AFFLUENCE

BOARDS REPORT

Dear Members,

Metropolis Healthcare Limited

Your Directors have pleasure in presenting their 17th Annual Report on the business and operations of your Company along with the audited financial statements for the year ended March 31, 2017.

Financial Highlights

The salient features of the Companys Standalone and Consolidated financial results for the year under review are as follows:

Result of Operations

During the year under review, the standalone income from operations of the Company increased to INR 3,59,29,21,118/- compared to INR 3,04,39,77,077/- in the previous year, registering growth of 18.03%. The standalone profit after tax for the year increased to INR 86,62,53,197/- compared to INR 77,79,82,508/- in the previous year, increased by 11.35%.

During the year under review, the consolidated income from operations of the Group increased to INR 5,87,43,15,578/- compared to INR 5,24,02,29,676/- in the previous year, registering growth of 12.10%. The consolidated profit after tax and minority interest for the group increased to INR 1,07,49,93,154/- compared to INR 73,62,27,405/- in the previous year, increased by 46.01%.

Material Changes and Commitments

No material changes or commitments have occurred between the end of the calendar year and the date of this Report which affect the financial statements of the Company in respect of the reporting year.

Dividend

During the year, your Company has distributed an interim dividend @ INR 52.3908/- per equity share of face value of INR 10 each to shareholders, who were on the register of members of the Company as on the closing hours of business on March 31, 2017, being record date fixed by the Board of Directors for this purpose.

Your directors do not recommend any final dividend for the year ended March 31, 2017.

Accordingly, interim dividend declared and paid by the Company is considered and confirmed as the final dividend to be appropriated from the profits for the year ended March 31, 2017.

Reserves

Your directors have proposed not to transfer any amount to general reserves of the Company for the year ended March 31, 2017.

Change in Nature of Business

There was no change in the nature of the business or any activity of business of the Company during the year under review.

State of the Companys Affairs

      The dual strategy followed by the management for increasing the footprints of the Company; by setting up new collection points in areas where the potential is high and converting the mature collection centers into processing centers. Aforesaid strategy was continued successfully during the year under review.

      This strategy was also supported with a considerable increase in the Companys sales force. This has tremendously widened the reach and added depth in the market coverage of the Company.

      To widen its presence in International market, the Company is focusing on African Continent besides Sri Lanka. During the year under review, group added more Labs in existing locations & initiated necessary steps to establish its presence in other countries.

      The Companys efforts to optimize costs are also yielding results by adding to its profit margin. This enables the Company to further invest & strengthen its base resources in such areas where it is planning for its growth and improvement, without its profitability being affected.

      The Company is committed towards consistently delivering best service to its customers without sparing any efforts and cost. To achieve the same, the Company is continuously conducting internal audits within the organization and also adopting corrective measure which will lead to sustain its continuous development.

      As part of our growth strategy, we are planning and also have constructed and opened several new clinical laboratories, including regional reference laboratories and patient service collection centers in India. The significant capital investments which were necessary to construct clinical laboratories, particularly regional reference laboratories were required due to their size and structure having material impact on our results of operations. During the period of their construction and the initial post-opening period each clinical laboratory were fully integrated into our network with added cost of infrastructure. Further, slower integration has also caused increase in margin pressure and therefore we had ensured that costs are under control and do not mount rapidly, despite of inflationary trend in market.

 Information Technology

 The Company believes in present scenario that IT will be playing more and more crucial role in its business. It has therefore taken following important steps to leverage its lead in this area:

During the year under review (FY 2016-17) following were the key achievements:

        Completion and stabilization roll out of new LIMS system across the group.

        Integration of multiple software being used has been started with first assignment being LIMS and SAP.

        Major exercise of data cleaning and integration is started to improve MIS feasibility.

        Ensured optimum uptime and safety with no adverse event on record that lasted long causing business impact.

Your Company is having following major plans for upcoming year (FY 2017-18):

        Upgrading DR (Disaster Recovery) and BCP (Business Continuity Plan) for LIMS and SAP for the group.

        Improving actionable MIS and dashboards for various levels for ease of decision making.

        Process automation to improve productivity, efficiency, quality and costs in laboratory operations, HR and customer service

        Company is planning to invest more in IT infra to be ahead in terms of technology, innovation and automation thereby improving efficiency and productivity.

Awards & Accolades

Ms. Ameera Sushil Shah, Managing Director of the Company was honored with the 'Trailblazers' Award by Forbes India 2017.

In FY 2015-16 Company bagged the Best Diagnostic Service Provider Award at the National Awards for excellence in healthcare by CMO Asia Group.

In FY 2015-16 Ms. Ameera Sushil Shah, Managing Director of the Company was honored with the Corporate Champion Award by the US India Business Council.

In FY 2015-16 Ms. Ameera Sushil Shah, Managing Director of the Company was awarded with ‘Women Leadership Award in Healthcare’ at the CMO Asia Awards.

In 2014, Company won the Emerging Companies Award hosted by Business Today and Yes Bank.

Company was honoured ‘India’s most promising brand award’ in the Healthcare category at the Global Indian Excellence Summit, 2014 held in London. Process advisors for the award were Ernst & Young.

In 2014, Ms. Ameera Sushil Shah, Managing Director of the Company was chosen as one of the most respected leaders under 40 years by Economic Times & Spencer Stuart.

Ms. Ameera Sushil Shah, Managing Director of the Company, was also featured in the Forbes Asia Power List in 2015.

Ms. Ameera Sushil Shah, Managing Director of the Company was featured in ‘The Young Global Leader List’ put together by the World Economic Forum.

Accreditations & Certifications

        Majority of Metropolis laboratories are accredited by NABL (National Accreditation Board for testing and Calibration Laboratories).

          Metropolis Central laboratory has been accredited by CAP (College of American Pathologists).

        RNTCP CERTIFICATE for C&DST: Metropolis Healthcare is certified by the National Mycobacteriology Certification System of Central TB Division - Ministry of Health, Government of India for TUBERCULOSIS DRUG SUSCEPTIBILITY TESTING.

Future Outlook

Healthcare has become one of Indias largest sectors - both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players.

Indian healthcare delivery system is categorized into two major components - public and private. The Government, i.e. public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centres (PHCs) in rural areas. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier I and tier II cities.

India's competitive advantage lies in its large pool of well-trained medical professionals. India is also cost competitive compared to its peers in Asia and Western countries. The cost of surgery in India is about one-tenth of that in the US or Western Europe.

The overall Indian healthcare market today is worth INR 67,567 crore and is expected to grow to INR 1,891,891 crore by 2020, a Compound Annual Growth Rate (CAGR) of 22.9 per cent. Healthcare delivery, which includes hospitals, nursing homes and diagnostics centres, and pharmaceuticals, constitutes 65 per cent of the overall market.

There is a significant scope for enhancing healthcare services considering that healthcare spending as a percentage of Gross Domestic Product (GDP) is rising. Rural India, which accounts for over 70 per cent of the population, is set to emerge as a potential demand source.

Your Company is planning to invest more in IT infrastructure to be ahead in terms of technology, innovation and automation, thereby improving its efficiency and productivity.

References: Department of Industrial Policy and Promotion (DIPP), RNCOS Reports, Media Reports, Press Information Bureau (PIB),

Road Ahead

India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities, thus catering to a greater proportion of population. Besides, Indian medical service consumers have become more conscious towards their healthcare upkeep. The Indian diagnostic market is expected to touch INR 60,000 crore by 2017-18 and with improved budgetary allocations by the Union Government we expect this trajectory to continue into the future as well.

The growth in the industry is being driven by various factors including which provide growth direction:

 Increase in evidence-based treatments

Test perfection continuously increasing

Huge demand-supply gap

Government is promoting public private partnership (PPP)

Changing disease profiles

Increase in health insurance coverage

Need for greater health coverage as population and life expectancy increase

Rising income levels make quality healthcare services more affordable

Demand for lifestyle diseases-related healthcare services

Increase in preventive health check-ups and awareness amongst people about fitness

Technology upgrade dependency on path-lab testing and turnaround time (TAT) and  quality is increasing

There is substantial increase in scalability in testing

The diagnostics industry is witnessing a great deal of visibility and interest with more organized players driving regional growth. This is also resulting in gradual shift of the market from unorganized to more organized players thereby driving quality and efficiency standards. This sector has also attracted investments further fuelling competition but at the same time improving industry standards. India still has large rural markets which are either under serviced or not serviced at all by diagnostics and this provides the opportunity for growth in under penetrated areas although at significantly lower price points. In the urban markets too there are pockets of growth opportunities given the overall awareness on health care and health attitudes.

Through its various strategies & actions, the management of the Company has substantially added value to the Company. This has been demonstrated time & again during the stake sale of its various investors over a period of time.

This has now placed the Company in the unique position of being able to build on its strong foundation & successes. It proposes to do so in the coming years by

        Exploiting the extensive network it has created & the quality that it is known by to ramp up its revenue growth faster.

        Ensuring that it has fully drained the areas that it is strong in instead of spreading itself too thin.

        Resorting to a technical sale rather that a price sale by using the medico-marketing concept that has been launched.

        Adding further value to the Brand by promoting it more vigorously but in a focused & scientific manner.

        Reducing the wastages in the processes through more & more automation.

        Leveraging more the benefits of scale thus reducing the impact of natural cost increases

Share Capital

The authorized share capital of the Company is INR 55,00,00,000/- (Indian Rupees Fifty Five Crores Only) divided in to 5,50,00,000 (Five Crore Fifty Lakhs) equity shares of INR 10/- (Indian Rupees Ten) each and the paid-up share capital of the Company is INR 9,54,36,460/- (Indian Rupees Nine Crore Fifty Four Lakhs Thirty Six Thousand Four Hundred Sixty Only) divided in 95,43,646 (Ninety Five Lakhs Forty Three Thousand Six Hundred Forty Six) equity shares of INR 10/- (Indian Rupees Ten) each. There was no change in the share capital of the Company for the year under review.

Directors and Key Managerial Personnel

Your board comprise of six (6) Directors. 

Mr. Mihir Jagdish Doshi (DIN 01283331) and Mr. Rajiv Devinder Sahney (DIN 00022896) are Independent Directors on the Board of the Company.

Dr. Sushil Kanubhai Shah (DIN 00179918) is Chairman & Executive Director of the Company. Ms. Ameera Sushil Shah is Managing Director of the Company, Dr. Duru Sushil Shah (DIN 00180126) and Mr. NeerajBharadwaj (DIN 01314963) are Non-Executive Directors on the Board of the Company.

On the basis of the written representations received from the directors, none of the above directors are disqualified under Section 164 (2) of the Companies Act, 2013.

During the year, Mr. Sanket Bipin Shah, Company Secretary of the Company resigned from the service of Company Secretary of the Company with effect from September 22, 2016. Consequent to Mr. Sanket resignation, the Board appointed Mr. Jayant Prakash as the Company Secretary and Compliance Officer, Legal Head of the Company with effect from September 22, 2016.

In accordance with the provisions of sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel of the Company:

Ms. Ameera Sushil Shah as Managing Director of the Company.

Dr. Sushil Kanubhai Shah as Whole Time Director of the Company.

Mr. Vijender Singh as Chief Executive Officer of the Company.

Mr. Tushar Manohar Karnik as Chief Financial Officer of the Company.

Mr. Jayant Prakash as Company Secretary of the Company.

In accordance with the provisions of the Companies Act 2013, and Articles of Association of the Company, Dr. Duru Sushil Shah is liable to retire by rotation and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting of the Company.

Disclosure of appointment and resignation of Independent Director and their declarations

Mr. ShaileshHaribhakti resigned from the office of Independent Director with effect from October 17, 2016.

Mr. Rajiv Devinder Sahney (DIN 00022896) resigned as Nominee Director on the Board of the Company with effect from December 05, 2016 and was appointed as Additional (Independent) Director on the Board of the Company with effect from December 07, 2016 and was regularised as Director (Independent) on the Board of the Company with effect from December 08, 2016.

All the Independent Directors have given the declarations that they meet the criteria of independence as laid down under the provisions of section 149(6) of the Companies Act, 2013.

Directors' Responsibility Statement

Your Directors state that:

i) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards read with requirements set out under Schedule III of the Companies Act, 2013, have been followed and there are no material departures form the same;

ii)the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;

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

iv) the Directors have prepared the annual accounts on a going concern basis.

v) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Number of Meetings of Board of Directors held and attendance of each Director

Number of Meetings of the Board of Directors:

During the financial year under review, the Board of Directors met five times on the following dates as mentioned hereunder:

Details of meetings attended by Directors are given in the appended table below:

Audit Committee

The Audit Committee comprises of three members with any two forming the quorum. The composition of the Audit Committee meets the requirements of Section 177 of the Companies Act, 2013.

Changes in the Composition of the Audit Committee of the Company:

Mr. ShaileshHaribhakti resigned from the office of Independent Director and ceased to be member of Audit Committee with effect from October 17, 2016.  Mr. Rajiv DevinderSahney was appointed asIndependent Director and also as member of Audit Committee with effect from December 8, 2016.

The Committee met five times during the financial year on June 29, 2016; September 7, 2016; September 22, 2016; December 8, 2016 and March 30, 2017.

The composition of the Audit Committee and the attendance details of the members are given below:

Mr. Jayant Prakash, Company Secretary, Compliance Officer and Head Legal of the Company is acting as Secretary of the Audit Committee.

Nomination & Remuneration Committee:

Changes in the Composition of the Nomination and Remuneration Committee of the Company:

Mr. ShaileshHaribhakti resigned from the office of Independent Director and ceased to be member of Nomination and Remuneration Committee with effect from October 17, 2016.

Mr. Rajiv Devinder Sahney was appointed as Independent Director and also as member of Nomination and Remuneration Committee with effect from December 8, 2016.

The Committee met two times during the year on June 29, 2016 and March 30, 2017.

The Composition of the Nomination and Remuneration Committee and the attendance details of the members are given below: -

The Board has, on the recommendation of the Nomination & Remuneration Committee of the Company framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration.

The Policy is set out as Annexure1 to this Boards Report.

Corporate Social Responsibility (CSR) Initiatives

The Company has taken initiatives to discharge its CSR duties as required under section 135 of the Companies Act, 2013 and has spent part of the amount till date and is in process of spending the balance sum over a period of time. However, the Company has not been able to spend any amount during the year under review.

Details of CSR Activities undertaken by the Company along with CSR Policy of the Company is enclosed as Annexure 2A & 2B.

The meeting of CSR Committee was held on March 30, 2017.

The composition of the CSR Committee and the attendance details of the members are given below:

Extract of Annual Return

An extract of the Annual Return as prescribed under section 92 (3) of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014 in the prescribed Form MGT. 9 is attached as Annexure 3.

Public Deposits

Your Directors wish to inform that the Company has not accepted any deposits from public covered by provisions of section 73 of the Companies Act, 2013 and rules there under.

Particulars of Loans, Guarantees and Investments

The details of loans, guarantees and investments covered under section 186 of the Companies Act, 2013 are given in the note no 11 and 13 to the Financial Statements.

Related Party Transactions

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. As provided under section 134(3)(h) of the Companies Act, 2013 and rules made thereunder disclosure of particulars of material transactions with related parties entered into by the Company with related parties in the prescribed format is annexed to this report as Annexure 4.

Members may refer to note no 27 to the financial statements for details of related party transactions as per AS-18.

Statutory Auditors

At the Board of Directors Meeting and Extra-ordinary General Meeting of the Company held on December 8, 2016; Messrs. B S R & Co LLP, Chartered Accountants, Mumbai, (Firm Registration No: 101248W/W-100022) were appointed as Statutory Auditors of the Company in casual vacancy caused by resignation of previous Statutory Auditors, Messrs. Walker Chandiok & Co LLP, Chartered Accountants, Mumbai, (Firm Registration No: 001076N/N500013) on December 8, 2016, until the conclusion of ensuing Annual General Meeting of the Company.

In terms of section 139 of the Companies Act, 2013, your Board recommends the appointment of Messrs. B S R & Co LLP, Chartered Accountants, Mumbai, (Firm Registration No: 101248W/W-100022) as Statutory Auditors of the Company (Subject to ratification by the members at every Annual General Meeting). Messrs. B S R & Co LLP, Chartered Accountants, Mumbai, (Firm Registration No: 101248W/W-100022) will hold office from conclusion of this Annual General Meeting till the conclusion of 22nd Annual General Meeting of the Company, subject to approval of shareholders in the ensuing Annual General Meeting of the Company.

The Company has received consent letter and certificate to the effect that if they are appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Comments of the Board on the adverse remarks of the Statutory Auditors in their Statutory Audit report

There are no disqualifications or adverse remarks of the Statutory Auditors in their Report except in reference to note 32 to the consolidated financial statements. The Statutory Auditors of the Company have qualified its opinion to note 32, because the financial statement of a joint venture entity, Star Metropolis Health Services Middle East LLC, was not consolidated in the consolidated financial statement of the Company.

The Company could not finalise and provide the financial statements of joint venture entity to the Statutory Auditors of the Company, since, dispute exists between the parties to the joint venture entity.

Save and except above the auditors report is self-explanatory and does not require any further clarifications.

Development and Implementation of Risk Management Policy

The Company is exposed to inherent uncertainties owing to the sector in which it operates. The Board of Directors is overall responsible for identifying, evaluating and managing all significant risks faced by the Company. A key factor in determining a companys capacity to create sustainable value is the risks that the Company is willing to take at strategic and operational levels and its ability to manage them effectively. Therefore, your Company is in process of adopting an Enterprise Risk Management Policy which will focus on ensuring that these risks are identified on a timely basis and addressed.

During the year under review, your Company has appointed M/s. PKF Sridhar &Santhanam LLP, consultants to guide the Company in preparing and implementing Enterprise Risk Management Policy of the Company and to adopt framework to identify, assess and mitigate risk of the Company.

Internal Financial Controls with reference to the Financial Statements

The Company has in place SOPs covering all the critical business processes, which are followed at all its collection centres. The internal financial control system was duly prepared with the help of the professionals which was independently tested by a professional consultant. These are updated modified, and authenticated by each and every person of the department from time to time as required.

The audit was finally conducted by Suresh Surana and Associates LLP (Firm registration number AAB-7509), the internal auditor of the Company based on the internal financial control system.  All of their observations were duly discussed with the management of the Company & corrective actions were taken, if any. The Internal Auditors track & report on the improvements during the next cycle of Audits. The final presentation is made to the Audit Committee showing the major observations & status of the corrective actions.

Your Board generally feels that the Internal Financial Controls with reference to the Financial Statements of the Company are adequate for capturing the financial impacts of all its activities & their accurate quantification and disclosure in the Financial Statements. The Management continually reviews the weaknesses identified therein by the Internal Auditors or otherwise and is conscious in taking corrective action. Nevertheless during the current year a more thorough assessment of the said Controls by an outside agency will be carried out.

Corporate Governance

A summary of the corporate governance measures adopted by the Company is given below:

i)  The Company recognizes its role as a corporate citizen and endeavors to adopt the best practices and the highest standards of corporate governance through transparency in business, ethics, and accountability to its customers, Government and others. The Companys activities are carried out in accordance with good corporate practices and the Company is constantly striving to better them by adopting the best practices.

The Company believes that good Corporate Governance practices enable the Management to direct and control the affairs of the Company in an efficient manner and to achieve the Companys goal of maximizing value for all its stakeholders. The Company will continue to focus its resources, strengths and strategies to achieve its vision of becoming a leading diagnostic company in India.

ii)  The Board of Directors along with its Committees provides leadership and guidance to the Companys Management and directs, supervises and controls the activities of the Company.

Your Company has an eminent Board which follows the highest standards of Corporate Governance in its deliberations. There is clear accountability at various management levels and care is taken to ensure compliance with all statutory regulations and to adhere to the highest standard of business ethics.

iii) In order to ensure focused attention on business and for better governance and accountability, the Board has constituted the following mandatory committees:

a)      Audit Committee;

b)      Nomination and Remuneration Committee,

c)      CSR Committee.

Secretarial Auditor and Secretarial Audit Report

Pursuant to section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed CS Amit Kaushal of A. Kaushal & Associates, Company Secretaries, New Delhi to undertake the Secretarial Audit of the Company for the Financial Year ended March 31, 2017. The Secretarial Audit Report in the prescribed Form No. MR-3 is attached as Annexure 5.

Comments of the Board on the adverse remarks of the Secretarial Auditors in their Secretarial Audit report

1. The Company has provided reason in its Board Report for not incurring 2% of average net profits of the Company on Corporate Social Responsibility (CSR) activities during the financial year.

2. The Company is in the process of filing an application to the Central Government for condonation of delay in filing e-Form MGT-14 regarding appointment of Mr. Tushar Manohar Karnik and Mr. Vijender Singh as CFO and CEO respectively.

3. The Company is in the process of filing an application for composition of offence u/s 441 of the Companies Act, 2013 for not filing of e-Form MR-1 regarding appointment of Mr. Tushar Manohar Karnik and Mr. Vijender Singh as CFO and CEO respectively.

4. The Company is in the process of filing DIR-12 regarding regularization of appointment of Mr. Rajiv DevinderSahney at the Extra-Ordinary General Meeting held on December 8, 2016.

5. Henceforth, the Company will comply with the provisions of Articles of Association (AOA) of the Company and the provisions of section 152 of the Act.

6. Henceforth, the Company will comply with the provisions of Secretarial Standard - 1 and Secretarial Standard - 2.

7. Henceforth, the Company will fix the amount payable to Statutory Auditors and approve the same in the General Meeting of the Company.

8. Henceforth, the Company will evaluate the performance of independent directors in terms of section 149 read-with Schedule IV of the Act.

9. Henceforth, the Company will file e-Form MGT-7 (Annual Return) duly signed by Managing Director and Company Secretary in employment as required under the provisions of Companies Act, 2013.

10. Henceforth, the Company will comply with the provisions of Labour and Industrial Laws.

Subsidiary, Joint Ventures and Associate Companies

The Subsidiary Companies of your Company continued to perform in their respective areas as per the plans and thus contributed robustly to the overall growth of the Group in term of revenue, profits and overall performance of Group.

During the year, your Company had 16 domestic subsidiaries (including two step down subsidiaries) and 6 overseas subsidiaries (including three step down subsidiaries) and one foreign branch which is considered as a foreign company in the respective country. Also, your Company has 1 overseas Associate Company.

During the year, companies listed in Annexure 6 to this Report are Subsidiaries, Joint Venture and Associate Companies.

Stock Options

The Company has two ESOP Schemes namely:

1.      Revised Metropolis Employee Stock Option Scheme 2007 (MESOS - 2007)

2.      Metropolis Employee Stock Option Scheme (MESOS 2015)

The details of Revised Metropolis Employee Stock Options Scheme 2007 (MESOS 2007) and Metropolis Employee Stock Option Scheme (MESOS- 2015) including the number of outstanding options are given in Annexure 7 forming part of this report.

Industrial Relations

The Companys relations with all its employees remained cordial and satisfactory during the year under review.

Particulars of Employees

In terms of the provisions of section 197 of the Companies Act, 2013 with rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014, the particulars of employees are set out in Annexure 8to this report.

Dematerialization of Shares

All the Shares of your Company are in Dematerialization mode. The ISIN of the Equity Shares of your Company is INE112L01012.

Registrar & Share Transfer Agent

System Support Services (SSS) were Registrar & Share Transfer Agent of the Company. The business of Registrar & Share Transfer Agent of SSS was acquired by Link Intime India Private Limited. A Tripartite Agreement was executed between your Company, Link Intime India Private Limited and National Securities Depository Limited (NSDL) to act as a Registrar & Share Transfer Agent of the Company with effect from 25.01.2017.

Accordingly, Your Companys Registrar and Share Transfer Agent is:

Link Intime India Private Limited

C-101, 1st Floor, 247 Park, 

Lal Bahadur Shastri Marg, Vikhroli (West), 

Mumbai 400 083, Maharashtra, India.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Disclosures as specified in section 134(3)(m) of the Companies Act, 2013 read with the rule 8(3) of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is as under:

Details of significant & material orders passed by the regulators or courts or tribunal

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

Vigil Mechanism

Since your Company does not fall within the class of Companies as specified under provisions of Section 177 of the Companies Act, 2013. Hence the Company is not required to establish a vigil mechanism.

Disclosure of Remuneration or Commission received byManaging or Whole-Time Director fromits Holding or Subsidiary Company:

The provisions of section 197(14) of the Companies Act, 2013 are not applicable to the company.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place measures for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company did not receive any complaint during the year FY 2016-17.

Appreciations

The Directors acknowledge the valuable contribution of all its employees in the continuous growth of the Company and making it a dominant player in the market.

Further, they on behalf of the Company would like to express their sincere gratitude to the Medical Profession for their unconditional support.

They would also like to thank the Companys Joint Venture Partners, Banks and other stakeholders for their contribution in the Companys growth and in its operations.

                                                                                                                                                                ANNEXURE 1

Remuneration Policy     

1.0       PROLOGUE:

_____________________________________________________________________

Pursuant to the Section 178 of the Companies Act, 2013 read with the
rule 6 of the Companies (Meeting of the Board and its powers\Rules, 2014, the Nomination and Remuneration Committee of the Board of the Company has formulated the following remuneration policy relating to the remuneration to the Directors, key managerial personnel and other employees.

2.0       OBJECTIVE

_____________________________________________________________________

The objective of the policy is to ensure that

1.      the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors & Employees of the quality required to run the company successfully

2.      relationship of remuneration to performance is clear and meets appropriate performance benchmarks

3.      remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the vision of the company and its goals

4.      the companys spend on this expenditure is reasonable, market driven &  beneficial to its business

5.      it differentiates & compensates, to the extent possible the contribution of each senior person to the growth of the organization

General Principles

1.      This policy applies to Whole time Directors, Key Managerial personnel and other Senior Executives

2.      The following factors will be considered while determining the remuneration payable for these positions

         Qualification

         Experience

         Expectations from the position &

         Industry benchmark

3.      The following factors will be taken into account while periodically deciding on the increment/ variable pay/ commission payable for these positions

         His/ her Performance against pre-agreed Key Result Areas & objectives

         Performance of the company/ Unit

         Budgets

         Potential of the person

         Industry benchmark

4.      The Remuneration policy at all times will be complying with the provisions of the relevant Laws including Companies Act, 2013. In case of any inconsistency between the two provisions, provisions of the Law will prevail

Additionally, Remuneration payable to individual categories will be governed by the following principles

A.                 Whole Time Directors/ Executive Directors:

                    i.            At the discretion of the Company, the remuneration payable may have one or more of the following components

         Fixed Salary

         Perquisites & allowances based on company policy

         Commission or variable pay

                  ii.            The Nomination and Remuneration Committee shall recommend to the Board

         the overall remuneration payable

         increase in remuneration from time to time

         actual amount payable towards annual commission/ variable pay based on performance against pre-approved Goals

                iii.            The Board & the Shareholders (if required by the Companies Act, 2013 & the rules thereunder) will approve the remuneration/ payments

                 iv.            If in any of financial year, the profits of the Company are inadequate, the Company shall pay remuneration in accordance with the provisions of Schedule V of the Companies Act, 2013 or if unable to comply thereto, with the prior approval of the Central Government

B.                  Independent/ Non- Executive Directors:

                    I.            Independent/ Non- Executive Directors shall receive sitting fees as approved by the Board of Directors for attending the meeting of the Board/ Board Committees

                  II.            Independent Directors shall not be entitled for stock options from the Company

                III.            Non-Executive Directors (other than Independent Directors) may receive remuneration for services rendered if

         The services rendered are of a professional nature

         The Nomination & Remuneration Committee feels that he/ she possesses the necessary qualification for the required services

         If necessary, approval is obtained from Central Govt.

C.                  Key Managerial Personnel and Other Employees:

i.        The Remuneration payable to the KMPs & other Employees will have the following components

         Fixed Salary as per the structure specified in the HR policy

         Perquisites & benefits as per the grade of the Employee

         Variable Pay/ Incentive

         Retirement benefits

ii.      Additionally the Company may offer other Incentive plans including Employee Stock Options to certain eligible employees, regulated by the provisions of Companies Act, 2013

iii.    The Annual Awards to the employees will be as per the Performance Appraisal System laid down in the HR policy & go through the following process

         Setting up of Annual KRAs & objectives

         Periodic performance review

         Final performance review to be done annually

         Unit recommendations &

         Final Approval by Management

4.0              POLICY REVIEW & FUTURE AMENDMENT

This policy shall be reviewed the Nomination & Remuneration committee as & when changes are felt to be necessary to achieve the objectives of this policy.

ANNEXURE 2

CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

[Pursuant to clause (o) of sub-section (3) of Section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

1. Brief outline of the Companys CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs:

Brief oultine of the Corporate Social Responsibilty (CSR) Policy

Giving back to the society is embedded in the value system of Metropolis and we believe and aim to bring about a positive change in the nation. For the past 3 decades, Metropolis has been at the forefront in conducting impactful camps and driving numerous workshops for different sections of the society.

As an integral part of our commitment to Good Corporate Citizenship, we at Metropolis Healthcare Limited believe in actively assisting in improvement of the quality of life of people in communities, giving preference to local areas around our business operations. Towards achieving long-term stakeholder value creation, we shall always continue to respect the interests of and be responsive towards our key stakeholders - the communities, especially those from socially and economically backward groups, the underprivileged and marginalized.

The Board of Directors (Board) adopted the CSR Policy (Policy) on December 03, 2015 which is available on the Companys website. The Companys CSR is in alignment with the initiatives undertaken by it. The foundation set up by the Committee is empowering & developing young girls who are below poverty line and providing reproductive health education to the masses. Also, various skills are being provided for financial independence and imparting knowledge and training to the underprivileged.

Web-Link: For details of the CSR Policy along with projects and programs, kindly refer to http://www.metropolisindia.com/about-metropolis/corporate-social-responsibility/

2. Composition of CSR Committee of the Board

The Board of Directors have constituted a CSR Committee in accordance with the requirements of Section 135(1) of the Companies Act, 2013 (Act), which currently comprises of the following members:

         Mr. Mihir Doshi - Chairman

         Dr.  Duru Shah  

         Mr. Neeraj Bharadwaj

3.  Average net profit of the Company for the last three financial years

Average net profit of the Company for the last three financial years: INR 69,81,47,479

4.Prescribed CSR Expenditure (Two percent of the average net profit of the Company for the last three financial years)

Prescribed CSR Expenditure (Two percent of the average net profits): INR 1,39,62,949

5. Details of CSR spent during the financial year.

6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report: 

CSR committee finalized the CSR Policy on 03.12.2015 and identified certain projects to be executed and to be implemented in the following areas such as (i) Preventive Healthcare activities apart from our diagnostics/pathology business; (ii) Promoting education (continuing medical education) and (iii) Women empowerment and employment enhancement and development of vocational skills among children.

The Company has till date spent part of CSR amount but was unable to spend the entire amount since the identified projects are taking some time to setup in terms of infrastructure and will be executed in near future ensuring that the amount spent on CSR actually benefits to the society at large.

7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR

Policy is in compliances with CSR objectives and Policy of the company:

We hereby affirm that the CSR Policy, as approved by the Board, has been implemented and the CSR Committee monitors the implementation of CSR Projects and activities incompliance with our CSR objectives.

CSR POLICY                                                              Metropolis Healthcare Ltd

Helping People Stay Healthy, by Accurately Revealing their Inner Health

Companys Profile

Metropolis Healthcare Limited has earned the reputation of being Indias only multinational chain of diagnostic centers with presence in seven countries. We are the Pathology Specialists delivering over 30 millions tests a year, catering to more than 20,000 laboratories, hospitals, Nursing Homes and 2,00,000 Consultants. Over the past 3 decades, Metropolis has earned the trust of doctors and customers by delivering accurate reports. Metropolis has now expanded in to new services like Clinical Trials, Hospital Lab Management, Preventive Health Check-ups and Wellness Solutions.

Core Objectives of the CompanyTo be the Pathology Specialist amongst Doctors, Patients and Consumers. To improve the health index of consumers by Pioneering New Technologies, Innovating New Tests and Models, Delivered through Best in Class People. To be the most Respected, Growing and Profitable Indian Company in emerging markets.

CORPORATE SOCIAL RESPONSIBILITY POLICY

Metropolis Healthcare Limited (MHL) was incorporated in the year 2000. MHL is into business of providing health services by running pathology and diagnostics laboratories.  MHL has its presence through its subsidiaries in India, Srilanka, South Africa, Kenya, Ghana, Mauritius and Dubai. MHL has been providing quality health services and is committed to do so in the future. The Corporate Responsibility Policy of MHL is designed to achieve the distinction of being acknowledged as an admirable and trusted Company. This policy intends to set up guidelines for undertaking corporate social responsibility programmes.

1. Title and Applicability

This policy is tilted as Corporate Social Responsibility (CSR) Policy and it will be applicable w.e.f. April 01, 2014. This policy is applicable for corporate social responsibility programmes, projects, initiatives taken by MHL.

2. Objective of CSR Policy

Objective of CSR policy is:-

1.      To serve the social, economic, cultural interest of human beings in the community.

2.      To undertake various initiatives to uplift quality of life and well-being of people.

3. Funds Contribution

MHL will contribute 2% of its average net profits during three preceding financial years towards activities as specified in this policy.

4. Activities to be Undertaken

In accordance with the Companies Act, 2013 Metropolis CSR activities will focus on:

This is just an indicative list of activities to be undertaken by MHL. The CSR Committee or the Board of Directors of the Company (The Board) can add to the above list from time to time as it deems fit.

5. Funds Allocation

MHL can undertake project or programme in relation to the activity as mentioned above. CSR Committee will be responsible for recommending the expenditure to be incurred on different projects or programmes every year. The Board will approve the expenditure provided it is within the purview of this policy. The Board is empowered to change the allocation of funds for activities or projects or programmes.

6. Implementation

The implementation of projects or programmes can be undertaken by the MHL Head office or Branch Office.  MHL can collaborate with other corporates or body corporate or voluntary agencies or trusts or Government bodies for undertaking the projects.

7. Monitoring

The CSR Committee will be responsible for monitoring the progress of projects or programmes undertaken by MHL. The CSR Committee can appoint a person or external agency to monitor the progress of projects or programmes.

8. Reporting / Disclosure

The following regulatory disclosure requirements also need to be complied in relation to CSR activities of the Company apart from the reporting requirement as mentioned hereinabove in the Policy.

         Composition of the CSR Committee shall be disclosed in the Board Report

         The Board Report shall include an annual report on CSR activities in prescribed format(by MCA) containing specified particulars i.e. Brief Outline of CSR Policy, its content, the Average Net Profit for the last three financial years, and the prescribed CSR Expenditures etc;

         If the company fails to spend the prescribed amount, the Board shall, in its report specify the reasons for not spending the amount; and

         The content of Corporate Social Responsibility (CSR) Policy shall be displayed on the companys website, if any.

9. Composition of CSR Committee

The CSR Committee shall consist of the following directors:Dr. Duru Shah* Mr. Neeraj Bharadwaj Mr. Mihir Doshi

* In the Board of Directors Meeting held on March 30, 2017, Dr. Duru Shah was inducted as member of the CSR Committee in place of Ms. Ameera Shah.

10. Responsibility of the Committee

The responsibilities of the CSR Committee include:

         Formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013.

         Recommend the amount of expenditure to be incurred on the CSR activities.

         Monitor the CSR policy of the company from time to time.

11. Frequency of the Meetings of the CSR Committee

      CSR Committee of the Company shall meet once a year.

12. Exclusion of the following items from CSR

     The following activity shall not form part of the CSR activities of the Company:-The activities undertaken in pursuance of the normal course of business of a Company.

           CSR Projects/programmes or activities that benefit the employees of the Company and their families.

For Metropolis Healthcare Limited

Date: December 3, 2015                          

Place: Mumbai                                                     

Ameera Shah

Managing Director

ANNEXURE-3

FORMMGT-9

EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2017

[Pursuanttosection92(3)oftheCompaniesAct,2013 andrule12(1)oftheCompanies(ManagementandAdministration)Rules, 2014]

  I.      REGISTRATIONANDOTHERDETAILS:

II.      PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Allthebusinessactivitiescontributing10%ormoreofthetotal turnoverofthecompanyshallbestated:-

 III.   PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

 IV.   SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i.  Category-wiseShareHolding

ii.ShareholdingofPromoters

iii.          ChangeinPromotersShareholding

iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)

v) Shareholding of Directors and Key Managerial Personnel:

No other Director or KMP other than mentioned above hold any Equity Shares since the beginning of financial year to the end of Financial Year ending March 31, 2017. 

   V.   INDEBTEDNESS

Indebtedness oftheCompany including interestoutstanding/accrued butnotdueforpayment.

 VI.   REMUNERATIONOFDIRECTORSANDKEYMANAGERIAL PERSONNEL

A. RemunerationtoManagingDirector of the Company

B. RemunerationtoChairman & Executive Director of the Company

C.Remunerationtootherdirectors:                                                                                                          

D.RemunerationtoKeyManagerialPersonnelOtherThan MD/Manager /WTD

VII.   PENALTIES/PUNISHMENT/COMPOUNDINGOFOFFENCES:

ANNEXURE-4

Form AOC- 2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8 (2) of the Companies (Accounts) Rules, 2014)

FORM FOR DISCLOSURE OF PARTICULARS OF CONTRACTS/ARRANGEMENTS ENTERED INTO BY THE COMPANY WITH RELATED PARTIES

REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013 INCLUDING CERTAIN ARMS LENGTH TRANSACTIONS

UNDER THIRD PROVISO THERETO

1. Details of contracts or arrangements or transactions not at arms length basis - Not Applicable

2. Details of material contracts or arrangement or transactions at arms length basis:

ANNEXURE 5

SECRETARIAL AUDIT REPORT

For the financial year ended on 31st March, 2017

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

SECRETARIAL AUDIT REPORT

For the financial year ended on 31st March, 2017

To,

The Members,

Metropolis Healthcare Limited,

250 D, Udyog Bhavan, Worli,

Mumbai-400030, Maharashtra

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Metropolis Healthcare Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of Metropolis Healthcare Limiteds books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives, during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2017, according to the provisions of:

       i)            The Companies Act, 2013 (the Act) and the rules made there under;

     ii)            The Depositories Act, 1996 and the Regulations and Bye-Laws framed thereunder;

  iii)            Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Overseas Direct Investment;

   iv)            The following legislations specifically applicable to the Company, being engaged in healthcare activities:

                             (i)            The Environment (Protection) Act, 1986 & the Bio-Medical Waste Management Rules, 2016;

                          (ii)            Pre-Conception and Pre-Nadal Diagnostic Techniques Act, 1994

We have also examined compliance with the applicable clauses of the Secretarial Standards issued by the Institute of Company Secretaries of India.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above subject to the following observations under the Companies Act, 2013 (the Act) and the rules made there under:

1.                  The Company has not incurred 2% of average net profits of the Company during the 3 immediately preceding financial years on Corporate Social Responsibility (CSR) activities during the financial year.

2.                  As informed, the Company is in the process of filing an application to the Central Government for condonation of delay in filing e-form MGT-14 regarding appointment of Mr. Tushar Karnik and Mr. Vijender Singh as CFO and CEO respectively.

3.                  As informed, the Company is in the process of filing an application for composition of offence u/s 441 of the Companies Act, 2013 for not filing e-form MR-1 regarding appointment of Mr. Tushar Karnik and Mr. Vijender Singh as CFO and CEO respectively.

4.                  As informed, the Company is in the process of filing DIR-12 regarding regularization of Mr. Rajiv Devinder Sahney at the Extra-Ordinary General Meeting held on 08/12/2016

5.                  The Company was unable to comply with the provisions of Articles of Association (AOA) of the Company during the financial year.

6.                  The Company has not complied with the provisions of Secretarial Stanard-1 and Secretarial Standard-2 at some instances.

7.                  The Board of Directors of the Company has not fixed the remuneration of Statutory Auditors pursuant to the authorisation received from the members of the Company at the Annual General Meeting held on 22nd September, 2016.

8.                  The Board of Directors of the Company has not evaluated the performance of independent directors in terms of section 149 read-with Schedule IV of the Act.

9.                  E-form MGT-7 (Annual Return for the financial year 2015-2016) was digitally signed by Company Secretary in Practice instead of Company Secretary in employment. 

We further report that:-

The Board of Directors of the Company is constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors as per the provisions of the Act, however, the same is not in accordance with the provisions of Articles of Association. Further, the Company is also not having sufficient number of rotational directors as required under the provisions of section 152 of the Act. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.    

Adequate notice has been given to all directors to schedule the Board Meetings including the committee meetings, agenda and detailed notes on agenda were sent before the scheduled meeting, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the decisions are carried unanimously. The members of the Board have not expressed dissenting views on any of the agenda items during the financial year under review.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. However, we are unable to comment on the process of compliances of Labour and Industrial Law in the absence of documentary proof.

We further report that during the audit period, the Company has not carried out any specific events/actions having a major bearing on the companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.

This report is to be read with our letter of even date which is annexed as Annexure-I and forms an integral part of this report.

Annexure-I

To,

The Members,

Metropolis Healthcare Limited

250 D, Udyog Bhavan, Worli,

Mumbai-400030, Maharashtra

Our report of even date is to be read along with this letter:Management of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. Wherever required, we have obtained the Management Representation about the compliance of laws, rules and regulations and happening of the events etc. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

ANNEXURE 7

DETAILS OF ESOPS

1.         Metropolis Employee Stock Option Scheme 2007 Revised (MESOS 2007 Revised)

Employee wise details of options granted to the following:

(i)                  Key managerial personnel: Nil

(ii)    Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year: Nil

(iii)   Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant: Nil

2.    Metropolis Employee Stock Option Scheme - 2015 (MESOS 2015)

Employee wise details of options granted to the following:

(i)   Key managerial personnel:

(ii)    Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year:

(iii)   Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant: Nil

For and on behalf of the Board of Directors

Metropolis Healthcare Limited

Sushil Kanubhai Shah

Place: Mumbai                                                                        Chairman & Executive Director

Date: June 14, 2017                                                                (DIN: 00179918)

Annexure 8

Particulars of Employees

Details of Employees drawing remuneration more than the limits specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the Financial Year 2016-17.

Ø  The dual strategy followed by the management for increasing the footprints of the Company; by setting up new collection points in areas where the potential is high and converting the mature collection centers into processing centers. Aforesaid strategy was continued successfully during the year under review.   Ø  This strategy was also supported with a considerable increase in the Company’s sales force. This has tremendously widened the reach and added depth in the market coverage of the Company.   Ø  To widen its presence in International market, the Company is focusing on African Continent besides Sri Lanka. During the year under review, group added more Labs in existing locations & initiated necessary steps to establish its presence in other countries.   Ø  The Company’s efforts to optimize costs are also yielding results by adding to its profit margin. This enables the Company to further invest & strengthen its base resources in such areas where it is planning for its growth and improvement, without its profitability being affected.   Ø  The Company is committed towards consistently delivering best service to its customers without sparing any efforts and cost. To achieve the same, the Company is continuously conducting internal audits within the organization and also adopting corrective measure which will lead to sustain its continuous development.   Ø  As part of our growth strategy, we are planning and also have constructed and opened several new clinical laboratories, including regional reference laboratories and patient service collection centers in India. The significant capital investments which were necessary to construct clinical laboratories, particularly regional reference laboratories were required due to their size and structure having material impact on our results of operations. During the period of their construction and the initial post-opening period each clinical laboratory were fully integrated into our network with added cost of infrastructure. Further, slower integration has also caused increase in margin pressure and therefore we had ensured that costs are under control and do not mount rapidly, despite of inflationary trend in market.    

Disclosures as specified in section 134(3)(m) of the Companies Act, 2013 read with the rule 8(3) of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is as under:   A CONSERVATION OF ENERGY i) Steps taken or impact on conservation of energy   The Company has designed its facilities keeping in view the objective of minimum energy losses. Company has taken all steps to conserve energy in the work places by educating the employees to conserve energy. Company has installed split AC in areas which are operating extended hours. Energy saving LED lights are installed at various laboratories and collection centres. Every year, energy audit is conducted at central laboratory of the Company which is carried out by Independent Professional Agency. ii) Steps taken by the Company for utilising alternate sources of energy The Company being in the service industry does not have any power generation units and did not produce/generate any renewable or conventional power. iii) Capital investment on energy conservation equipment’s The Capital investment on energy conservation equipment’s is insignificant.    

B TECHNOLOGY ABSORPTION i) Efforts made towards technology absorption The Company being in Service Sector has adopted all new technology in terms of new software and hardware and latest machinery with automated processes available in the current Techno-environment and commensurate to the size, scale and complexity of its operations. ii) Benefits derived from technology absorption Technology absorption has helped the Company to provide better and more accurate service to the Customers. iii) Details of Imported technology (last three years)     -  Details of technology imported Nil   -  Year of Import N.A.   -  Whether technology being fully absorbed N.A.   -  If not fully absorbed, areas where absorption has not taken place and reasons thereof N.A. iv) Expenditure incurred on Research and development Nil    

C FOREIGN EXCHANGE EARNINGS AND OUTGO i) Foreign Exchange inflow INR 19,72,00,768/- ii) Foreign Exchange outflow INR 20,78,037/-    

Your Directors state that:   i) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards read with requirements set out under Schedule III of the Companies Act, 2013, have been followed and there are no material departures form the same;   ii)the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;   iii)the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;   iv) the Directors have prepared the annual accounts on a going concern basis.   v) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.