation 16 of SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2009 as amended, to monitor the utilization of IPO proceeds and Company has obtained monitoring reports from the Monitoring agency from time to time and filed the same with both exchanges where equity shares of the Company are listed. The proceeds realized by the Company from the initial Public offering shall be utilized as per objects of the offer as disclosed in the Prospectus of the Company. Out of the IPO proceeds of Rs.4800 million, your Company has utilized Rs.3573.91 million as per objects of the offer and unutilized amount of Rs.990.37 million has been invested in the fixed deposits with the Bank and Rs.3.19 million were lying in escrow accounts of the Company. The proceeds of the issue were mainly utilized for repayment or prepayment in full, or in part of certain loans availed by our Company, purchase of medical equipment for existing, recently set up and upcoming hospitals, purchase of interiors, furniture, and allied infrastructure for upcoming hospitals and General corporate purposes. There has been no deviation in the utilization of the IPO proceeds of the Company. The Monitoring reportsâ are available at Announcement section of https://www. shalby.org/investors.

SHARE CAPITAL

Authorized Capital

During the year under review, the authorized share capital of the Company was increased from Rs.1,112.50 million to Rs.1,177.50 million divided into 117,750,000 equity shares of Rs.10 each consequent upon the implementation of composite scheme of arrangement for spin off of the hospital division of Kamesh Bhargava Hospital and Research Centre Private Limited (âTransferor Companyâ) and transfer to Shalby Limited (âTransferee Companyâ) as approved by National Company Law Tribunal, Chandigarh bench vide its order dated July 13, 2017.

Issued, Subscribed and Paid-up Capital

The Issued, Subscribed and Paid-up share capital of the Company was increased from Rs.886.55 million to Rs.1080.10 million consequent to the allotment of equity shares in Initial Public Offer. The Company has not issued any shares with differential rights as to dividend, voting or otherwise.

During the year under review, your company has also issued 12,46,000 equity shares on a preferential basis pre-IPO to employees, doctors, associate persons and Shalby Medicos Trust formed for the benefit and welfare of doctors of the Company.

COMPOSITE SCHEME OF ARRANGEMENT

The Board of Directors of your Company, approved a composite scheme of arrangement under Section 391 to 394 of the Companies Act, 1956 (âSchemeâ), for spin off of the hospital division of Kamesh Bhargava Hospital and Research Centre Private Limited (âTransferor Companyâ) and transfer to Shalby Limited (âTransferee Companyâ) subject to requisite approvals from the High Court of Punjab and Haryana and the High Court of Gujarat respectively, under whose jurisdiction the registered offices of both companies are situated, and for orders thereof for carrying this Scheme into effect. The Honâble High Court of Gujarat approved the Scheme by its order dated September 30, 2016, subject to the approval of scheme by Honâble High court of Punjab and Haryana. In light of the merger related provisions being notified under the provisions of the Companies Act, 2013, the Scheme was transferred from the High Court of Punjab and Haryana to the National Company Law Tribunal, Chandigarh Bench (âNCLTâ) and NCLT, Chandigarh Bench finally approved the said Scheme by its order dated July 13, 2017. The scheme became effective when the Company filed the certified true copy of the order of NCLT with the office of Registrar of Companies, Gujarat on August 12, 2017. The appointed date for the scheme was September 7, 2015 as defined in the scheme. Upon the scheme become effective with effect from the appointed date, our Company has recorded the assets and liabilities of hospital division of transferor Company and resultantly goodwill of Rs.81.97 million was created and recorded in the books of the Company.

CONSOLIDATED FINANCIAL STATEMENTS AND REPORT ON PERFORMANCE OF SUBSIDIRIES

Your Company has four subsidiary companies viz. Vrundavan Shalby Hospitals Limited, Shalby (Kenya) Limited, Shalby International Limited (earlier known as Shalby Pune Limited) and Yogeshwar Healthcare Limited. In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements form part of this Annual Report which shall also be laid before the ensuing Annual General Meeting of the Company. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Consolidated Financial Statements for the financial year ended March 31, 2018 are the Companyâs first Ind-AS compliant annual Consolidated Financial Statements with comparative figures for the year ended March 31, 2017 which is also as per Ind-AS. The date of said transition is April 1, 2017. A report on the performance and financial position of each of the subsidiaries and associate companies as per the Companies Act, 2013 is provided as Annexure A which forms part of this Report. The financial statements of the Company and subsidiary companies shall be available for inspection by any shareholder(s) during working hours at the Companyâs registered office and that of the respective subsidiary companies concerned. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available at Annual Reports section of https://www.shalby.org/investors.

During the year under review, your Company has acquired remaining 45% equity shares of Vrundavan Shalby Hospitals Limited in August, 2017 and consequent upon the said acquisition, the said Company became the wholly owned subsidiary of the Company.

AWARDS & RECOGNITIONS

Your Company received the âBest Medical Tourism Centreâ award at the Gujarat Tourism Awards 2016. In June 2017, our CMD Dr. Vikram Shah has been conferred on with the Double Helical National Health Award 2017 for his outstanding record in Knee Replacement Surgery with his innovative â0 Techniqueâ. In June 2017, Shalby was conferred on with the âBest CSR Initiative in Healthcareâ award at the 7th Healthcare Leaders Forum, New Delhi. Dr. Vikram Shah has been further conferred on with âTimes Man of the Yearâ award by Times of India group in the current year for his outstanding contribution in the field of orthopedics on completion of 1,00,000 joint replacement surgeries. Dr. Vikram Shah and Dr. Darshini Shah have been conferred on with âluminary awardâ by Divya Bhaskar group for their contribution in the field of orthopedics and Dental implantology, respectively.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 read with Companies Amendment Act, 2017, the extract of Annual Return is enclosed as Annexure - B (MGT-9) to this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186 OF THE COMPANIES ACT, 2013

Particulars of loans given, investments made, guarantees given and securities provided in the notes to the standalone financial statements forming part of this annual report.

PARTICULARS OF CONTRACTS OR ARRANGEMENT With RELATED PARTY U/S 188 OF The COMPANIES ACT, 2013

Most of the related party transactions that were entered into during the financial year were on armâs length basis, however, few transactions were not at armâs length basis and your Company has, accordingly taken approval of audit committee, Board of Directors and shareholders whenever applicable. Pursuant to Regulation 23 of the Listing Regulations, all related party transactions were placed before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions for their review and approval.

During the year under review, there were no material transactions with related parties except with Griffin Mediquip LLP, in terms of regulation 23 of SEBI Listing Regulations. The details of the related party transactions including material are provided in the Annexure - C (AOC - 2) pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014. Your directors draw the attention of members to the notes to the financial statements which set out related party disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT AND RESIGNATION

During the year under review, Dr. Dheeraj Sharma [DIN: 07683375], Non-Executive Independent Director resigned from the Board of Directors of the Company with effect from October 13, 2017. The Board, upon recommendation by Nomination and remuneration Committee and subject to the approval of members, appointed Mr. Ashok Bhatia (DIN: 02090239), as an Additional Director in the category of Independent Director of the Company through circular resolution with effect from October 23, 2017 for a period of 5 years. He holds the office upto the date of this Annual General meeting. Mr. Bhatia is having rich and varied experience in the field of healthcare and therefore Board of Directors at its meeting held on May 7, 2018 have decided to utilize his expertise in business development of the Company and accordingly Mr. Bhatia is redesignated as Non-Executive Non-Independent Director Subsequent to the closure of financial year under review, Dr. Darshini Shah [DIN: 00013903], Non-Executive Director resigned from the Board of Directors of the Company with effect from May 7, 2018. The Board, upon recommendation by Nomination and remuneration Committee and subject to the approval of members, appointed Mrs. Sujana Shah as an Additional Director in the category of Non-Executive Independent Director for a period of 5 years with effect from May 7, 2018, who holds the office upto the date of this Annual General meeting.

Requisite proposal seeking your approval for appointment of Mr. Ashok Bhatia as a Non-Executive Director with effect from May 7, 2018 and Mrs. Sujana Shah as Non-Executive Independent Director form part of the Notice convening 14th Annual General Meeting of the Company.

As on March 31, 2018, Dr. Vikram Shah, Chairman & Managing Director, Mr. Ravi Bhandari, Chief Executive Officer, Mr. Shantilal Kothari, Chief Financial Officer and Mr. Jayesh Patel, Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013. There is no change in Key Managerial Personnel during the year under review.

DIRECTORS RETIRING BY ROTATION

In terms of section 152 of the Companies Act, 2013, Mr. Shyamal Joshi, (DIN: 00005766), being the longest in the office shall retire at the ensuing Annual General Meeting and being eligible for reappointment, offers himself for re-appointment.

A brief resume of Directors being appointed / re-appointed along with the nature of their expertise, their shareholding in the Company and other details as stipulated under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as an annexure to the Notice of the ensuing Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and under Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

BOARD MEETINGS

The Board met 4 times during the year under review, June 28, 2017, September 28, 2017, December 28, 2017 and January 9, 2018. The number of meetings and its attendance have been provided in the Report of Corporate Governance.

COMMITTEES

The Company has various committees which have been formed in compliance of provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are in compliance with the provisions of relevant statutes.

The Board has constituted following committees.

i. Audit and Risk Management Committee

ii. Stakeholder Relationship Committee

iii. Nomination and Remuneration Committee

iv. Corporate Social Responsibility Committee

v. Management Committee

vi. IPO Committee

The details with respect to the compositions, powers, roles, terms of reference, numbers of committees along with their attendance etc. of respective Committees are provided in detail in the âReport on Corporate Governanceâ which forms part of this Annual Report.

POLICY ON APPOINTMENT AND REMUNERATION TO DIRECTORS, KMP & SENIOR MANAGEMENT PERSONNEL

Companyâs policy on Directorsâ appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed briefly in the Corporate Governance Report, which forms part of this Report. Your Companyâs Policy on remuneration for the Directorsâ, Key Managerial Personnel and other employees and Companyâs policy on Directorsâ appointment 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 at Company Policies and Codes section of https://www. shalby.org/wp-content/uploads/2017/12/Nomination-and-Remuneration-Policy.pdf. There has been no change in the policy since last financial year.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Company upholds the standards of governance and is compliant with the provisions of Corporate Governance as stipulated under SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015. The Report on Corporate Governance for FY 2017-18, as per Regulation 34(3) read with Schedule V of the SEBI (LODR), Regulations, 2015 forms a part of this Annual Report. The Certificate from Practicing Company Secretary confirming the compliance with the conditions of corporate governance as stipulated by Regulation 34(3) of SEBI (LODR), Regulations, 2015 is annexed to this Report.

In compliance with Corporate Governance requirements as per the SEBI Listing Regulations, your Company has formulated and implemented a Code of Conduct for all Board members and senior management personnel of the Company, who have affirmed the compliance thereto and the same is available at https://www. shalby.org/wp-content/uploads/2017/10/Code-of-Conduct-for-Directors-Senior-Management.pdf

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 and CEO/ CFO Certificates thereto, are presented in separate section which forms part of the Annual Report.

PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEE

The criteria for performance evaluation and the statement indicating the manner in which formal annual evaluation has been made by the Board are given in the âReport on Corporate Governanceâ, which forms part of this Annual Report.

Pursuant to provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, Board committees and individual directors in the manner prescribed in Performance Evaluation Policy, which is available at https:// www.shalby.org/wp-content/uploads/2017/10/Performance-Evaluation-Policy-for-BOD.pdf

DEPOSITS

During the year, the Company has not accepted any fixed deposits from the public as per provisions of section 73 to 76 of the Companies Act, 2013 and Rules made there under. Hence, the disclosures as required under Rule 8 (5) (v) & (vi) of the Companies (Accounts) Rules, 2014, are not applicable to your Company.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to section 134 (5) of the Companies Act, 2013, your Directors hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirement set out under Schedule III to the Act have been followed and there are no material departures from the same;

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

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

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

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

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under the Companies (Accounts) Rules, 2014

(A) Conservation of Energy:

The operations of the Company are not energy-intensive. However, significant measures are being taken to reduce the energy consumption by using energy efficient equipment.

- Phasing out of CFL lamps to LED lights

- Introduction of timer based operation of air handling units to reduce power consumption

- Energy optimization practices implemented in transformer operation

- VFD installation for AHU motor in a phased manner

- All lifts and OT AHUs are operated with VFD panels

- For recently commissioned units, building orientation has been so designed that helps to maximize use of Day Light and to reduce heat gain in order to reduce energy consumption.

- For recently commissioned units, the building is being constructed by using structural steel to reduce embedded energy and also to reduce the impact of construction activities to the neighborhood and environment.

- The glass used for facade in a number of facilities is double glazed and is energy efficient low emissivity type which helps in reducing solar beat gain coefficient while improving the visibility.

- Rain water harvesting system installed at our green field recently completed projects to conserve natural resources

There would not be a material financial implication of these measures as energy costs comprise a very small portion of your companyâs total expenses.

(B) Technology absorption:

I. The effort made towards technology absorption;

In order to promote indigenous technology absorption, the following equipment has been installed at our various units;

a) Blood bank equipment including Deep freezer, Blood bank refrigerator, Platelet agitator/incubator, Blood collection monitor and tube sealer, Donor couch compofuge

b) X-ray system;

c) Dialysis machine;

d) Ventilator;

e) CT scanning machines;

f) MRI scanning machines;

g) ultrasound systems; and

h) Linac systems.

II. The benefit accrued due to this is primarily cost reduction from import substitution considering the impact of exchange rate fluctuation and revision of customs duty tariffs. The performance and quality of these equipments have been found to be quite satisfactory

III. The expenditure incurred on Research and Development : NIL

PARTICULARS OF EMPLOYEES & REMUNERATION

The details regarding ratio of remuneration of each director to the median employeeâs remuneration and other details as required in section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended herewith as Annexure - D.

The statement containing information as per provision of Section 197(12) read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in separate annexure forming part of this report. However, Annual Report is being sent without the said annexure. In terms of provisions of section 136 of the Companies Act, 2013, the said annexure is open for inspection at the registered office of the Company during the office hours. Any member interested in obtaining the copy of the same may write to the Company Secretary at the Registered Office of the Company.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to 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. The Company has in place adequate internal financial controls in order to ensure that the financial statements of the Company depict a true and fair position of the business of the Company. The Company continuously monitors and looks for possible gaps in its processes and it devices and adopts improved controls wherever necessary.

RISK MANAGEMENT

At Shalby, risks are measured, estimated and controlled with the objective to mitigate adverse impact. Your companyâs fundamental approach to risk management includes, anticipate, identify and measure the risk. Your company has in place a mechanism to monitor and mitigate various risks associated with the business. The Company has adopted a risk management policy which inter alia, sets out our approach towards risk assessment, risk management, and risk monitoring, which is periodically reviewed by the Board. The said policy is available at https://www.shalby. org/wp-content/uploads/2017/12/Risk-Management-Policy.pdf

VIGIL MECHANISM

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy. The policy enables the employees to report genuine concerns to the management regarding instances of unethical behavior, actual or suspected fraud or violation of Companyâs Code of Conduct or mismanagement, if any. Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for strict confidentiality, adequate safeguards against victimization of Whistle Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee, in appropriate cases. The functioning of vigil mechanism is reviewed by the Audit and Risk Management Committee from time to time. None of the Whistle blowers has been denied access to the Audit and Risk Management Committee of the Board pertaining to whistle blower policy. The said Vigil Mechanism and Whistle-Blower Policy is available at https:// www.shalby.org/wp-content/uploads/2017/10/vigilmechanism_ whistleblower_policy.pdf

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the requirements of Section 135 of the Act, your Company has constituted a CSR Committee, which comprises Mr. Umesh Menon, Chairman, Mr. Shyamal Joshi and Mr. Ashok Bhatia as its members as on March 31, 2018. The Company has also framed a CSR Policy in compliance with the provisions of the Act and content of the same is available at https://www. shalby.org/wp-content/uploads/2017/10/Corporate-Social-Responsibility-CSR-Policy.pdf The Annual Report on CSR activities outlining geographical areas for CSR activities, composition of CSR committee, amount of CSR fund to be expended etc is annexed herewith as Annexure - E.

OTHER DISCLOSURES AND INFORMATION

1. Sexual Harassment of Women at workplace

Your Company has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace under the provisions of Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act 2013 and rules framed thereunder. The Company has anti Sexual harassment Committee to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, there were three complaints received which were investigated and resolved and there were no complaints pending at March 31, 2018.

2. Significant or Material Orders passed by the Authority

There are no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its future operations.

3. Material changes and commitments affecting financial position

There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year under review and to the date of this report.

STATUTORY AUDITOR & AUDITORSâ REPORT

Pursuant to Section 139 of the Companies Act, 2013, M/s. G. K. Choksi & Co., Chartered Accountants (Firm Registration no. 101895W), Statutory Auditor would complete their current term as Statutory auditors of the Company at the conclusion of the 14^thAnnual General Meeting of the Company. The Board of Directors placed on record their sincere appreciation for their Professional Services.

As recommended by the Audit Committee, the Board of Directors has considered and recommended the appointment of M/s. T. R. Chadha & Co., LLP, Chartered Accountants as Statutory Auditors of the Company, for a period of 5 consecutive years from the conclusion of 14th Annual General meeting till the conclusion of 19th Annual General meeting of the Company. M/s T. R. Chadha & Co., LLP, Chartered Accountants, have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for appointment as auditors of the Company.

The Statutory Auditorâs comment on your companyâs account for the year ended March 31, 2018 are self-explanatory in nature and do not require any explanation. The Auditors Report does not contain any qualification or adverse remarks.

During the year, the Auditors had not reported any matter under Section 143(12) of the Act and therefore no detail is required to be disclosed under Section 134(3) (ca) of the Act.

COST AUDITORS

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014 and Companies (Cost Records and Audit) Rules, 2014, M/s. Board Sanjay B & Associates has been appointed as Cost Auditors by the Board of Directors on the recommendation of Audit Committee, for audit of cost records for the year ended on March 31, 2018 and their remuneration was ratified by members at the 13th Annual General meeting of the Company. The Board of Directors of the Company re-appointed M/s. Board Sanjay B & Associates for audit of cost records for the year ended on March 31, 2019 at a remuneration of Rs.100,000/- plus applicable taxes and reimbursement of out of pocket expenses incurred, if any, in connection with the cost audit and recommended the members for their ratification.

Your Company has received consent along with confirmation that the appointment is in accordance with the applicable provisions of the Act and Rules framed thereunder and they do not hold any disqualification under section 139, 148 and 141 of the Companies Act, 2013.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Mr. Shambhu J. Bhikadia, Practicing Company Secretary (PCS Registration no. 3894) to conduct the Secretarial Audit of the Company for the year ended March 31, 2018. The Secretarial Audit Report for the FY 2017-18 does not contain any qualification, reservation, or adverse remarks and is annexed to this Report as Annexure - F.

INTERNAL AUDITOR

Pursuant to the provision of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, M/s. Pricewaterhouse Coopers Pvt. Ltd., Chartered Accountants, Ahmadabad has been appointed as Internal Auditors of the Company for Financial Year 2018-19 to enhance the financial controls and practices within the Company.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their sincere appreciation for the wholehearted support and contribution made by all Doctors and their team, bankers, Government Authorities, auditors and shareholders during the year under review. Your Directors express their deep sense of appreciation and extend their sincere thanks to every employee at all level for their dedicated services and look forward their continued support.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

DR. VIKRAM I. SHAH

Place: Ahmedabad Chairman & Managing Director

Date: May 7, 2018 DIN: 00011653

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