The Man Who Gave Us Our Vision - Fortis Healthcare
The man who gave us our visionLate Dr Parvinder SinghFounder Chairman, Fortis Healthcare Limited
To create a world-class integratedhealthcare delivery system, entailingthe finest medical skills combined withcompassionate patient care20th Annual Report 2015-161
ContentCompany Information03Director’s Report44Message from the Executive Chairman04Report on Corporate Governance83Board of Directors - FHL09Message from theChief Executive OfficerManagement Discussion& Analysis Report11610129Board of Directors - SRL15Auditor’s Report & Annexureto Standalone FinancialsMessage from theChief Executive Officer - SRLStandalone Financials13616190Awards & Accolades20Auditor’s Report toConsolidated Financials196Operations Review22Consolidated FinancialsSRL - Key Highlights402Fortis Healthcare Limited
FORTIS MEMORIAL RESEARCH INSTITUTE, GURGAONCompany InformationBoard of DirectorsEXECUTIVE DIRECTORMr Malvinder Mohan SinghExecutive ChairmanNON-EXECUTIVE DIRECTORSDr Brian William TempestMr Harpal SinghMs Joji Sekhon GillMs Lynette Joy Hepburn BrownMr Pradeep Ratilal RanigaDr Preetinder Singh JoshiMr Ravi Umesh MehrotraMr Shivinder Mohan SinghMs Shradha Suri MarwahMr Sunil GodhwaniChief Executive OfficerMr Bhavdeep SinghChief Financial OfficerMr Gagandeep Singh BediCompany Secretary andCompliance OfficerMr Rahul RanjanAuditorsM/s Deloitte Haskins & Sells LLPChartered Accountants, New DelhiRegistered OfficeFortis Healthcare LimitedCIN: L85110DL1996PLC076704Escorts Heart Institute and Research CentreOkhla Road, New Delhi – 110 025Tel: 91-11-4713 5000/2682 5000Fax: 91-11-26825013Website: www.fortishealthcare.comRegistrar and Transfer AgentKarvy Computershare Private LimitedKarvy Selenium Tower B, Plot 31-32 Gachibowli,Financial District, NanakramgudaHyderabad – 500 008Tel.: 040 – 67162222Website: www.karvycomputershare.com20th Annual Report 2015-163
Message from theExecutive ChairmanMalvinder Mohan SinghExecutive ChairmanDear Shareholders,It gives me immense pleasure to once again communicate with you through ourannual report for 2015-16, and I warmly acknowledge the strong association thatwe have enjoyed over the years.At the outset, I would like to thank our Vice Chairman, Mr Shivinder Mohan Singh,for his outstanding contribution to the development of our organisation, over aspan of about 15 years. I fully respect and support his decision to relinquish hisexecutive responsibilities at Fortis in order to pursue his inner calling, to offer Sewaat Beas.I would also like to formally welcome back, into Fortis, Mr Bhavdeep Singh, whotook on the reins of the organisation as CEO during the year. His vast internationalexperience in leadership positions with global organisations, coupled with hispast experience and understanding of our organisation, are an asset to Fortis,as it continues to strengthen its market position as a leader in India’s healthcarelandscape.4Fortis Healthcare Limited
Message from the Executive ChairmanImpact on SocietyA healthcare enterprise like ours has a deep and lastingimpact on the quality of the life of the citizens of its countryand their well-being. It is an established fact that a healthypopulation is able to contribute substantially in enhancingthe domestic economy and the country’s wealth. I believewe play a substantial and central role in keeping ourpopulation healthy, especially against the backdrop of theonslaught of the dual burden of disease and huge gaps inthe demand and supply of healthcare. We are privilegedto serve and alleviate the sufferings of over 25 lakh patientsfrom across the country, who come to our hospitals annually,for medical treatment. In this way, we contribute, in asignificant manner, to build a stronger and healthier India.Differentiators for FortisI would like you to know that we continue to tread thepath set forth by our vision i.e. to bring a world-classintegrated healthcare delivery system, entailing the finestmedical skills combined with compassionate patient care.These elements are the fundamental differentiators forFortis. Therefore, exceptional clinical care, patient centricdelivery, affordability and access to healthcare remain ourtouchstones and it is with this spirit that we are expandingour medical offerings.Whilst we continue to strengthen our comprehensiveofferings across a very wide spectrum of medical specialties,we are also addressing some of the critical medical needsof our country by strengthening medical programmesfocusing on Oncology, Mother & Child Health, and OrganTransplantation. We are also supporting the introductionof precision technologies and treatment options,including minimally invasive techniques and Robotics.Patient comfort, ease and speed in healing, with betterpredictability of outcomes are paramount to this endeavour,and you would be pleased to know, that we are leadingthe charge to create positive impact in this vitally importantdomain.Measuring Clinical Outcomes - Demonstrating andDelivering Value Based HealthcareOur patients are central to this theme and we believe thatthe best way forward is to consistently demonstrate howwell we are able to meet the complex and interrelatedneeds of each individual patient. We try to ensure that everypatient receives the best clinical treatment and derives truemedical value over the complete course of care that leadsWe are privileged to serveand alleviate the sufferingsof over 25 lakh patientsfrom across the country,who come to our hospitalsannually, for medicaltreatment. In this way, wecontribute, in a significantmanner, to build a strongerand healthier India.20th Annual Report 2015-165
to healing. We work towards outcomes that are bothpredictable and positive. This is made possible throughsustained, team-based efforts that deliver medicallyintegrated services and follow standard clinical pathwaysand practices.Noteworthy in assessing the quality and effectiveness of ourmedical interventions is our move to measure and publish themedical outcomes, at our hospitals. We are the first in Asia tohave adopted world leading indicators set by InternationalConsortium for Health Outcomes Measurement (ICHOM),at the Fortis Escorts Heart Institute (FEHI). The initial focusis on cardiac diseases and the ICHOM Coronary ArteryDisease Data Set being monitored at FEHI covers clinicalquality, the incidence of post-operative complications(kidney failure, heart attack, wound infections) in patientsundergoing a Coronary Artery Bypass Graft (CABG) andPercutaneous Coronary Intervention (PCI). We are happythat our data clearly shows that FEHI stands alongside thebest hospitals in the world and in many cases ahead of them,in the quality of its medical outcomes for cardiac cases.We are now working to extend this endeavor to our otherhospitals as well as other medical specialties i.e. the FortisMemorial Research Institute and Fortis hospitals at Mohali,Mulund and Bengaluru for Coronary Artery Disease (CAD);Fortis also aims to post outcomes for Kidney Transplant.I believe this is a significant step in patient empowermentand a huge move to strengthen the bond of trust betweenour hospitals and patients. It further reinforces the measureswe are taking to enhance clinical care through evidencebased protocols that also provide patients a clear view ofthe medical options available and the quality of resultsbeing achieved, so they can make informed treatmentchoices.Strategy and GrowthWe continue to deepen our India centric strategy byexpanding capacity at our existing facilities, strengtheningour clinical programmes across therapies, thereby makingthem more comprehensive by broadening our medicalofferings.Clearly, there are opportunities to create additional value.Some hospitals in our portfolio are at their peak and operateconsistently at high occupancies. Such hospitals have earnedthe right to grow and we are planning to add bed capacitythrough internal expansion i.e. by building additional6Fortis Healthcare Limitedinfrastructure at existing locations and also by mobilisingexisting warm shells. This will enable us to add 400-500 newbeds every year, for the foreseeable future.Our asset light arrangement with the Religare Health Trust(RHT), created in October 2012, further enhances thebenefits that accrue to Fortis from this model. This is becausethe expansion in both cases can be funded by the RHT.Additionally, Fortis is taking the lead to also explore andactively seek Operations & Management (O&M) contractsto expand its brand presence in India. With this, Fortis isseized of the immense possibilities of yet another growthplatform that can help us to develop upon our asset lightstrategy. Fortis has been an early pioneer in this space and isleading the way for the sector.Medical Value TravelComparing various developing countries of the world, Indiais well-positioned as a preferred destination for medicaltourism due to the presence of world class hospitals andmedical professionals. Further, superior quality healthcare,excellent clinical outcomes that can be compared withglobal benchmarks coupled with low treatment costs incomparison to other countries, is benefiting Indian medicaltourism which has, in turn, enhanced the prospects of the
Message from the Executive ChairmanIndian healthcare market. As we continue to publish thedata on our strong clinical outcomes, we will generatefurther confidence among international patients and moreof them will look to India as a preferred destination formedical treatment. India has the potential to become thehealthcare hub to the world and its prospects for growthcould rival the excellent results that we have seen for theIndian IT industry.Organ TransplantThis is an area we are extremely passionate about as it hasthe potential to bring hope to millions of lives staring ableak prognosis as a result of organ failure. The hope liesin the positive contribution that Medical science has beenable to make in this space with commendable results, thatallow individuals with even the most trying conditions, analternate route to life. However, organ donations, followingbrain death, have been abysmally low in our country.Fortis has joined hands with notable organisations like theMohan Foundation and NOTTO to educate people andchange public perceptions surrounding organ donation.We believe this is one of the most significant contributionswe can make in our journey to bring about positive socialchange that can alleviate human suffering and heal thosewho have the tiniest sliver of hope. I applaud the ceaselessefforts of our transplant teams and surgeons to create astrong culture for transplant programmes to take root. Fortishas taken a strong position to heighten awareness relatedto organ donation and its nation-wide campaign has led tolarge numbers of citizens volunteering to become organdonors.I am enthused by the over 100 heart transplants that havealready taken place at our Fortis Malar Hospital, in Chennai,which positions it as the premier centre for heart transplant,not only in India but all of Asia. This makes me believe thatthe best is yet to follow, in what is described as a gamechanger.Technological InitiativesThere are many synergies that can be generated throughthe deployment of new technologies particularly for oursizable network, and Fortis is keenly studying and deployingthem to standardise the quality of service delivery, controlcost and enhance patient engagement. We continue tostay abreast of the new developments and are leveraging,wherever possible, Digital Health Knowledge Resources,Electronic Medical Records, Mobile Healthcare Solutions,and Hospital Information Systems to create further valuein the business by adding services that enhance patientconvenience and unlock system efficiencies.We are also using tele-medicine to expand our reachexponentially. Our E-ICU brand ‘Critinext’ replicates ahigh order intensive care environment at a remote hospitalenabling us to offer 24x7 patient surveillance through acentral e-hub. At present, over 400 beds in 12 cities arebeing served via this arrangement.DiagnosticsOver the last few years, Pathology has gained prominenceas the preferred line of diagnosis for the majority of diseases.Reliable diagnosis enables evidence-based treatment,thereby offering the best treatment options to patients.The Company’s diagnostic business, SRL, continues to bea leader in diagnostics, having the largest network of 314labs with a pan-India footprint. SRL is a mass market playerand is present in all segments of pathology testing, whichincludes screening, diagnostic, predictive, preventive andmonitoring tests. SRL reaches out to over 60,000 doctors and,at an average, conducts over 125,000 tests per day. Focus onindices of efficiency, bringing in of integrated platforms,decentralisation of tests on the basis of customer demand20th Annual Report 2015-167
are the future focus areas for the Company which hold greatpromise. The Board of the Company has decided to assessand evaluate a demerger of the diagnostics business of theCompany in addition to other options that may be availableto unlock and monetise value inherent in this business.Social ConsciousnessA healthcare organisation must have a soul and its reasonfor existence must be based on public good. Fortis believesthat apart from business, we must make a worthwhilecontribution to society. We have, therefore, organisedourselves through the Fortis Charitable Foundation (FCF) torender service to society and meet our social obligations.Even as our initial area of focus is towards curative healthcare,our long term objective is to deliver programmes in the areaof preventive healthcare and improve the overall quality oflife for our stakeholders and the society.FCF has 5 primary programmesUMEED (A Child Centric Program); AANCHAL (Women’sHealth and Well-Being); SEWA (A Disaster Relief Initiative);CHHAYA (Supporting Charitable Medical Infrastructure);SAVERA (Awareness, Communication & Publications) andSPECIAL LIVES (A programme catering to special situationsthat demand a response). Just as a small example, in 201516, under UMEED alone, we supported 1178 children withCongenital Heart Defects, providing them surgical andother treatment options, which afforded them the right toa healthy and productive life. There are many more suchmeaningful initiatives that have brought a cheer to thedisadvantaged and our endeavour is to continue to extendour reach.The healthcare opportunity and building shareholdervalueThe Indian healthcare market is expected to grow at aCAGR of 16% from US 100 Billion in 2015 to reach US 280 Billion by 2020 (Source: IBEF). This would reflect inIndia’s spend on healthcare which is expected to increasefrom 4% of GDP currently to approximately 5% of GDP by2020. The growth in population, increase in lifestyle relateddiseases, rising purchasing power of the middle class andhigher awareness of chronic illnesses along with a hugeopportunity in medical value travel will be the key growthdrivers for the sector.8Fortis Healthcare LimitedAs the Indian economy grows, there will be an associatedincrease in the purchasing power of people and therewill be a demand for more value based healthcare. Withincreasing insurance penetration, healthcare will becomemore affordable for people. We will focus on expandingour clinical programmes and build more comprehensivefacilities so that we are able to serve the people betterwhile generating a higher return on investment for ourshareholders.I would like to thank the Board, our management team,members of our clinical and non-clinical staff and ourshareholders for their constant support.With my best wishes and warm regards,Malvinder Mohan SinghExecutive Chairman
Board of DirectorsDr Brian William TempestHarpal SinghMalvinder Mohan SinghPradeep Ratilal RanigaChairperson of the Audit and RiskManagement CommitteeExecutive ChairmanShivinder Mohan SinghShradha Suri MarwahChairperson of the Corporate SocialResponsibility CommitteeJoji Sekhon GillLynette Joy Hepburn BrownDr Preetinder Singh JoshiRavi Umesh MehrotraChairperson of the Nomination andRemuneration CommitteeSunil GodhwaniChairperson of the StakeholderRelationship Committee20th Annual Report 2015-169
Message from theChief ExecutiveOfficerBhavdeep SinghChief Executive OfficerDear Shareholders,It has been a little under a year since I have come back to Fortis Healthcare.However, to be very candid, it feels like I never left. I have been enthused by thepassion and dedication in our people to live our motto of “saving and enrichinglives” while also watching them go out of the way to ensure the well-being of ourpatients. I am equally excited by the possibilities that the future holds at this veryinteresting juncture in our journey.Before going any further, I would like to start by thanking Mr Shivinder MohanSingh, our Executive Vice Chairman, who made a decision to pursue a differentpath in life and stepped down from active business. While he continues to serve onthe Fortis Board, he is no longer involved with the Company on a day to day basis. Aswe all know, it is rare to witness a person at the height of professional and personalsuccess, to attend to an inner calling and devote themselves to selfless ‘Sewa’. Thistakes courage, conviction and faith in one’s larger purpose, and Shivinder has10Fortis Healthcare Limited
Message from the Chief Executive Officerdone just that. His contribution in building Fortis intothe brand it is today has been enormous, and I take thisopportunity to wish him much success and happiness in hisjourney.The year gone by has been quite noteworthy. We continueto see ongoing progress in our business on multiple fronts asthe healthcare landscape continues to change and evolve.The demand for healthcare continues to grow and we arestarting to see that while hospitals continue to grow andevolve, there are some obvious changes and shifts that aretaking place.With that said, we operate approximately 4,000 bedsand continue to invest in our medical programmes, in ourclinicians and the very latest technology. As you might beaware, Fortis started in 2001 in Mohali where 60%-70% ofour business was in Cardiac Sciences. With the emergenceof other important specialities which have grown, CardiacSciences (while it continues to be strong), has come downto about 25%-30% of our total business. So today, we havea robust and de-risked portfolio in which we also have avery sizable Orthopaedic business and a large Oncologybusiness, which is growing at a fast pace. More than 1.5million individuals are diagnosed with cancer every year,and I believe we are well-positioned to support the countryin its battle against cancer. In addition, the neuro-sciencessegment continues to grow as well. So, we are investing intechnology and in broadening the required clinical talent todrive this forward. On that note, it is worth mentioning thatwe have recently brought three or four very-very significantclinicians and some of the top practitioners in the country,and they continue to enhance our clinical operation.However, as mentioned above, there are some changes andthe one that is apparent and obvious is that the secondaryand tertiary markets continue to grow. We see that with ourhospitals and we see it with our competition.If you look at the year’s performance for the overallhealthcare and pathology businesses, both have done welland our numbers continue to grow as well. I think we areextremely well-positioned, and continue to be very-veryoptimistic about our growth prospects. As we look ahead,we feel very confident that the organisation will continueon a strong growth trajectory for the foreseeable future. Aswe think about our growth, a strong point of validation hasbeen the feedback we are getting from our patients. Wetake great pride in the fact that Fortis is doing the right thingand the brand continues to get stronger.We are extremely wellpositioned, and continueto be very-very optimisticabout our growth pr
It gives me immense pleasure to once again communicate with you through our annual report for 2015-16, and I warmly acknowledge the strong association that we have enjoyed over the years. At the outset, I would like to thank our Vice Chairman, Mr Shivinder Mohan Singh, for his outstanding contribution to the development of our organisation, over a
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Le genou de Lucy. Odile Jacob. 1999. Coppens Y. Pré-textes. L’homme préhistorique en morceaux. Eds Odile Jacob. 2011. Costentin J., Delaveau P. Café, thé, chocolat, les bons effets sur le cerveau et pour le corps. Editions Odile Jacob. 2010. 3 Crawford M., Marsh D. The driving force : food in human evolution and the future.
