Narayana Hrudayalaya : NHL 21th AGM Transcript

Narayana Hrudayalaya Limited

Transcript of proceedings of 21st Annual General Meeting

Held through Video Conference / Other Audio-Visual Means

August 27, 2021

MANAGEMENT: DR. DEVI PRASAD SHETTY - CHAIRMAN

MR. VIREN PRASAD SHETTY - WHOLE TIME DIRECTOR AND GROUP

CHIEF OPERATING OFFICER.

DR. EMMANUEL RUPERT - GROUP CEO & MANAGING DIRECTOR.

MR. KESAVAN VENUGOPALAN - CHIEF FINANCIAL OFFICER.

MR. S. SRIDHAR - COMPANY SECRETARY.

DIRECTORS:

MR. ARUN SETH - INDEPENDENT DIRECTOR.

MR. B. N. SUBRAMANYA - INDEPENDENT DIRECTOR.

MR. MUTHURAMAN BALASUBRAMANIAN - INDEPENDENT DIRECTOR. MR. DINESH KRISHNASWAMY - INDEPENDENT DIRECTOR.

MS. TERRI BRESENHAM - INDEPENDENT DIRECTOR

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Narayana Hrudayalaya Limited

Transcript of proceedings of 21st Annual General Meeting

Moderator:Dear shareholders. Good morning and a warm welcome to you all to the 21st Annual General Meeting of Narayana Hrudayalaya Limited through video conference. As a reminder for the smooth conduct of the meeting, the members will be in mute mode, and the audio and video will be switched on when they will speak at the AGM as per the pre-registration. Please note that as per the requirements, the proceedings of the annual general meeting will be recorded and available on the website of the Company. I now hand over the proceedings to Dr. Devi Prasad Shetty, Chairman of Narayana Hrudayalaya Limited. Thank you and over to you sir.

Dr. Devi Prasad Shetty: Thank you. Dear shareholders, it gives me immense pleasure to welcome you all to the 21st Annual General Meeting of your Company held through video conference facility. Pursuant to the Articles of Association of the Company, as a Chairman of the Board of Directors, I'm entitled to chair the general meeting of shareholders. Accordingly, I'm chairing this 21st Annual General Meeting. We have requisite quorum and commence the meeting and accordingly call this meeting to order.

I would now like to introduce your board members who have joined this meeting. Mr. Arun Seth

• Independent Director is joining us from U.S.A. He is the Chairman of Nomination and Remuneration Committee.

Mr. B. N. Subramanya - Independent Director joining the meeting from Bangalore. He is the Chairman of the Audit, Risk and Compliance Committee and a member of CSR Committee and also Stakeholders Relationship Committee.

Mr. Muthuraman Balasubramanian - Independent Director joining from Bangalore. He is the Chairman of Stakeholders Relationship Committee and a member of the Audit, Risk and Compliance Committee.

Mr. Dinesh Krishnaswamy - Independent Director joining from Bangalore. He is the Chairman of CSR Committee and a member of the Audit, Risk and Compliance Committee and also Nomination and Remuneration Committee.

Ms. Terri Bresenham - our new Independent Director, joining us from Boston, U.S.A. Terri has worked in GE medical division throughout her professional life and she has contributed significantly to Indian healthcare as head of Indian GE medical operations and we are very, very happy to welcome Terri as she was appointed as additional Director and in the capacity of an Independent Director on 5th August 2021.

Mr. Viren Prasad Shetty - Whole Time Director and Group Chief Operating Officer is joining from our corporate office in Bangalore.

We have a group CEO and Managing Director - Dr. Emmanuel Rupert.

Mr. Kesavan Venugopalan - Chief Financial Officer.

Mr. Sridhar - Company Secretary, joining us from our corporate office in Bangalore.

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Narayana Hrudayalaya Limited

Transcript of proceedings of 21st Annual General Meeting

Dr. Kiran Mazumdar Shaw could not join the meeting as she's traveling, and she has conveyed

	her regret.
	I would like to acknowledge the participation of the partner or authorized representative of our
	statutory auditors, Deloitte Haskins & Sells and the secretarial auditors, Ganapathi & Mohan,
	Company Secretaries.
	I now request, Mr. Sridhar - our Company Secretary to provide the general information about
	the meeting for the benefit of the shareholders participating in this meeting.
S. Sridhar:	Thank you, Chairman. Dear shareholders in compliance with the provisions of the Companies
	Act 2013, SEBI regulations, directions of the Ministry of Corporate affairs, and due to the health
	concerns and safety of shareholders arising from COVID-19 pandemic, this meeting is held
	through video conference facility.
	I would like to state that all the efforts feasible under the current circumstances have been made
	by the Company to enable members to participate and vote on the items being considered in this
	meeting. The Company has made available the facility for the shareholders to join the meeting
	through video conference on first come first serve basis. Live web streaming of this meeting is
	also being done through video conference facility provided by NSDL.
	Pursuant to the directions of Ministry of Corporate Affairs, the notice along with the Audited
	Financial Statements, Auditor's Report, Directors Report, and other information required to be
	sent to the shareholders has been sent through email to the registered email ID of the
	shareholders. For the convenience of the shareholders, SMS messages have also been sent to the
	registered mobile numbers of the shareholders for whom there was an email rejection, about the
	date and time of the 21st AGM with a link to download the annual report and the notice.
	Since the meeting is conducted through virtual means, the option of appointing proxy is not
	allowed as per the circular of the Ministry of Corporate Affairs, only the shareholders can attend
	the meeting. However, authorized representatives of corporate shareholders and institutional
	investors who have submitted the authorization resolution can attend and vote at the meeting.
	Shareholders who have not cast their vote during the remote e-voting window through the remote
	e-voting facility provided by NSDL can cast their vote during the meeting and up to 15 minutes
	after the conclusion of proceedings of the meeting by clicking on the e-voting button appearing
	on top of the VC screen. Shareholders who have already cast their vote through remote e-voting
	cannot vote again during the meeting, but can participate in this meeting.
	Shareholders who have registered themselves to speak in the meeting would be enabled to speak
	after the Chairman announces the opening of the floor for shareholders to speak. The meeting
	moderator will facilitate the shareholder speakers to seamlessly join the meeting. And when your
	name is called out, you are requested to unmute your video and audio. Shareholders can also
	post questions through the communicate tab provided at the top of the video conference screen
	anytime up to 12:15pm. The registers and documents that are required to be made available

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Narayana Hrudayalaya Limited

Transcript of proceedings of 21st Annual General Meeting

during the meeting for inspection of the shareholders, under the Companies Act 2013 are available for electronic inspection. Shareholders who want to inspect can send email to the designated email id given in the notice. I now hand over to the Chairman.

Dr. Devi Prasad Shetty: Thanks Sridhar. Dear shareholders, I hope you're keeping yourself and your loved ones safe during this pandemic. I understand, not all of you will be able to work from home and some of you will need to travel or be exposed to groups of people. If you must go out, please wear a well fitted N95 mask. Do not remove it while speaking to people and eat food by yourself or in an outdoor location away from other people. Take any vaccine that is available to you as soon as you're eligible to receive it. Please ignore WhatsApp messages from so called experts casting doubt over vaccines. All the vaccines have gone through extensive clinical trials. And the risk of vaccine complication is much less than the risk you face every day driving on Indian roads. Vaccine will protect you from severe symptoms and make you less likely to spread COVID to your family members. As a group we are vaccinated close to 16,000 of our employees and our results are extremely, extremely encouraging. I would encourage everyone to vaccinate themselves.

This pandemic has changed our world forever. The struggles of health sector have become part of media debates for over a year. Policy makers across the world realize that modern healthcare is accessible to only a small percentage of the world's population. This system was acceptable as long as poor people were dying of cancer or heart attacks in their own homes, far away from the elites. When a global pandemic like COVID-19 attacked everyone at the same time, then, rich people realized that with all their money and connection, they also need to struggle to find their bed. Healthcare is everyone's problem. If all of us are not safe, then none of us are safe.

The Indian healthcare system was struggling long before COVID-19. We are blessed to be living in a country where cost of healthcare is the lowest in the world. I left England in 1989, and the first patient I did the bypass grafting in Calcutta over 30 years ago paid Rs.1.5 lakh, 30 years later, we are doing the same operation with better outcome under the government scheme for less than Rs.1 lakh. That is okay, because all these years, hospitals used to subsidize the cost of operating on poor farmers by charging extra for rich people. Unfortunately, every organized payer is trying to lower the amount they pay for the healthcare. Central Government Health Scheme, which covers government employees who drive cars and stay in independent houses, pays hospital less rate than what a poor person has paid out of pocket, virtually by selling or mortgaging his house.

Even private insurance companies are trying to bring their prices closer to what the government pays. If nobody pays what it costs for delivering high quality healthcare, then hospitals will have no money to invest in latest equipment or pay good salaries for highly skilled doctors, nurses and paramedics. In the last five years, barely any new hospital has come up in India, especially in Tier II cities where it is desperately needed. Hospitals will thrive when people pay for the true cost of healthcare. This will encourage many new hospitals to come up, then competition will drive down the prices of healthcare.

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Narayana Hrudayalaya Limited

Transcript of proceedings of 21st Annual General Meeting

Delivering healthcare for all require a new system. India needs to have multiple financial intermediaries to pay for the health care of all sections of the society, rich and poor. Even today, nearly 60% of our patients pay for healthcare from their pocket. This must change, working class people can't all of a sudden produce a large sum of money to pay for the surgery. But they can pay small amounts of money to a financial intermediary which will pay for the surgery whenever it is needed. This is a typical model of health insurance, but the current premium for health insurance is too high for working class Indians.

Premium is high because the pool of people who buy health insurance scheme are too small. This is because people who can afford to buy health insurance premiums are rich enough to pay for the surgery out of pocket. So most of us choose not to buy insurance. Poor people in isolation are weak. But together they are very strong, 17 years ago we conceptualized the Yashaswini micro health insurance scheme for the State of Karnataka. Farmers paid just Rs.5 per month to enroll in a health scheme that paid for 700 varieties of surgeries in 400 hospitals across the State. Government of Karnataka launched a scheme through the Karnataka state cooperative societies and became reinsurer for the scheme. At the end of 10 years, 1.4 million farmers had access to all varieties of surgeries, including heart and brain surgeries for just Rs.5 per month. Yashaswini inspired other state governments to launch their own health schemes, like Aarogyasri of Andhra Pradesh, and they all eventually merged with Ayushman Bharat launched by the Central Government, which is doing an amazing contribution to the society.

Even though we conceptualized the idea of government funded health schemes, we have come to realize that this is not suitable for a poor country like India. The problem with government funding the cost of surgeries is what economists call miss aligned incentives. If the hospital is paid to do the surgery, they will do the surgery. They're not paid to keep the patient healthy, and they are not incentivized to choose a less costly medical treatment or counsel for lifestyle change. In the United States, around 10% of government spending on Medical care is fraudulent due to unnecessary billing, or patients undergoing unnecessary procedures.

You can only imagine what the situation will be in our country where most healthcare procedures aren't even electronically documented. We need a new system for providing universal healthcare. Lots of countries around the world are experimenting with population health management for their citizens. It can be called accountable care, managed care, integrated care, or health management organization but the main idea is that the government pays a provider or a group of providers a lump sum money to take over the healthcare needs of all the people living in one area. This encourages hospitals to ensure that patients are kept healthy and out of the hospital.

Your Company takes inspiration from Kaiser Permanente, the largest managed care organization in the United States of America. Kaiser foundation health plan collects premium from millions of Americans. And the Permanente medical group works 24x7 to keep their members healthy. Patients suffering from chronic diseases like diabetes are enrolled under online care management. They have over 3000 engineers building software to give their patients an Amazon like experience. We believe that this is what is required from healthcare providers. Our interest

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