DRAFT RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated September 29, 2006

(The Draft Red Herring Prospectus will be updated upon RoC filing) 100% Book Built Issue

FORTIS HEALTHCARE LIMITED
(Incorporated on February 28, 1996 under the Companies Act, 1956 as a public limited company. For details in changes of name and registered office, see the section titled “History and Certain Corporate Matters” beginning on page [●] of this Draft Red Herring Prospectus. Registered Office: Piccadily House, 275- 276, 4th Floor, Captain Gaur Marg, Srinivas Puri, New Delhi 110 065, India. Tel: +91 11 4229 5222. Fax: +91 11 4180 2121. Contact Person: Ms. Geeta Puri Seth, Company Secretary. Tel: +91 11 2682 5000, Fax: +91 11 4162 8435. E-mail: fortisipo@fortishealthcare.com. Website: www.fortishealthcare.com. PUBLIC ISSUE OF 56,666,633 EQUITY SHARES OF RS. 10 EACH (“EQUITY SHARES”) OF FORTIS HEALTHCARE LIMITED (“THE COMPANY” OR “THE ISSUER”) FOR CASH AT A PRICE OF RS. [•] PER EQUITY SHARE AGGREGATING RS. [●] MILLION (THE “ISSUE”). THE ISSUE COMPRISES A NET ISSUE TO THE PUBLIC OF [●] EQUITY SHARES OF RS. [●] EACH (“THE NET ISSUE”) AND A FIRM ALLOTMENT OF 500,000 EQUITY SHARES OF RS. [●] EACH TO THE ELIGIBLE EMPLOYEES OF THE COMPANY (“FIRM ALLOTMENT PORTION”). THE ISSUE WILL CONSTITUTE [●]% OF THE POST-ISSUE PAID UP EQUITY SHARE CAPITAL OF THE COMPANY. *
*The Company is considering a Pre-IPO Placement of up to 17,884,614 Equity Shares with certain investors (“Pre-IPO Placement”). The Company will complete the issuance, if any, of such Equity Shares prior to the completion of this Issue. If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue, subject to a minimum Issue size of 10% of the post Issue capital.

PRICE BAND: RS. [●] TO RS. [●] PER EQUITY SHARE OF FACE VALUE RS. 10 THE FACE VALUE OF EQUITY SHARES IS RS.10 AND THE FLOOR PRICE IS [●] TIMES OF THE FACE VALUE AND THE CAP PRICE IS [●] TIMES OF THE FACE VALUE

In case of revision in the Price Band, the Bidding/Issue Period will be extended for three additional working days after revision of the Price Band subject to the Bidding/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change on the websites of the Book Running Lead Managers (“BRLMs”) and at the terminals of the Syndicate. In terms of Rule 19(2)(b) of the SCRR, this being an Issue for less than 25% of the post–Issue capital of the Company, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Net Issue shall be allocated on a proportionate basis to QIB Bidders, 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above Issue price. If at least 60% of the Net Issue cannot be allocated to QIB Bidders, then the entire application money will be refunded forthwith. Further, not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue, subject to a minimum Issue size of 10% of the post Issue capital. The Company has not opted for the grading of this Issue by a SEBI registered credit rating agency. RISK IN RELATION TO THE FIRST PUBLIC ISSUE This being the first issue of the Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is Rs. 10 and the Issue Price is [•] times of the face value. The Issue Price (as determined by the Company in consultation with the BRLMs, on the basis of assessment of market demand for the Equity Shares by way of Book Building) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does the SEBI guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page [•] of this Draft Red Herring Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. We have received in-principle approval from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated [•] and [•], respectively. For the purposes of this Issue, the BSE shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE

JM MORGAN STANLEY PRIVATE LIMITED 141, Maker Chambers III, Nariman Point, Mumbai 400 021, India. Tel: + 91 22 6630 3030 Fax: + 91 22 2204 7185 E-mail: fhl.ipo@jmmorganstanley.com Website: www.jmmorganstanley.com Contact Person: Ms. Hina Israr BID/ISSUE OPENS ON

CITIGROUP GLOBAL MARKETS INDIA PRIVATE LIMITED 4th Floor, Bakhtawar 229 Nariman Point, Mumbai 400 021, India. Tel: +91 22 5631 9999 Fax: +91 22 5631 9803 E-mail: fortis.ipo@citigroup.com Website: www.citibank.co.in Contact Person: Mr. Pankaj Jain [●]

KOTAK MAHINDRA CAPITAL COMPANY LIMITED Bakhtawar, 3rd Floor, 229, Nariman Point, Mumbai 400 021, India. Tel.: +91 22 5634 1100 Fax. : +91 22 2284 0492 E-mail: fhl.ipo@kotak.com Website: www.kotak.com Contact Person: Mr. Chandrakant Bhole

INTIME SPECTRUM REGISTRY LIMITED C-13, Pannalal Silk Mills Compound LBS Road, Bhandup (West) Mumbai 400 078, India. Tel: +91 22 2596 0320 Fax: +91 22 2596 0329 E-mail: fhlipo@intimespectrum.com Website: www.intimespectrum.com Contact Person: Mr.Vishwas Attawar

ISSUE PROGRAMME BID/ISSUE CLOSES ON

[●]

TABLE OF CONTENTS SECTION I – GENERAL ............................................................................................................................. DEFINITIONS AND ABBREVIATIONS ............................................................................................... iii PRESENTATION OF FINANCIAL AND MARKET DATA................................................................xi FORWARD-LOOKING STATEMENTS.............................................................................................. xiii SECTION II – RISK FACTORS ............................................................................................................xiv SECTION III – INTRODUCTION ............................................................................................................. SUMMARY ...................................................................................................................................................1 THE ISSUE....................................................................................................................................................8 SUMMARY FINANCIAL INFORMATION ............................................................................................9 GENERAL INFORAMTION....................................................................................................................15 CAPITAL STRUCTURE...........................................................................................................................25 OBJECTS OF THE ISSUE........................................................................................................................33 BASIS FOR ISSUE PRICE .......................................................................................................................38 STATEMENT OF TAX BENEFITS ........................................................................................................41 SECTION IV – ABOUT US .......................................................................................................................... INDUSTRY..................................................................................................................................................47 OUR BUSINESS .........................................................................................................................................58 REGULATIONS AND POLICIES IN INDIA ........................................................................................95 HISTORY AND CERTAIN CORPORATE MATTERS.......................................................................98 OUR MANAGEMENT ............................................................................................................................114 OUR PROMOTERS AND PROMOTER GROUP ..............................................................................127 DIVIDEND POLICY................................................................................................................................148 SECTION V – FINANCIAL INFORMATION ......................................................................................... SUMMARY OF SIGNIFICANT DIFFERENCE BETWEEN INDIAN GAAP, U.S. GAPP & IFRS............................................................................................................................................................149 FINANCIAL STATEMENTS .................................................................................................................160 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND FINANCIAL INDEBTEDNESS.................................................................................................................... SECTION VI – LEGAL AND OTHER INFORMATION ....................................................................... OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .............................................. SECTION VII GOVERNMENT AND OTHER APPROVALS.......................................................................................... OTHER REGULATORY AND STATUTORY DISCLOSURES ............................................................ SECTION VIII – ISSUE RELATED INFORMATION ........................................................................... TERMS OF THE ISSUE................................................................................................................................ ISSUE STRUCTURE ..................................................................................................................................... ISSUE PROCEDURE..................................................................................................................................... SECTION IX – MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF THE COMPANY .. SECTION X – OTHER INFORMATION .................................................................................................. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ................................................. DECLARATION.............................................................................................................................................

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DEFINITIONS AND ABBREVIATIONS General Terms Term Description “Fortis Healthcare Fortis Healthcare Limited, a public limited company incorporated Limited,” or, “FHL”, or, under the Companies Act, 1956. “the Company”, or “or, “the Issuer” “we” or “us” or “our” Unless the context otherwise requires, Fortis Healthcare Limited, its subsidiaries, namely, Escorts Heart Institute and Research Centre Limited, Escorts Heart and Super Speciality Institute Limited, Escorts Heart Centre Limited, Escorts Hospital and Research Centre Limited, Escorts Heart and Super Speciality Hospital Limited, International Hospital Limited and Oscar Bio-Tech Private Limited. Issue Related Terms Term Allotment Allottee(s) Articles/Articles of Association Auditors BRLMs/ Book Running Lead Managers BSE Banker(s) to the Issue Bid Bid Amount Bid/Issue Closing Date Bid/Issue Opening Date Bid cum Application Form Description Unless the context otherwise requires, the issue and allotment of Equity Shares pursuant to the Issue. The successful Bidder to whom the Equity Shares are/have been issued. Articles of Association of the Company. The statutory auditors of the Company namely M/s S.R. Batliboi and Co, Chartered Accountants. Book running lead managers to the Issue, namely JM Morgan Stanley Private Limited, Citigroup Global Markets India Private Limited and Kotak Mahindra Capital Company Limited. The Bombay Stock Exchange Limited, earlier known as The Stock Exchange, Mumbai. [•]. An indication to make an offer during the Bidding/Issue Period by a Bidder to subscribe to our Equity Shares at a price within the Price Band, including all revisions and modifications thereto. The highest value of the optional Bids indicated in the Bid cum Application Form and payable by the Bidder on submission of the Bid in the Issue. The date after which the members of the Syndicate will not accept any Bids for the Issue, which date shall be notified in an English national newspaper and a Hindi national newspaper. The date on which the members of the Syndicate shall start accepting Bids for the Issue, which date shall be notified in an English national newspaper and a Hindi national newspaper. The form in terms of which the Bidder shall make an indication to make an offer to subscribe to the Equity Shares and which will be considered as the application for the issuance of Equity Shares
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Term Bidder Bidding/Issue Period Board of Directors/Board Book Building Process CAN/ Confirmation of Allocation Note Cap Price Chandigarh Society Citigroup Companies Act Cut-off Price Delhi Society Demat/Dematerialised Demat Account Depository Depositories Act Depository Participant Designated Date

Designated Stock Exchange Director(s) Draft Red Herring Prospectus

Description pursuant to the terms of the Red Herring Prospectus. Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the Bid cum Application Form. The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date inclusive of both days and during which prospective Bidders can submit their Bids, including any revisions thereof. The board of directors of the Company or a committee duly constituted thereof. The Book Building route as provided in Chapter XI of the SEBI Guidelines, in terms of which the Issue is being made. The notes, advice or intimations of allocation of Equity Shares sent to the Bidders who have been allocated Equity Shares after discovery of the Issue Price in accordance with the Book Building Process. The higher end of the Price Band, above which the Issue Price will not be finalised and above which no Bids will be accepted. The non-charitable society registered with the Registrar of Societies, Chandigarh, under the Societies Registration Act, 1860, on November 11, 1999. Citigroup Global Markets India Private Limited. The Companies Act, 1956 as amended from time to time. Any price within the Price Band finalised by the Company in consultation with the BRLMs. A Bid submitted at the Cut-off Price is a valid Bid at all price levels within the Price Band. The charitable society registered with the Registrar of Firms and Societies, New Delhi, under the Societies Registration Act, 1860, on October 21, 1981. Refers to a process by which the physical share certificates of an investor are converted into or credited as, electronic balances maintained in the investor’s account with the Depository. The account held by a Depository, in which the physical share certificates of an investor are credited as electronic balances. A body corporate registered with SEBI under the SEBI (Depositories and Participants) Regulations, 1996, as amended from time to time. The Depositories Act, 1996, as amended from time to time. A depository participant as defined under the Depositories Act. The date on which the Escrow Collection Banks transfer the funds from the Escrow Account(s) to the Issue Account(s), which in no event shall be earlier than the date on which the Prospectus is filed with the RoC. BSE for the purposes of the Issue. Director(s) of the Company, unless otherwise specified. This Draft Red Herring Prospectus dated September 29, 2006 issued in accordance with Section 60B of the Companies Act and SEBI Guidelines, which does not have complete particulars of the price at which the Equity Shares are offered and the size of the Issue. Upon filing with the RoC at least three days before the Bid/Issue Opening Date, it will be termed as the Red Herring Prospectus. It will become
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Term Eligible Employees

Eligible NRI(s) Equity Shares Escrow Account(s) Escrow Agreement

Escrow Collection Bank(s) FEMA FII

FVCI

Firm Allotment Portion First Bidder Floor Price IFRS Indian GAAP Issue

Description the Prospectus upon filing with the Registrar of Companies after the determination of the Issue Price. Such permanent employees and Directors of the Company, except any Promoters or members of the Promoter Group, present in India as on the date of the Red Herring Prospectus and as identified in the section titled “Issue Procedure-Bids by Eligible Employees” beginning on page [●] of this Draft Red Herring Prospectus. NRI(s) from such jurisdiction outside India where it is not unlawful to make a Bid in the Issue. Equity shares of the Company of face value of Rs. 10 each. Account(s) opened with the Escrow Collection Bank(s) and in whose favour the Bidders will issue cheques or drafts in respect of the Bid Amount when submitting a Bid. Agreement dated [●], to be entered into among the Company, the Registrar, the Escrow Collection Bank(s), the BRLMs and the Syndicate Members for collection of the Bid Amounts and for remitting refunds, if any, of the amounts collected, to the Bidders, on the terms and conditions thereof. The banks, which are clearing members and registered with SEBI, acting as Banker(s) to the Issue at which the Escrow Accounts will be opened, in this case being [●]. The Foreign Exchange Management Act, 1999, as amended from time to time, and the regulations framed thereunder. Foreign Institutional Investor (as defined under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995) registered with SEBI under applicable laws in India. Foreign Venture Capital Investors (as defined under the Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000) registered with SEBI under applicable laws in India. The portion of the Issue being 500,000 Equity Shares to be allotted to the Eligible Employees. The Bidder whose name appears first in the Bid cum Application Form or Revision Form. The lower end of the Price Band, below which the Issue Price will not be finalised and below which no Bids will be accepted. Generally accepted accounting principles in India. Public issue of 56,666,633 Equity Shares at a price of Rs. [•] each for cash aggregating up to Rs. [●] million under the Red Herring Prospectus and the Prospectus. The Issue comprises a Net Issue to the Public of [●] Equity Shares and a Firm Allotment Portion to the Eligible Employees of 500,000 Equity Shares. The Company is also considering a Pre-IPO Placement of up to 17,884,614Equity Shares with certain investors (“Pre-IPO Placement”). The Company will complete the issuance, if any, of such Equity Shares prior to the completion of this Issue If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will
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Term

Issue Account Issue Price JMMS Kotak Margin Amount Memorandum / Memorandum of Association/MoA Monitoring Agency Mutual Fund Mutual Fund Portion

Description be reduced from the Net Issue, subject to a minimum Issue size of 10% of the post Issue capital. Account opened with the Banker(s) to the Issue to receive monies from the Escrow Account for the Issue on the Designated Date. The final price at which Equity Shares will be Allotted in terms of the Red Herring Prospectus, as determined by the Company in consultation with the BRLMs, on the Pricing Date. JM Morgan Stanley Private Limited. Kotak Mahindra Capital Company Limited. The amount paid by the Bidder at the time of submission of his/her Bid, which may be 10% or 100% of the Bid Amount; as applicable. The memorandum of association of the Company. [●] A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996, as amended. 5% of the QIB Portion or [●] Equity Shares (assuming the QIB Portion is for 60% of the Issue size) available for allocation to Mutual Funds only, out of the QIB Portion. National Stock Exchange of India Limited The Issue less the Firm Allotment Portion. The Bidders that are neither Qualified Institutional Buyers nor Retail Individual Bidders and who have Bid for an amount more than Rs. 100,000. The portion of the Net Issue being not less than [●] Equity Shares available for allocation to Non-Institutional Bidders. A person resident outside India, as defined under FEMA and the regulations framed hereunder, as amended from time to time. A person resident outside India, who is a citizen of India or a person of Indian origin as defined under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, as amended. A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, as amended. OCBs are not allowed to participate in the Issue. Bid/Issue Closing Date or the last date specified in the CAN sent to the Bidders, as applicable. (i) With respect to Bidders whose Margin Amount is 100% of the Bid Amount, the period commencing on the Bid/Issue Opening Date and extending until the Bid/Issue Closing Date, and (ii) With respect to QIBs the period commencing on the
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NSE Net Issue Non-Institutional Bidders Non-Institutional Portion Non Residents NRI/ Non Resident Indian OCB/ Overseas Corporate Body

Pay-in Date Pay-in-Period

Term Preference Shares (Class A) Preference Shares (Class B) Price Band

Pricing Date Promoter Group

Promoters Prospectus

Qualified Institutional Buyers or QIBs

QIB Margin QIB Portion RTGS

Description Bid/Issue Opening Date and extending until the closure of the Pay-in Date. 1% redeemable non-cumulative preference shares of the Company of face value of Rs. 100,000 each. 5% redeemable non cumulative preference shares of the Company of face value of Rs. 10 each The price band with a minimum price (Floor Price) of Rs. [•] and the maximum price (Cap Price) of Rs. [•], including any revisions thereof. The date on which the Company in consultation with the BRLMs finalises the Issue Price. The following natural persons, companies, HUF’s and partnerships form a part of the Promoter group; a) Ms. Japna Malvinder Singh; b) Ms. Nimmi Singh; c) Ms. Aditi Shivinder Singh; d) Ms. Nimrita Parvinder Singh; e) Ms. Nanki Parvinder Singh; f) Mr. Anhad Parvinder Singh; g) Mr. Udayveer Parvinder Singh; h) Mr. Vivan Parvinder Singh; i) Mr. Kabir Parvinder Singh; j) Fortis Financial Services Limited; k) Oscar Investments Limited; l) Ranbaxy Laboratories Limited; m) Malav Holdings Private Limited; n) Shivi Holdings Private Limited; o) Chetak Pharmaceuticals Private Limited; p) Luxury Farms Private Limited; q) Fortis Health Staff Private Limited; r) Religare Enterprises Limited; s) Religare Securities Limited; t) Religare Finvest Limited; u) Religare Commodities Limited; v) Religare Insurance Broking Limited; w) R.C. Nursery Private Limited; x) Ranbaxy Holding Company; y) SRL Ranbaxy Limited; z) Fortis Healthworld Private Limited; aa) Vistas Realtors Private Limited bb) Greenview Buildtech Private Limited; cc) Malsh Healthcare; and dd) Oscar Traders. Mr. Malvinder Mohan Singh, Mr. Shivinder Mohan Singh and Fortis Healthcare Holdings Limited. The prospectus to be filed with the Registrar of Companies after pricing, containing, among other things, the Issue Price that is determined at the end of the Book Building Process, the size of the Issue and certain other information. Public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual funds registered with SEBI, foreign institutional investors registered with SEBI, multilateral and bilateral development financial institutions, venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, insurance companies registered with the Insurance Regulatory and Development Authority, provident funds with minimum corpus of Rs. 250 million and pension funds with minimum corpus of Rs. 250 million. An amount representing 10% of the Bid Amount submitted at the time of submission of Bid. The portion of the Net Issue being at least [●] Equity Shares available for allocation to QIBs. Real Time Gross Settlement.
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Term Refunds through electronic transfer of funds Refund Account (s) Registered Office Registrar/ Registrar to the Issue Retail Individual Bidders Retail Portion Revision Form RHP or Red Herring Prospectus

Description Refunds through electronic transfer of funds means refunds through ECS, Direct Credit or RTGS as applicable. Account(s) opened with an Escrow Collection Bank(s), from which refunds of the whole or part of the Bid Amount, if any, shall be made. Piccadily House, 275- 276, 4th Floor, Captain Gaur Marg, Srinivas Puri, New Delhi 110 065, India. Registrar to the Issue in this case being Intime Spectrum Registry Limited. Individual Bidders (including HUFs applying through their karta) who have bid for Equity Shares for an amount less than or equal to Rs. 100,000 in any of the bidding options in the Issue (including HUF applying through their kartas and Eligible NRIs. The portion of the Net Issue being not less than [●] Equity Shares available for allocation to Retail Individual Bidder(s). The form used by the Bidders to modify the quantity of Equity Shares or the Bid Price in their Bid cum Application Forms or any previous Revision Form(s). The Red Herring Prospectus dated [●] to be issued in accordance with Section 60B of the Companies Act, which will not have complete particulars of the price at which the Equity Shares are offered and the size of the Issue, including any addenda or corrigendum thereof. The Red Herring Prospectus will be filed with the RoC at least three days before the Bid/Issue Opening Date and will become a Prospectus upon filing with the RoC after the Pricing Date. Registrar of Companies, NCT Securities Contracts (Regulation) Rules, 1957, as amended from time to time. The Securities and Exchange Board of India constituted under the SEBI Act. The Securities and Exchange Board of India Act, 1992, as amended from time to time. The SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI, as amended, including instructions and clarifications issued by SEBI from time to time. The BSE and the NSE. The BRLMs and the Syndicate Members. The agreement dated [●] to be entered into among the Company and the members of the Syndicate, in relation to the collection of Bids in the Issue. JM Morgan Stanley Financial Services Private Limited and Kotak Securities Limited. The slip or document issued by any of the members of the Syndicate to a Bidder as proof of registration of the Bid.
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RoC SCRR SEBI SEBI Act SEBI Guidelines Stock Exchanges Syndicate or members of the Syndicate Syndicate Agreement Syndicate Members TRS/ Transaction Registration Slip

Term Takeover Code U.S. GAAP Underwriters Underwriting Agreement VCF/Venture Capital Fund

Description SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended. Generally accepted accounting principles in the United States of America. The BRLMs and the Syndicate Members. The agreement among the members of the Syndicate and the Company to be entered into on or after the Pricing Date. Foreign Venture Capital Funds (as defined under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996) registered with SEBI under applicable laws in India.

Industry Related Terms and Abbreviations Abbreviation IPD OPD O&M Abbreviations Abbreviation AS BPLR ECS EGM EHC EHCL EHCR EHIRC EHIRCL EHRC EHRCL EHSSH EHSSHL EHSSI EHSSIL EPS FDI FIPB FMCHL Financial year /Fiscal GDR GoI Full Form Accounting Standards as issued by the Institute of Chartered Accountants of India. Below prime lending rate. Electronic Clearing Services. Extraordinary General Meeting. Escorts Heart Centre. Escorts Heart Centre Limited. Escorts Heart Centre at Raipur. Escorts Heart Institute and Research Centre. Escorts Heart Institute and Research Centre Limited. Escorts Hospital and Research Centre. Escorts Hospital and Research Centre Limited. Escorts Heart and Super Speciality Hospital. Escorts Heart and Super Speciality Hospital Limited. Escorts Heart and Super Speciality Institute. Escorts Heart and Super Speciality Institute Limited. Earnings per share. Foreign direct investment. Foreign Investment Promotion Board. Fortis Medical Centre Holdings Limited. Period of twelve months ending March 31 of that particular year, unless otherwise stated. Global Depository Receipts. Government of India.
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Full Form In-patient department Out patient department Operation and Management

IHL IT Act LIBOR NAV NCR NCT NSDL OBPL p.a. PAN P/E Ratio PLR RBI RoNW SLR

International Hospital Limited. The Income Tax Act 1961, as amended from time to time. London Inter Bank Offered Rate. Net Asset Value. National Capital Region. National Capital Territory. National Securities Depository Limited. Oscar Bio-Tech Private Limited. per annum. Permanent Account Number. Price/Earnings Ratio. Prime Lending Rate. The Reserve Bank of India. Return on Net Worth. Statutory Liquidity Ratio.

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and thereby its subsidiaries in December 2002 and September 2005 respectively. beginning on page [●] of this Draft Red Herring Prospectus. the Company has not included a discussion of such pro forma or consolidated results in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page [●] of this Draft Red Herring Prospectus. the official currency of the Republic of India. and March 21. so all references to a particular fiscal year are to the twelve-month period ended March 31 of that year. For more information on the results of operations and financial condition of the Company. All references to “Rupees” or “Rs. The revenue of the Company is referred to herein and in the financial statements as income. which differ in certain significant respects from U. such pro forma presentation may not necessarily reflect what the consolidated financial results and condition of the Company would have been had the acquisition of EHRICL and IHL occurred at the beginning of Fiscal 2006 or what the consolidated financial results and condition will be in the future. Dollar” or “U. Dollars” are to United States Dollars. GAAP. Actual results may differ materially from those anticipated in these forward looking statements as a result of certain factors such as those set forth in the section titled “Risk Factors” beginning on page [●] of this Draft Red Herring Prospectus and elsewhere in this Draft Red Herring Prospectus. All references to “US$”. xi . Although. “U. see the section titled “Summary of Significant Differences between Indian GAAP. 2005 for EHIRCL and its subsidiaries. the official currency of the United States of America.PRESENTATION OF FINANCIAL AND MARKET DATA Financial Data Unless indicated otherwise. 2006 for OBPL. The financial statements of the Company are based on Indian GAAP. This discussion contains forward-looking statements and reflects the current views of the Company with respect to future events and financial performance. The financial statements and other financial information regarding the Company included in this Draft Red Herring Prospectus may not be comparable to the financial statements and other financial information of the Company in future periods because the acquisition of International Hospital Limited (“IHL”) and Escorts Heart Institute Research Centre Limited (“EHIRCL”). Currency of Presentation All references to “India” contained in this Draft Red Herring Prospectus are to the Republic of India. For more information on these differences. U.S.S. September 29. significantly increased the size of the Company. the financial data and other financial information in this Draft Red Herring Prospectus is derived from the restated consolidated financial statements prepared in accordance with Indian GAAP and included in this Draft Red Herring Prospectus. Because of the lack of comparable data available. the Company has included a pro forma presentation and the financial results of the acquisition of EHIRCL and the IHL for the Fiscal 2006. The fiscal year of the Company ends on March 31 of each year. The Company has only been able to include consolidated financial statements as at and for the year ended March 31. GAAP and IFRS”.S.S. see the section titled “Financial Statements” beginning on page [●] of this Draft Red Herring Prospectus.” are to Indian Rupees. 2006 for the Company and its subsidiaries since the respective dates such subsidiaries were acquired: December. 2002 for IHL.

Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. xii .Market Data Unless stated otherwise. industry data used throughout this Draft Red Herring Prospectus has been obtained from industry publications. Although the Company believes industry data used in this Draft Red Herring Prospectus is reliable. it has not been verified by any independent sources.

FORWARD-LOOKING STATEMENTS The Company has included statements in this Draft Red Herring Prospectus which contain words or phrases such as “will”. Similarly. the Company and the BRLMs will ensure that investors in India are informed of material developments until such time as the grant of trading permission by the Stock Exchanges for the Equity Shares allotted pursuant to the Issue. Important factors that could cause results to differ materially from the Company’s expectations. plans or goals are also forward-looking statements. or its Directors and officers. “objective”. “will likely result”. equity prices or other rates or prices. include. unanticipated turbulence in interest rates. regulations and taxes and changes in competition in our industry. For further discussion of factors that could cause our actual results to differ. the monetary and fiscal policies of India. All forward-looking statements are subject to risks. “plan”. deflation. uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. “should”. the Company’s ability to successfully implement our strategy. even if the underlying assumptions do not come to fruition. “intend”. “anticipate”. inflation. strategies. technological changes. among others: regulatory changes pertaining to the industries in India in which our Company has its businesses and our ability to respond to them. “seek to”. nor the members of the Syndicate. nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events. xiii . general economic and political conditions in India. which have an impact on our business activities or investments. foreign exchange rates. “estimate”. By their nature. “project”. “contemplate”. our exposure to market risks. “future”. “aim”. changes in domestic laws. that are “forward-looking statements”. see the sections titled “Risk Factors” and “Management Discussion of Financial Condition and Results of Operations” beginning on pages [●] and [•] of this Draft Red Herring Prospectus. In accordance with SEBI requirements. As a result. “believe”. Neither the Company. “expect”. “will continue”. the performance of the financial markets in India and globally. our growth and expansion. statements that describe the Company’s objectives. certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. “will pursue” and similar expressions or variations of such expressions. actual future gains or losses could materially differ from those that have been estimated. “goal”.

respectively. the failure to realize expected profitability or growth. the failure to realize expected synergies and cost savings. financial condition and prospects could suffer and the market price of our Equity Shares and the value of your investment in our Equity Shares could decline. the loss of patients or key doctors. we may also be exposed to certain additional risks.S. the diversion of management’s attention from other hospitals. prospective investors and purchasers should carefully consider all the information contained in this Draft Red Herring Prospectus. results of operations. Prior to making a decision to invest in our Equity Shares. GAAP and IFRS” beginning on pages [●]. 5. the Equity Shares should also pay particular attention to the fact that we are governed in India by a legal and regulatory environment which in some material respects may be different from that which prevails in the United States. Our acquisition in September 2005 of a 90% interest in Escorts Heart Institute & Research Centre Limited (“EHIRCL”). Any potential investors in. including the risks and uncertainties described below and the sections titled “Our Business”. the “Escorts hospitals”) and. “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and “Summary of Significant Differences Between Indian GAAP. As a consequence of the Escorts hospitals acquisition. at the time of the acquisition. our business. We may not be able to effectively manage this larger enterprise or achieve the desired profitability from the Escorts hospitals acquisition.RISK FACTORS An investment in Equity Shares involves a high degree of risk. of this Draft Red Herring Prospectus as well as other financial information contained in this Draft Red Herring Prospectus. [●] and [●]. Internal Risk Factors In the past twelve months we have more than doubled the size of our operations with the acquisition of the Escorts hospitals and we may be unable to successfully integrate these hospitals with our existing facilities or achieve the synergies and other benefits we expect from the acquisition. the European Union and other countries. significantly increased the size of our business and the scope and complexity of our operations. If any of the following risks actually occurs. xiv .10 million (the “Escorts hospitals acquisition”). a provider of private healthcare services that owns and operates three majority-owned hospitals in north India and operates and manages a fourth hospital in collaboration with the Government of Chattisgarh (collectively. U. difficulties in the assimilation of the assets and operations of the Escorts hospitals with our existing hospitals. 10 satellite and heart command centers for total consideration of Rs.850. including: • • • • • • difficulties arising from operating a significantly larger and more complex organization and expanding into new areas and territories. and purchasers of.

and. The proceedings are in various stages and the outcome is uncertain.30 million. 2005 and for which application for renewal was made on January 23.• difficulties arising from coordinating and consolidating corporate and administrative functions. should be renewed. 4. regulatory. the validity of the Escorts hospitals acquisition. which expired on March 31. among other things. the Escorts hospitals generally continue to exist as a discrete unit with their own resources. labor or other issues. 2. contractual. EHIRCL has filed an original miscellaneous petition (the “OMP”) and a civil suit in the Delhi High Court seeking both a declaration that the DDA Order is illegal and a permanent injunction restraining the DDA from dispossessing EHIRCL without due process of law. and FHL on a pro forma consolidated basis taking into account the full fiscal 2006 had total income of Rs.922. The validity of the initial merger of the societies and the subsequent incorporation as a company are now being challenged in the Delhi High Court. (ii) its corporate existence. The Delhi Development Authority (the “DDA”). and unforeseen legal. has treated both the initial merger of the societies and the subsequent conversion to a company as prohibited transfers of property under the terms of its lease of the land and. by implication. tax payments and land rights. the owner of the land on which the EHIRC hospital is located. There is significant outstanding litigation against EHIRCL and its subsidiaries involving. EHIRCL’s predecessor was a charitable society and subsequently merged with a non-charitable society in the nature of a joint stock company. is involved in significant legal proceedings challenging the application of a free treatment condition in the allotment letter in respect of the EHRC hospital site requiring the provision of free treatment to local residents of Faridabad at EHRC. If we are unable to manage the growth in our business due to the Escorts hospitals acquisition or are unable to successfully integrate the Escorts hospitals and our other hospitals. 2006. The High Court has granted a stay restraining DDA from recovering physical possession of property in both the OMP and the civil suit. In addition. employees and management. Our largest subsidiary. has terminated the lease deeds and allotment letters in respect of the land on which the EHIRC hospital is located by its order dated October 6. In addition. our ability to compete effectively and our financial results may be adversely affected. (iv) non-renewal of EHIRC’s nursing license and (v) certain income tax exemptions claimed by EHIRCL’s predecessors. EHIRCL and its subsidiaries had total income of Rs. • Moreover. and the stay is still in operation. its corporate existence. accordingly. EHRCL.88 million for fiscal 2006. EHIRCL has recently received a show cause notice from the Directorate of Health Services (the “DHS”) requiring EHIRCL to show cause why its nursing license. based in xv . EHIRCL has also filed a letters patent appeal in the Delhi High Court against an order dismissing its writ petition seeking to quash the DDA Order and stay the eviction proceedings before the Estate Officer of the DDA. although we completed the Escorts hospitals acquisition in September 2005 and have initiated the process of integrating the Escorts hospitals and our other hospitals. These matters are currently pending in the Delhi High Court. 2005 (the “DDA Order”). EHIRCL. which was thereafter incorporated as a company with limited liability under Part IX of the Companies Act. EHIRCL’s subsidiary.435. including integration of internal controls and procedures. and such litigation may materially adversely affect our operations and financial condition and could cause the value of your Equity Shares to decline significantly. (iii) the application of a condition in an allotment letter in respect of the EHIRC hospital site requiring the provision of free treatment to indigent patients at EHIRC. is involved in various significant legal proceedings challenging (i) its right to a leasehold interest on the land on which the EHIRC hospital is located.

The Supreme Court has directed a stay in the proceedings at the High Court pending final disposal of the matter. 2005. the Delhi High Court made EHIRC party to a public interest litigation (“PIL”) filed in July 2002 regarding the applicability of conditions regarding the provision of free treatment to indigent patients in hospitals located on certain plots of land allotted by DDA at concessional rates.. (a) to void the amalgamation of EHIRCL’s predecessors. and the subsequent incorporation of the amalgamated society as a limited company (i. the merger and incorporation which made EHIRCL a for-profit limited company in April and May 2000. An additional Rs. The escrow will cover the first Rs. including the re-opening of tax assessments and the raising of certain tax demands.e. Appropriate replies to the DHS notice have been sent. A civil suit has been filed by Anil Nanda.part on the cancellation of the lease deed by the DDA. amounts found to be due under the income tax proceedings may exceed the escrow amount.II. 3. including EHIRC. 2002 against the interim order of the High Court. 650. inter alia. A private plaintiff has filed a writ petition against us in the High Court of Punjab and Haryana in 2000 alleging that EHRC at Faridabad was being operated in violation of the condition in the allotment of land to provide free medical treatment.00 million of such xvi . EHIRCL) and. We filed a special leave petition in the Supreme Court on March 8. The assessing officer has also initiated penalty proceedings in respect of the re-opened assessments. respectively. In March 2004. If the plaintiff in this matter is successful. The High Court directed the State of Haryana to examine the hospital's scheme of compliance with the terms of the allotment letter. void the Escorts hospitals acquisition and (b) to restrain Escorts Limited from transferring or creating any third party rights with respect to its shares in EHIRCL. in the Delhi High Court seeking. We have filed appeals with the Commissioner of Income Tax (Appeals) . we attempted to initiate settlement discussions with the DDA but the DDA did not respond to our initial correspondence. The matter is currently pending before the High Court. 42. and the High Court is presently reviewing the status report filed by a court-appointed independent committee in respect of the compliance with free treatment conditions by 26 hospitals to which land has been allotted at concessional rates. and we may not be able to recover amounts due to us under the indemnity arrangements in the acquisition agreement relating to the Escorts hospitals acquisition. We expect the indemnity in the Escorts hospitals acquisition agreement and the escrow of a portion of the purchase price to cover approximately 47. The High Court has ordered the parties to maintain the status quo as of September 30. New Delhi and the Income Tax Appellate Tribunal and the matters are currently pending. In 2004.044. The Central Government’s Income Tax Department has re-opened certain tax assessments of EHIRCL’s predecessors.40 million has been assessed for fiscal 2003 for EHIRCL. We have also filed a writ petition in the Delhi High Court seeking to quash orders passed by the Assessing Officer. The hospital filed a scheme of compliance with the High Court to provide free medical care to residents of Faridabad who are below the poverty line.37% of the total potential tax assessment for previous periods as described above. by implication. a member of the former Delhi Society. and to make suitable corrections in operations. Delhi Society and Chandigarh Society. Although a portion of the consideration we paid in connection with the Escorts hospitals acquisition remains in an escrow account pending the resolution of the income tax matters. The Income Tax Department has assessed additional income tax payments in an aggregate amount of Rs. The matter is currently pending in the Delhi High Court.30 million for periods ranging between fiscal 1997 and fiscal 2001. Delhi Society and Chandigarh Society. and we have not made any further attempts to contact the DDA. could be annulled. as could our acquisition of EHIRCL. among others. for a declaration and permanent injunction against EHIRCL.

For more information. see the sections titled “Our Business” and “Outstanding Litigation and Material Developments” beginning on pages [ ] and [ ] of this Draft Red Herring Prospectus. or a loss of momentum in.10 million or our right to the EHIRC and EHRC hospital facilities or our right to operate our inpatient business at EHIRC. thereby adversely affecting our business and financial results. see the section titled “Our Business-Future Plans” beginning on page [ ] of this Draft Red Herring Prospectus. Our growth strategy depends on our ability to build. If we are unable to identify expansion opportunities or we experience delays or other problems in implementing such projects. lose our right to the shares in EHIRCL and its subsidiaries for which we paid Rs. These legal proceedings against EHIRCL and EHRCL may also divert management attention from our hospitals. xvii . we may not be able to recover amounts paid by us in connection therewith from the sellers. we may not have any recourse against the sellers in the Escorts hospitals acquisition. the activities of such hospitals or our other facilities. In addition. in connection with the licensing matter. acquisition candidates or hospital management opportunities. The costs and time required to integrate the new hospitals with our business could cause the interruption of. We may face challenges while renovating and rebuilding existing hospitals or re-positioning existing hospitals that we have acquired or for which we assume management responsibility. any adverse development in any of these cases or the perception of an adverse development could have a materially adverse impact on our business and our results of operations and the value of your Equity Shares could decline significantly. Any new project we undertake could be subject to a number of risks. All of these factors may adversely affect our business and growth. we may choose to fund some of these projects from the proceeds of this Issue. The number of attractive expansion opportunities may be limited. we and our personnel could also face civil and criminal liability. improve and augment our existing hospitals.850. We may be unable to secure the necessary financing to implement expansion projects. our growth. including the types of risks associated with the Escorts hospitals acquisition described above. We have several such projects pending.liability. Other than with respect to the tax litigation and the litigation brought by Anil Nanda. acquire and manage additional hospitals which may in some cases be funded from the proceeds of this Issue. respectively. We also may expand. financial condition and results of operations may be adversely affected. 5. increase our expenses and slow or prevent the integration process of the Escorts hospitals and our other hospitals and attract negative publicity. and may command high valuations. and the EHIRC hospital in particular. and the indemnity covers one-third of any amounts actually assessed in excess thereof. We may also be unable to effectively integrate such facilities with our current operations. or negotiate attractive terms for such projects. Although we may have a claim against the sellers in the Escorts hospitals acquisition for breach of warranty in the event the litigation challenging our corporate existence is resolved in a manner adverse to us. Integrating the new hospitals with our other hospitals will require significant managerial and financial resources. and are continuously evaluating other projects. We may not be able to identify suitable greenfield sites for new hospitals. Escorts Limited has recently taken action in the courts to enjoin the tax authorities from unilaterally attaching any of the escrow amounts and has added us as a party in the proceedings. Given the importance of EHIRCL to the Company. in some circumstances. If any of these matters is resolved in a manner adverse to us. we could be required to make large payments to governmental authorities or could. For more information regarding these legal proceedings. In addition.

and may otherwise curtail. We generally rely on the owners of the hospitals we operate under operations and management or maintenance (“O&M”) contracts to pay for infrastructure maintenance and upgrades at those hospitals. the quality of care at these hospitals may decline. these projects. We may not achieve the operating levels that we expect from future projects and we may not be able to achieve our targeted return on investment on. Our planned projects to build hospitals in Shalimar Bagh and Gurgaon. research opportunities and community relations. We may not compare favorably with other healthcare providers on these factors. including in some cases having signed a non-binding memorandum of understanding. nurses and other healthcare professionals. Current and potential title uncertainties regarding the lands on which our hospitals and potential acquisition targets and operation and management opportunities are or may be located. the reputation of the hospital and its owner. Our performance and the execution of our growth strategy depend substantially on our ability to attract and retain leading doctors and other healthcare professionals in the fields and regions relevant to our growth plans. The factors that doctors consider important before deciding where they will work include the level of compensation. some of which are larger in scale than any project we have attempted to date. and the reputation of all the hospitals within our network and our fee income may suffer as a result. and hospitals we operate pursuant to O&M contracts may also involve significant investment. the acquisition of other hospitals. may be altered or take longer than anticipated to complete or may exceed our cost expectations. and the scale of these projects may exacerbate any or all of the abovementioned factors. the quality of the facilities. or inability to attract or retain. Future projects may incur significant cost overruns and may not be completed on time or at all. acquire and operate new hospitals is subject to various factors that may involve delays or problems. including related litigation. We are highly dependent on our doctors. and it may be difficult to negotiate favorable terms and arrangements with them. including providers located in the United States and Europe. or intended benefits from. and we may become liable for the past activities of such businesses.Businesses that we acquire may have unknown or contingent liabilities. If these owners do not provide adequate resources for such improvements. New hospital projects are characterized by long gestation periods and substantial capital expenditures.” a report published in October 2002 by the Confederation of Indian Industry and McKinsey & Company. there is a general shortage of doctors in India. with a number of other parties to assume O&M contracts and acquire greenfield sites for hospitals outside our core regions. Moreover. Our agreements with doctors typically include mutual termination provisions with prior notice of one to six months. the building of new hospitals and other expansion opportunities. Many of these healthcare professionals are well-known personalities in their fields and regions with large patient bases and referral networks. We compete for these personnel with other healthcare providers. areas located in and around New Delhi. our ability to build. may also cause delays in. as well as other key personnel. constraints on human and capital resources. and the loss of. we are currently in various stages of negotiations. and according to “Healthcare in India: The Road Ahead. Some or all of these projects may not be undertaken or. or in some cases on the xviii . if undertaken. events or circumstances. including liabilities for failure to comply with healthcare laws and regulations. are the largest that we have yet attempted. such persons could adversely affect our business and results of operations. The market for doctors is highly competitive. the unavailability of equipment or supplies or other reasons. as well as to undertake a joint project with a state government and manage a hospital in a rural area as part of our corporate social responsibility initiative. including the failure to receive or renew regulatory approvals. In addition.

Our gross income may decrease if our O&M contracts or our contract with the Government of Chattisgarh in respect of EHCR with the other hospitals are not renewed. For example. We operate these hospitals and satellite and heart command centers under contracts for a fee. our Managing Director. We have also incurred increased costs to retain and recruit medical personnel. typically determined as compensation of one to six months. as well as positions at a limited number of other hospitals. which could have a negative impact on our results. If we are unable to attract or retain doctors or other medical personnel as required. the services of Mr. attract and retain other healthcare professionals. Such conflicts may prevent us from providing a high quality of service at our hospitals and adversely affect the level of our patient intake. In prior periods. In particular. Our arrangements with some of our doctors may give rise to conflicts of interest and timeallocation constraints and adversely affect our operations. EHIRCL maintained key man insurance policies for its former Promoters. We are also highly dependent on members of our senior management team. Naresh Trehan. including some who have been with our Company since its inception. also permit them to maintain their own private practices. The loss of the services of any of these persons would have a material adverse impact on our business. Certain of our most senior doctors may also maintain positions at local clinics or affiliations with teaching hospitals. especially at EHIRC. the Executive Director of EHIRC. are renewed on terms that are unfavorable to us or are terminated. In particular. the worldwide nursing shortage may make it difficult for us to attract and retain nurses who may choose to pursue similar opportunities abroad and may also cause salaries and wages for nurses to rise. as well as Dr. including with regard to how these doctors allocate their time and other resources between our hospitals and other clinics or hospitals at which they work and where doctors refer patients. Trehan has announced plans to build and lead several “Medicity” projects in India. Dr. Dr. In particular. primarily those who provide non-core specialty services such as dentistry and ophthalmology on a part-time basis. and our most senior doctors. which is typically an identified percentage of gross income or profits of the hospital. including nurses. subject to certain targets being reached or profits being achieved and. Mr. For further information on compensation paid to doctors and other medical professionals. his time and attention may be diverted. Even if he maintains his affiliation with EHIRC after these “Medicity” projects are completed. and we expect such costs to continue to increase in the future. but these have now all expired. our Chairman. Harpal Singh. These arrangements may give rise to conflicts of interest. Shivinder Mohan Singh. Our contracts and other arrangements with some of our multi-specialty doctors. has been crucial to the development of the Escorts hospitals. Trehan. who typically practice at individual hospitals. have been integral to the development and business of our Company. or any of our 16 satellite and heart command centers.payment of compensation to or from the doctor. in the case of certain satellite and xix . see the section titled “Our Business-Personnel” beginning on page [ ] of this Draft Red Herring Prospectus. Our performance also depends on our ability to identify. to support the multi-specialty and super-specialty practices at our hospitals. to manage our current operations and meet future business challenges. we may not be able to maintain the quality of our services and we could be forced to admit fewer patients to our hospitals. We do not own six of our 12 network hospitals.

we may not receive fees owed to us or costs borne by us in relation to the operation and management of the hospitals and satellite and heart command centers. Further. including after we have made improvements at a hospital. patients may yet favor other hospitals. stand-alone clinics and other hospitals may exert pricing pressures on some or all of our services and also compete with us for doctors and other medical professionals. If we are unable to arrange funding from third parties. For further details regarding our O&M contracts. Vasant Kunj. Recent press reports indicate that some of these competitors have also planned “Medicities” with facilities offering various levels of healthcare services. For further details. Moreover. In the case of EHCR. the Government of Chattisgarh owns the building in which the hospital operates and owns and funds the purchase of all hospital equipment. see the section titled “Our Business—Competition” beginning on page [●] of this Draft Red Herring Prospectus. xx . Smaller hospitals. at the discretion of either party or. and all operating expenses and any profits and losses from the operation of the hospital are for the account of EHIRCL. our business and financial results may be adversely affected. The loss of one or more of these contracts or the renewal of any such contract on unfavorable terms could have a material adverse impact on our results of operations. see the section titled “History and Certain Corporate Matters” beginning on page [ ] of this Draft Red Herring Prospectus. We compete with government-owned hospitals.heart command centers. hospitals owned or operated by non-profit and charitable organizations and hospitals affiliated with medical colleges. even in situations where one of our hospitals is the dominant or sole provider of healthcare in a city or region. other private hospitals. We operate in a fragmented industry and face increasing competition from other hospitals and healthcare providers. In addition. we are required to arrange funding for the hospital. Accordingly. and the owner of a hospital may terminate its relationship with us. The funds we arrange are for the account of the applicable society or trust that owns the hospital. smaller clinics. our competitors include hospitals owned or managed by government agencies and trusts. Most of the contracts may be terminated on several months’ notice. some of these competitors may be more established and have greater financial. if a dispute occurs between us and the owner of a hospital or the owner encounters financial difficulties. As we anticipate operating shortfalls at this hospital for at least the next few years. personnel and other resources than our hospitals. as well as medical teaching institutions. We will also have to compete with any future healthcare facilities located in the regions in which we operate. which may exert further pricing and recruiting pressure on us. Lt. Rajan Dhall Hospital. In particular. these relationships may not continue for the full term of the contract or may not be renewed. Some of our competitors also have plans to expand their hospital networks. in some cases. we may elect to make such loans directly to the hospital owner. a fee per procedure performed. such as ourselves. we may need to make substantial payments pursuant to these obligations. New or existing competitors may price their services at a significant discount to ours or offer greater convenience or better services or amenities than we provide. by one party if the other materially breaches its obligations under the contract. under the terms of our O&M contract for Fortis Flt. which may be able to obtain financing or make expenditures on more favorable terms than private hospitals owned and managed by for-profit interests. If we are forced to reduce the price of our services or are unable to attract patients and doctors and other healthcare professionals to our hospitals. which may have adverse effects on our competitive position and results of operations. which may adversely affect our financial results. In addition.

In addition. all of which may place us at a competitive disadvantage and limit our growth opportunities. Our financial statements for the fiscal year ended March 31. 2002 for IHL and January 3. 2003. such pro forma presentation may not necessarily reflect what our consolidated financial results and condition would have been had the Escorts hospitals acquisition. including in some cases having signed a non-binding memorandum of understanding. our business and financial results may be adversely affected. significantly increased our size. 2004. in the case of IHL. 2006 for OBPL. included in our consolidated restated financial statements are based only on management accounts prepared by SMPL's management. with most of our hospitals located in the NCR. If one or more of these hospitals joins our network. We have included consolidated financial statements as at and for the years ended March 31. As the results of SMPL. regulatory or other developments occur within north India. with a number of other parties to assume O&M contracts and acquire greenfield sites for hospitals outside our core regions. our performance at our existing super-specialty hospitals will depend in part on our ability to attract patients from regions outside north India. should adverse economic. these financial statements may not be prepared on the same basis as the financial statements of FHL and its subsidiaries and may differ from the results that would have been reported had the SMPL financial statements been audited by an independent auditor. 2006 and prior periods may be of little relevance as they will not be comparable to those for future periods because of the Escorts hospitals acquisition. Noida in September 2005 and March 2006. Sunrise Medicare Private Limited (“SMPL”) (the corporate owner of Fortis La Femme) since the respective dates such subsidiaries were acquired (or. our plans to expand throughout India subject us to various challenges. the IHL acquisition and the OBPL acquisition for the full fiscal year ended March 31. March 21. 2005 for EHIRCL and its subsidiaries. Because of the lack of comparable data available. December 20. respectively. This concentration increases the risk that. since it became a board controlled subsidiary) and SMPL became our associate: September 29. we have not included a discussion of such pro forma or consolidated results in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page [ ] of this Draft Red Herring Prospectus. 2002. 2005 and 2006 for FHL.Our hospitals are currently geographically concentrated and we may not gain acceptance or be able to replicate our business strategy successfully outside our current markets. the IHL acquisition and the OBPL acquisition. the IHL acquisition and the OBPL acquisition occurred at the beginning of fiscal 2006 or what our consolidated financial results and condition will be in the future. 2002 for SMPL. Although we have included a pro forma presentation and the financial results take into account the Escorts hospitals acquisition. our business may be adversely affected. all its subsidiaries and its associate. including those relating to our lack of familiarity with the culture and economic conditions of these new regions and our lack of brand recognition and reputation in such regions. with respect to which we hold a small minority interest. If we are not successful in expanding our hospital network. xxi . Moreover. The financial statements and other financial information regarding our Company included in this Draft Red Herring Prospectus may not be comparable to our financial statements and other financial information in future periods because the acquisition of the Escorts hospitals and Fortis Hospital. We are currently in various stages of negotiations. We currently operate hospitals primarily in north India. 2006. over whom we exercise no control. it may be more difficult for us to integrate them or capitalize on our existing brand equity with respect to these hospitals as our experience operating outside north India is limited.

we had Rs. As a result. However. especially on a temporary basis before we secure permanent financing for a new project. we may be unable to obtain sufficient financing on terms satisfactory to us. the notes to the FHL audited and restated consolidated financial statements of FHL include notes explaining that although FHL has experienced net losses that have eroded the Company's net worth. which could decline due to a variety of factors. Our significant indebtedness and the conditions and restrictions imposed by our financing arrangements may limit our ability to acquire more hospitals and increase growth. xxii . The qualifications are due to the potentially high liability to which these cases expose EHIRCL. Moreover. In addition. We expect to borrow approximately 55% of the purchase price and capital expenditures for future hospital acquisitions. our ability to attract and retain well-known and respected doctors.For more information on our results of operations and financial condition. Growth in inpatient income and increasing or maintaining occupancy rates at our hospitals is highly dependent on brand recognition. Rising interest rates may make credit more difficult to obtain. We intend to incur additional debt in the future. Our primary source of gross income is from inpatient treatments. The auditors for EHIRCL have qualified their opinion in respect of the EHIRCL financial statements. approximately 82% of which matures within the next twelve months. If these projections are inaccurate. although this ratio may vary from project to project and may be much higher. our ability to offer the most desired services in the communities in which we operate. lack of appropriate government programs and the small proportion of people in India with health insurance. we may be unable to operate as a going concern in the future. or at all. its financial statements have been prepared on a going concern basis due to management's projections of better financial performance in fiscal 2007. 2006. 5. our ability to develop “super-specialty” practices and our ability to compete effectively with other hospitals and clinics. both on a consolidated and standalone basis. as well as those of EHIRCL. much of our debt bears interest at floating rates. inpatient income and occupancy rates at our super-specialty hospitals are partly dependent on referrals from our general multi-specialty hospitals and satellite and heart command centers. In addition. see the section titled “Financial Statements” beginning on page [ ] of this Draft Red Herring Prospectus. As at March 31. are subject to significant limitations and may not provide a complete presentation of the financial condition of the Company. Our inability to increase growth in inpatient treatments or occupancy rates may adversely affect our business and results of operations. wider acceptance in the communities in which we operate. including as part of our expansion plans.984. Our gross income is dependent on inpatient income and occupancy rates. The auditor's report in respect of the FHL restated financial statements also makes note of this qualification. and provide no opinion on the impact our outstanding litigation with the DDA and Income Tax Authorities may have on the results of operations of EHIRCL. Growth in inpatient income may also be impaired by the absence of a developed health insurance sector. and this may increase the cost of our borrowings. both on a standalone and consolidated basis.61 million of total debt. Our existing operations and our acquisition and development program require substantial capital resources. our acquisition and development activities may have to be curtailed or eliminated and our financial results may be adversely affected. Our financial statements.

• • • • For further information regarding our substantial leverage and for more information about our outstanding indebtedness. capital expenditures. see the section titled “Financial Indebtedness” beginning on page [ ] of this Draft Red Herring Prospectus. the activities of businesses that are completely independent of us and that use the “Fortis” or “Escorts” name may result in a negative public perception of our hospitals. may adversely affect our reputation. and restrict our ability to make capital expenditures and investments. Infringement of the “Fortis” and “Escorts” trademarks. for which we may not have recourse. 100. We do not own the “Fortis” and “Escorts” trademarks. and is automatically xxiii . We use the name and logo under an exclusive license for the healthcare delivery business. The rights to the “Fortis” name and logo. making it more difficult for us to satisfy our obligations with respect to our debt. research and development and technology processes and other general business requirements. and the value of such intellectual property may be impaired by the actions of others. and.The agreements governing certain of our debt obligations include terms that require us to maintain certain financial ratios and comply with certain reporting requirements. of “Fortis” or “Escorts”. limiting our flexibility in planning for. or dispose of. thereby limiting our ability to take advantage of significant business opportunities and placing us at a competitive disadvantage compared to healthcare providers that have less debt. as well as the cross-acceleration of other debt. including their respective names and logos. merge with other entities. and limiting our ability to borrow additional funds or to sell or transfer assets in order to fund future working capital. undertake new projects. In addition. Failure to comply with the terms of our debt agreements or obtain waivers thereunder could result in the acceleration of some or all of the debt. change management and the boards of directors of FHL and its subsidiaries and modify our capital structure. thereby. In addition. or reacting to. Our level of indebtedness could have other important consequences. The license fee is Rs. Maintaining and enhancing the reputation associated with this intellectual property is integral to our success. Ranbaxy Holding Company. which could lead to decreased demand for our services. our use of the “Escorts” trademark may exceed our rights thereto. as well as convert the outstanding loan into equity of EHIRCL.000 per year. The license runs until April 2015. declare dividends. increasing our vulnerability to general adverse economic and industry conditions. including the respective names and logos. our business. incur further indebtedness and incur liens on. which are important assets of our hospitals and our business. including: • requiring us to dedicate a substantial portion of our operating cash flow to making periodic principal and interest payments on our debt. are owned by our affiliate. any future acquisitions. We do not own the trademarks. our assets. changes in our businesses. Certain debt agreements also provide the lenders with the right to appoint a nominee director to the board of FHL and one or more nominee or whole-time directors to the board of EHIRCL. which could adversely affect our liquidity and restrict our expansion plans.

and we may lose possession of the leased properties and related buildings and other improvements. For further details. royalty-free license to use the “Escorts” trademark in respect of medical and healthcare services and research related thereto as a part of the corporate name of EHIRCL and its subsidiaries. Title uncertainties. we may no longer be able to use the “Fortis” name and logo in connection with our business and. we may be unable to capitalize on our brand recognition. Rajan Dhall Hospital. unless terminated earlier with the consent of both parties. If the litigation in respect of EHIRC is not decided in our favor. Title records in India do not provide conclusive evidence of title. The “Fortis” name and logo have not yet been registered as trademarks by Ranbaxy Holding Company. and may otherwise curtail. including in connection with the names of the Escorts hospitals. Fortis Hospital. Any restriction on our ability to use the “Escorts” trademark could have an adverse effect on our ability to market our hospitals and could have an adverse effect on our patient volumes. including the subsidiary that owns the planned hospital in Jaipur. The name is also used by Escorts Limited and its affiliates. and we may not have the same quality of title for all portions relevant to any particular hospital. Vasant Kunj are situated and the allotment of part of the land on which Fortis Jessa Ram Hospital is situated have been cancelled and are the subject of ongoing litigation. Lt. consequently. We may not have clear title to our property. Har Parshad Company Private Limited has not objected to our use of the “Escorts” trademark in connection with our hospitals. the acquisition of other hospitals. Mohali. Some of the property for our hospitals has been acquired in fragmented portions. the building of new hospitals and other expansion plans. the allotments of the land on which the EHIRC hospital and Fortis Flt. and EHIRC. The title to our properties has not been independently verified. as well as the land on which our xxiv . At the end of the license period. which has made an application to do so. and our usage of such properties may not meet legal requirements. we may lose title to the land or have to make substantial payments to governmental agencies. Amritsar. The license has been granted by Har Parshad Company Private Limited. a company affiliated with Escorts Limited. non-exclusive. Further.renewable for a subsequent 10-year period on the same terms and conditions. see the section titled “Outstanding Litigation and Material Developments” beginning on page [ ] of this Draft Red Herring Prospectus. but could do so in the future. Leases for land on which our hospitals are located may not be renewed. the former majority-owner of the Escorts hospitals with interests in the manufacturing industry. We have a perpetual. including related litigation. and the owner is free to license the name to other parties. For further details. Fortis Hospital. Title uncertainties may also delay acquisitions of other hospitals. the building of new hospitals and other expansion plans. and title insurance is generally not available. We lease the land on which four of our six owned hospitals are located: Fortis Hospital. To date. may also cause delays in. we may be unable to recover any investments made in such hospitals and centers and may be unable to continue operating at these facilities. Noida. see the section titled “Our Business-Intellectual Property and Information Technology” beginning on page [ ] of this Draft Red Herring Prospectus. Further. in relation to the hospitals which we operate through O&M contracts. the license does not permit EHIRCL and its subsidiaries to use the trademark for any other activities or to sub-license or register the trademark. Although broad use of the Escorts trademark was contemplated in the acquisition agreement relating to the Escorts hospitals acquisition.

leaving the property vacant for a number of years. Lt. We are currently involved in litigation with the Delhi Development Authority. including delay in payment of annual rent. In the event of an adverse ruling. we may be unable to continue operations at the hospital located at the leased site. and in the future may not have (even if it were successful in claiming compensation from the DDA for the hospital building). 29. the lessors of these properties may terminate the leases early in the event of any breach of the terms of allotment. including the hospital buildings. and we could lose our investments. or transfer or assignment of land without prior consent of the lessor. If this matter is resolved in a manner adverse to the hospital. These matters are currently pending in the Delhi High Court. we may be unable to operate and manage these hospitals and recover investments made in them. the L&DO alleges.26 million we have spent on improvements to the hospital building and pre-operative expenses. 2098. including our O&M contract. In the order terminating the lease. owner of the land on which our EHIRC hospital is located. The Delhi High Court has granted a stay restraining DDA from recovering physical possession of property. Vasant Kunj and Fortis Jessa Ram Hospital are situated are also subject to litigation. Lt. usage of the property other than for the purpose for which it was allotted. The Delhi High Court has granted a stay and has restrained the L&DO from giving effect to the termination order and from recovering physical possession of property from the trust. The society filed a suit in the Delhi High Court for declaration and permanent injunction against the DDA. our O&M contract for the hospital would no longer be effective. inter alia. 350 million investment in respect of the license fee we paid to obtain the O&M rights for this hospital and the Rs. which would adversely affect our financial results. The Land & Development Office of the Ministry of Urban Development of the Government of India (the “L&DO”). Vasant Kunj is located. See the section titled “Outstanding Litigation and Material Developments” beginning on page [●] of this Draft Red Herring Prospectus for additional information regarding these proceedings. Our leases have terms that expire between January 30. the society does not currently have. Rajan Dhall Hospital. and we could lose our entire Rs. THE DDA thereafter filed an application with the Delhi High Court seeking a restraining order against the entry by the trust into agreements with third parties. which owns the land on which Fortis Flt. has terminated the lease deed in respect of such land. Rajan Dhall Hospital. The land on which the Fortis Flt. Moreover. or are perpetual. The trust has filed a suit in the Delhi High Court for declaration and permanent injunction against the L&DO. our O&M contract for the hospital would xxv .future hospitals in northwest Delhi and Jaipur will be located. located on the leased sites. If any of these leases is terminated or expires and is not renewed. which owns approximately 12% of the land on which Fortis Jessa Ram Hospital is located. the land allotted by the L&DO has been lying vacant and has been taken over by us as a result of our entry into the O&M contract with the trust that owns the hospital. The DDA. the DDA alleges that the society that owns the hospital did not use the property in accordance with the terms of the lease. we may lose title to the EHIRC hospital buildings and possession of the land on which they are located. Although the society that owns the hospital is required under the O&M contract to reimburse us for amounts invested with interest. If this matter is resolved in a manner adverse to the hospital. sufficient funds to do so. has terminated the lease deed in respect of such land.17 million we have spent on medical and other equipment and other hospital infrastructure that is not movable. 2009 and December 22. 470. If this litigation is not decided in our favor. These matters are currently pending in the Delhi High Court. In the order terminating the lease. See the section titled “Outstanding Litigation and Material Developments” beginning on page [●] of this Draft Red Herring Prospectus for additional information regarding these proceedings. as well as the portion of the Rs.

Fortis Flt. believes that a nursing license is deemed granted upon receipt of an application therefor by the DHS unless it is refused by the licensing authorities. based in part on the cancellation of the lease deed by the DDA. registrations and other approvals and renewals thereof required in the ordinary course of our business. the hospital would be banned from performing inpatient procedures at the hospital. an application for renewal of the Fortis Jessa Ram Hospital's nursing license was filed in January 2006. which expired on March 31. and this may have a material adverse effect on our financial results. as well as an order from the DHS to cease operations of its inpatient department. Although the charitable society that owns the hospital is required under the O&M contract to reimburse us for these amounts with interest in such an event. as well as the portion of the Rs. registrations and other approvals see the section titled “Government and Other Approvals” beginning on page [ ] of this Draft Red Herring Prospectus. our xxvi . If we do not receive such approvals. we may be operating without all the required permissions. the hospital would be banned from performing inpatient procedures at the hospital. but to date. Although we may have a breach of warranty claim under our O&M contract with the trust that owns the hospital. 470. Without a nursing license. In addition. The hospital has received a show cause notice from the DHS that it is operating in violation of the licensing requirement. and in the future may not have (even if it were successful in claiming compensation from the DDA for the hospital building). Without a nursing license.26 million we have spent on improvements to the hospital building and pre-operative expenses. If the hospital fails to obtain a nursing license. Rajan Dhall Hospital. 29. For further details on these licenses. Vasant Kunj applied for a nursing license in March 2006 and commenced operations in May 2006 prior to obtaining the nursing license based on a deemed license. In some cases. 350 million investment in respect of the license fee we paid to obtain the O&M rights for this hospital and the Rs.no longer be effective. and we could lose all or some of our investment in the infrastructure of the hospital. EHIRCL has recently received a show cause notice from the Directorate of Health Services (the “DHS”) requiring EHIRCL to show cause why its nursing license. and the failure to obtain these approvals in a timely manner or at all may materially adversely affect our operations. We have applied for but have not received certain licenses. it would no longer be able to perform inpatient procedures at the hospital. in which the trust represented to us that it was operating in compliance with all agreements and deeds. and we could lose our entire Rs. the society does not currently have. As described above. and even if such a claim were successful. If this matter is resolved in a manner adverse to the hospital. registrations and other approvals and renewals required in the ordinary course of our business as a result of the expiration of existing approvals. sufficient funds to do so. We have yet to obtain certain licenses. Appropriate replies to the DHS notice have been sent. If this matter is resolved in a manner adverse to the hospital. based on an independent legal opinion.17 million we have spent on medical and other equipment and other hospital infrastructure that is not movable. 2005 and for which application for renewal was made on January 23. The society that owns the hospital has filed appropriate replies to the show cause notice and order and. the trust may not have sufficient funds to compensate us in full or at all. the hospital has not received a renewal. The existing nursing license expired in March 2006 and the hospital is currently operating without a valid nursing license. we may be unable to offer certain of our services or may be required to discontinue operations at one or more hospitals. risking civil and criminal sanctions. 2006. we may not be successful in bringing any such claim. our O&M contract for the hospital would no longer be effective. should be renewed. Lt.

discharge of pollutants to air and water and handling and disposal of bio-medical. rules and regulations governing. Any such costs could adversely affect our competitive position and results of operations. maintenance and security issues associated with health-related information and medical records. qualifications of medical and support personnel. We and our personnel in control positions and. we may have to pay fines. but commenced hospital operations only in 2001. and we could lose our entire investment in respect of the hospital. radioactive and other hazardous waste. Any public interest or class action legal proceedings related to such safety. we acquired the Escorts hospitals only in September 2005. In addition. in the case of the matters relating to O&M contract hospitals. We were founded in 1996. confidentiality. We have incurred cumulative restated consolidated net losses of approximately xxvii . For more information on the regulations applicable to us. environmental and other governmental regulations may be costly and adversely affect our competitive position and results of operations. and screening. We have limited experience in operating the facilities we acquired in that transaction and in the operations and management of hospitals in general. incur additional operating costs or make capital expenditures. health. adequacy of medical care. We are subject to central and local laws. including conditions in the permits required for our operations. the: • • • • • • • • conduct of our operations. If we are held to be in violation of such regulatory requirements. by courts or governmental agencies. modify or discontinue our operations. health and environmental laws and regulations in India are stringent and it is possible that they will become significantly more stringent in the future. quality of medical equipment and services. we have a limited history of operations upon which you can evaluate us or our prospects.O&M contract for the hospital would no longer be effective. Compliance with applicable safety. the owners of such hospitals and their personnel in control positions could also face civil and criminal sanctions in connection with the operation of these hospitals in the absence of a nursing license. stabilization and transfer of patients who have emergency medical conditions. see the section titled “Regulations and Policies” on page [ ] of this Draft Red Herring Prospectus. and we have incurred net losses to date and may incur additional net losses in the future. among other things. health or environmental matters could also result in the imposition of financial or other obligations on us. Safety. As a result. We have a limited history of operations. additions to facilities and services.

and legislation that imposes certain financial obligations on employers upon retrenchment. where our doctors consult with each other and patients via advanced video conferencing arrangements. Rapid technological advances. medical records and inventory. and may increase our costs and adversely affect our business. The net losses for both FHL and EHIRCL and its consolidated subsidiaries increased significantly in fiscal 2006. Corruption of certain information could also lead to delayed or inaccurate judgments or diagnoses in our treatment of patients and could result in damage to the welfare of our patients. We use sophisticated and expensive medical equipment in our hospitals to provide services. Replacement of equipment may involve significant costs. our ability to provide services to our patients may be impaired. and. including devices required for super-specialty procedures such as the Da Vinci Robotic System. who are not compensated by us. We are also party to legal proceedings in 23 labor matters pending in various courts. we may be subject to liability as the result of any theft or misuse of personal information stored on our systems. 1. xxviii . Any technical failures associated with our information technology systems. We also rely on our information technology systems to practice telemedicine.Rs. including those caused by power failures and computer viruses and other unauthorized tampering. we may not maintain back-up equipment. and we may be subject to labor unrest. 2006. Some of our employees are unionized. In addition. Our information technology systems are a critical part of our business and help us manage clinical systems. which may create conflicts of interest. technological failures and other challenges related to our medical equipment could adversely affect our business. unless and until admissions grow at these hospitals.37 million. built or managed hospitals typically incur net losses during the initial years of operations. We are vulnerable to failures of our information technology systems. because of the high costs of medical equipment. as well as foreign currency risks. As of March 31. we may be required to make payments to compensate former and current employees and other personnel. 57 of which were members of labor unions. which could adversely affect our business. slowdowns and increased wage costs.206. if such equipment is damaged or breaks down. In addition. If more of our personnel or personnel of our O&M contract hospitals unionize. If these cases are not decided favorably. Our Promoters and our Promoter Group have equity interests in affiliated companies that manufacture products and offer services that are related to our business. our newly acquired. may cause interruptions in our ability to provide services to our patients. it may become difficult for us to maintain flexible labor policies. We may incur additional losses in the future. since some equipment is imported from other countries. Medical equipment often needs to be replaced frequently as innovation can rapidly make existing equipment obsolete. In addition. therefore. dispute resolution and employee removal. India has stringent labor legislation that protects the interests of workers.535 personnel (including doctors and other personnel who act as independent contractors). we had 4. This does not include the 55 unionized employees at our Fortis Jessa Ram Hospital. including legislation that sets forth detailed procedures for the establishment of unions.

Our Promoters and our Promoter Group have equity interests or other investments in other companies and trusts that manufacture products and offer services that are related to our business. So long as our Promoters own a majority of our Equity Shares. the payment consideration for which we financed through equity contributions from the Promoter Group. we share members of management and key employees and other resources and office space with these affiliated companies. none of the Promoters or members of the Promoter Group is obligated to direct any opportunities in the healthcare industry to us. our Promoters will hold approximately 68. The valuation for such asset contributions has been based on book value. the Promoters will take up such Equity Shares. In the past. our business strategy and policies. we may be unable to obtain future funds from lenders on favorable terms or at all without such support. After the completion of the Issue. such as Ranbaxy Laboratories Limited. which manufactures pharmaceuticals. our Promoters and our Promoter Group have undertaken projects. business combinations and acquisitions or dispositions of assets. There may be conflicts of interest in addressing business opportunities and strategies in circumstances where our interests differ from other companies in which one or more of our Promoters or one or more members of our Promoter Group has an interest. as well as improvements to our existing hospitals and other business requirements. which may be important for our growth the in the future. In some cases.09% of our paid up Equity Shares capital. which offers diagnostic laboratory services. including the appointment and removal of our officers. however. and Fortis Healthworld Private Limited. which trains nurses. as well as increased income from operations as our existing hospitals mature. SRL Ranbaxy Limited. Noida. None of our Promoters or the members of our Promoter Group has undertaken to refrain from competing with our business. in the event any Eligible Employee is allotted Equity Shares in the Firm Allotment Portion and does not take up such Equity Shares. Further. We have historically depended on guarantees and share pledges provided to our lenders by our Promoters and our Promoter Group in order to help fund our acquisitions and other expansion projects. they will be able to elect our entire Board of Directors and control most matters affecting us. which operates pharmacies. and without such support our expansion plans may be curtailed. as they may already have interests in other similar businesses. new business opportunities may be directed to these affiliated companies instead of our Company. xxix . independently of us and later sold such projects to us. and the percentage of Equity Shares held by our Promoters will increase. In addition. Fortis Health Staff Private Limited. Our Promoters will hold a majority of our Equity Shares after the Issue and can therefore determine the outcome of any shareholder voting. In addition. Our Promoters and our Promoter Group may also keep us from entering into certain businesses related to our own. such as Fortis Hospital. any determinations with respect to mergers. our dividend policy and our capital structure and financing. the extent of the Promoters’ shareholding in our Company may result in the delay or prevention of a change of management or control of our Company. Future projects developed by our Promoters and our Promoter Group may not be contributed to us or may be contributed on different terms and conditions than in the past. Although we expect that in the future such forms of credit support will be unnecessary in light of our improved liquidity due to the completion of the Issue. which may divert management attention and resources away from our business and create conflicts of interest. The Promoters and other members of the Promoter Group have not committed to provide such forms of credit support on a going-forward basis. even if such a transaction may be beneficial to our other shareholders.

our directors and management will have significant flexibility in applying the proceeds received by us from the Issue. could negatively impact the market price of our Equity Shares. Our financing plans assume a debt to equity ratio of 1. pay Issue-related expenses and for general corporate purposes. Any future issuance of our Equity Shares by us. We have not entered into definitive agreements to utilize any of the net proceeds of the Issue. 20% of our post-Issue paid-up capital held by certain of our Promoters will be subject to such selling restrictions for a period of three years. (approximately 80. build new hospitals. We have not entered into definitive agreements to utilize any of the net proceeds of the Issue and our expansion plans have not been appraised. which may also adversely affect the market price of our Equity Shares.00. approximately. may dilute the positions of investors in our Equity Shares. Accordingly. which could adversely affect the market price of our Equity Shares. In addition. Any unanticipated increase in the cost of our intended expansion plans could adversely affect our estimates of the cost of such expansion. There is other outstanding litigation against us and we may become subject to additional litigation in the future which may adversely affect our reputation and competitive position.25:1. We intend to use the net proceeds of the Issue to repay short-term indebtedness. Sales of a large number of our Equity Shares by our Promoters. redeem the 26. Any such future issuance of Equity Shares. Our expenditure plans are based on management estimates and have not been appraised by any bank or financial institution or any other independent organization. Upon completion of the Issue. including possible cost overruns and changes in our management’s views of the desirability of our current plans. see the section titled “Capital Structure” beginning on page [●] of this Draft Red Herring Prospectus.Your holdings may be diluted by additional issuances of Equity Shares. 2006 at a premium of Rs. although this could change in the future depending on market conditions and other factors. We intend to issue Equity Shares in the future in order to help fund acquisitions and other expansion plans. all Equity Shares that are outstanding prior to the Issue (including the Equity Shares to be sold in the planned Pre-IPO Placement and the Equity Shares issued in the Firm Allotment Portion to Eligible Employees). our expenditure plans are subject to a number of variables. For further information relating to such selling restrictions. including pursuant to our pending Pre-IPO Placement. see the section titled “Objects of the Issue” beginning on page [●] of this Draft Red Herring Prospectus. as well as our liquidity and financial position. In addition. For further information. or the possibility of such sales. 90. xxx . and we may not be able to conclude definitive agreements for such investments on terms favorable to us or at all.000. or sales of Equity Shares by our Promoters. 10 each issued to FHHL on September 26. including indebtedness related to the Escorts hospitals acquisition.22% of our post-Issue paid-up equity) will be subject to selling restrictions for a period of one year from the date of allotment of Equity Shares in the Issue. also could adversely affect the market price of our Equity Shares. including pursuant to the exercise of stock options under any future employee stock option scheme or any other similar scheme in the future.000 Preference Shares (Class B) of Rs. or the possibility of such sales. as well as improvements to our existing hospitals and other business activities. Such Equity Shares also may be issued at prices below the then-current market price.

For more information regarding legal proceedings. In the event that any of these contingent liabilities materialize. among other things. Moreover. Liabilities may exceed our available insurance coverage or arise from claims outside the scope of our insurance coverage. 5 million. which could have an adverse impact on our business and financial results. see the section titled “Our Business-Insurance” on page [ ] of this Draft Red Herring Prospectus. and adverse orders. medical negligence and product liability for medical devices we use or pharmaceuticals we dispense. xxxi .There are 117 cases in various courts and agencies pending against us and our subsidiaries concerning allegations of medical negligence at our hospitals and by our healthcare professionals. we may not be indemnified against losses that arise from the acts or omissions of our employees at the hospitals. As of March 31. Claims under the laws in such foreign countries may expose us to far greater liability than exists in India. there is no guarantee that the hospital owners will have the resources to pay any indemnity owed to us. For further information. including claims against us outside of India. we may be required to make substantial payments and our financial condition and results of operations may be adversely affected. contingent liabilities not provided for and appearing in our consolidated restated financial statements aggregated Rs. From time to time. several of our O&M contracts do not expressly require the hospital owner to maintain insurance coverage. including as a result of certain litigation. and we may not have adequate insurance to cover such liability. our financial condition may be adversely affected. respectively. 457. Our insurance coverage also may be inadequate. and if our insurance coverage or any applicable indemnity is insufficient to cover the damages awarded. These included liabilities relating to medical negligence claims and various corporate and bank guarantees. including 10 cases where the amount claimed as damages or otherwise is more than Rs. 2006. If any of our current cases or future cases are not resolved in our favor. In addition. please see note 13 to our restated consolidated financial statements in the section titled “Financial Statements” beginning on page [●] of this Draft Red Herring Prospectus. We may not have adequate insurance coverage for our current or future litigation. We have certain contingent liabilities. If our arrangements for insurance or indemnification are not adequate to cover claims. we have commenced provision of medical services to patients resident outside India. judgments or other resolutions in such cases may adversely affect our financial condition and results of operations. In addition. We are exposed to potential liability risks that are inherent in the provision of healthcare services. including countries such as the United Kingdom. we may be required to make substantial payments or modify or restrict our operations. For more information. Although the owners under most of the management contracts with hospitals we do not own are responsible for the costs and liabilities incurred by the hospital.74 million. we may be subject to additional litigation alleging. Damages awarded by Indian law and Indian courts may vary and tend to be unpredictable. including in the case of claims exceeding policy aggregate limitations or exceeding the resources of the indemnifying party. which may adversely affect our financial condition. see the sections titled “Outstanding Litigation and Material Developments” and “Our Business—Legal Proceedings” on pages [ ] and [ ] of this Draft Red Herring Prospectus.

89 (3.62) 52.31 26. and can be further affected by a number of factors.18) (0.05) (3. At March 31.49) (116.90) (65.90) 0. (audited) Name of the Subsidiary 2004 (60. Interest rate fluctuations can be highly unpredictable.73 2.12 (0.24) (0.44) -(3. 2004 and 2005 (in respect of companies in the Promoter Group). 2004. some companies in the Promoter Group have also incurred losses. millions) (1.75) 74.C. approximately 26% of our outstanding debt was subject to interest payments based on floating rates. Some of our subsidiaries and companies in the Promoter Group have incurred losses in the years ended March 31. which may adversely affect our financial results. which may adversely affect our results of operations.01) (0.55) 2005 (8.49) (6.22) (0.A significant portion of our outstanding debt is subject to fluctuations in interest rates.86 -(0.10) 3. which are not expected to have a negative impact on our business.26) (20.56) Fortis Healthcare Holdings Limited Fortis Financial Services Limited Malav Holdings Private Limited Shivi Holdings Private Limited Luxury Farms Private Limited Fortis HealthStaff Private Limited Religare Enterprises Limited Religare Securities Limited Religare Commodities Limited R. including global economic trends and adverse events in the global financial markets.72) (0. as set forth below: Subsidiaries that have incurred losses: Profit (loss) in the year ended March 31.55) xxxii 2004 (Rs.17 (0. Some of our subsidiaries have incurred losses. We have not invested in any instruments to hedge against interest rate risk. 2005 and 2006 (in respect of our subsidiaries) and March 31. (audited) Name of the Company in the Promoter Group 2003 (0.77 3.90 (1.91) 2006 (141.68) (10.35) 0.45) (0.00 (0. millions) (57.49) (4. 2003.79) -2005 (Rs. In addition.34) (15. 2006. Nursery Private Limited .01) 0.67) Escorts Heart and Super Specialty Institute Limited Escorts Heart Centre Limited Escorts Hospital and Research Centre Limited International Hospital Limited Companies in the Promoter Group that have incurred losses: Profit (loss) in the year ended March 31.40) 4. Our failure to effectively manage our interest rate risk sensitivity could result in increased debt service costs and adversely affect our results of operations.00 (38.

01) 79. These proceedings are pending at different levels of adjudication before various courts. therefore. do not intend to declare dividends on our Equity Shares in the foreseeable future. We have in the last 12 months made the following issuances of Equity Shares to the Promoters and other persons and at a price which may be lower than the Issue Price: Date of Allotment and Date on which Fully Paid Up February 10. see the section titled “Capital Structure” on page [ ] of this Draft Red Herring Prospectus. contractual restrictions. 2006 Number of Equity Shares 520.97 0. applicable Indian legal restrictions and other factors considered relevant by the board of FHL. Our directors. We have in the last 12 months issued Equity Shares at a price which may be lower than the Issue Price. subsidiaries. Promoters and the Promoter Group. Promoters and members of the Promoter Group. Nevertheless. subsidiaries. 2005* Preferential Allotment March 31. tribunals. For more information regarding legal proceedings against our directors. and we may not pay dividends in the future.000 10 10 For more information on such issuances.000 Issue Price - Consideration 10 Reasons for Allotment Allotment to the shareholders of erstwhile FMCHL pursuant to order of the Delhi High Court dated October 7. capital requirements and surplus. Promoters and members of the Promoter Group are parties to certain legal proceedings initiated by or against such parties. and appellate tribunals.SRL Ranbaxy Limited (20.200. general financial conditions.83 We currently do not intend to pay dividends. see the section titled “Outstanding Litigation and Material Developments” beginning on page [●] of this Draft Red Herring Prospectus. we may pay dividends in the future. earnings. enquiry officers. There are certain legal proceedings against our directors. Our ability to pay dividends is also subject to restrictive covenants contained in financing and loan agreements governing indebtedness we and our subsidiaries have incurred or may incur in the future. We currently intend to retain all of our earnings to finance the development and expansion of our business and. and such payments will depend upon our results of operations. xxxiii . subsidiaries. 2006 85.

including. In addition. We believe that the key ongoing industry-wide challenges are providing quality patient care in a competitive environment and managing costs. including the recent terrorist attack in Mumbai. Challenges that affect the healthcare industry may also have an effect on our operations. healthcare.External Risk Factors Our business could be adversely impacted by economic. These economies could be adversely affected by various factors. including us. commodity and energy prices and various other factors. our business and results of operations may also be affected by other factors that affect the entire industry. heightened security and policing activities. the patient volumes and operating income at our hospitals are subject to economic and seasonal variations caused by a number of factors. Any slowdown in these economies could adversely affect the ability of our patients to afford our services. climate and weather conditions. in the past. been prone to terrorist activities and. which has. In particular. seasonal cycles of illness. the business environment of local communities. and physician recruitment. natural calamities. but not limited to: • • • • • • unemployment levels. xxxiv . both nationally and regionally. Our performance and growth are dependent on the state of the Indian economy and in particular the economies of the regional markets we currently serve. interest rates. consequently. such as political and regulatory action including adverse changes in liberalization policies. Any failure by us to effectively face these challenges could have a material adverse effect on our results of operations. the number of uninsured and underinsured patients in local communities. We are impacted by the challenges currently facing the healthcare industry. or reduce the demand for. retention and attrition. we are currently operating a hospital in the state of Jammu & Kashmir. demographic changes. such as: • • • • technological and pharmaceutical improvements that increase the cost of providing. general economic and business conditions. social disturbances. and changes in the distribution process or other factors that increase the cost of supplies. political and social developments in India and particularly in the regional markets that we serve. In particular. which in turn would adversely impact our business and financial performance and the price of our Equity Shares. terrorist attacks and other acts of violence or war.

Prior to the Issue. the performance of the Indian and global economy and significant developments in India’s fiscal regime. in some cases significantly. future sales of Equity Shares by current shareholders may cause the price of the Equity Shares to decline. settlement delays and strikes by brokerage firm employees. The Indian securities markets are smaller than the securities markets in the United States and Europe and have experienced volatility from time to time. particularly emerging market countries in Asia and certain other countries. there has been no public market for our Equity Shares. Although economic conditions are different in each country. Financial disruptions may occur again and may harm our business. volatility in the Indian and global securities markets. Our stock price may fluctuate after the Issue and. indirectly. Under the SEBI Guidelines. brokers and other participants differ. Even after the Equity Shares have been approved for listing on the Stock Exchanges. and a market with adequate liquidity may not develop. Indian markets and the Indian economy are influenced by economic and market conditions in other countries. Volatile conditions in the Indian securities market may affect the price or liquidity of the Equity Shares. an active trading market for the Equity Shares may not develop or be sustained after the Issue. political and social factors. which. A loss of investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and. investors’ reactions to developments in one country can have adverse effects on the securities of companies in other countries. we are permitted to allot Equity Shares within 15 days of the closure of a public issue. including our results of operations and the performance of our business. in the Indian economy in general. Consequently. you may lose a significant part or all of your investment. Indian stock exchanges have experienced problems. if those or similar problems were to continue or recur. from those in the United States and some European countries. You can begin trading in the Equity Shares only after they have been credited to your dematerialized account and listing and trading permissions have been xxxv . as a result. the Equity Shares you purchase in the Issue may not be credited to your dematerialized account with Depository Participants until approximately 15 days after the issuance of the Equity Shares. Any worldwide financial instability could also have a negative impact on the Indian economy. our business and the price of our Equity Shares may be adversely affected. our future financial performance and the price of our Equity Shares. particularly emerging market countries in Asia and other countries. including the Equity Shares. including India. could adversely affect the market price and liquidity of the securities of Indian companies. The trading price of our Equity Shares may fluctuate after the Issue due to a wide variety of factors. broker defaults. You will not be able to sell immediately on an Indian stock exchange any of the Equity Shares you purchase in the Issue. competitive conditions and general economic. The Issue Price will be determined by us in consultation with the BRLMs and may differ significantly from the price at which the Equity Shares will trade subsequent to completion of the Issue. the overall market for healthcare services. The regulation and monitoring of the Indian securities market and the activities of investors. including temporary closures. If financial instability occurs in certain countries.There is no existing market for the Equity Shares. In addition.

S. [●] per Equity Share aggregating Rs. any decline in the value of the Indian Rupee relative to the U. FHL. 67. During the last five years. Final trading permissions may not be received from the Stock Exchanges. or to operating losses caused by increases in costs denominated in U. respectively. 0. Dollars and Euros.56 million. we had a U. 2006. Oscar Investments Limited.received from the Stock Exchanges.44 million. 5% of the QIB Portion shall be available for allocation to xxxvi • .S. Equity Shares of a listed Promoter Group company are infrequently traded on the Stock Exchanges.614 Equity Shares with certain investors (“Pre-IPO Placement”). such as U. of such Equity Shares prior to the completion of this Issue. In the year ended March 31. see the section titled “Our Promoters and Group Companies” beginning on page [ ] of this Draft Red Herring Prospectus. [●] each to the Eligible Employees. The Issue would constitute [●]% of the post issue paid-up equity share capital of the Company. EHIRCL and its subsidiaries and IHL had total expenses (including capital expenditures) denominated in currencies other than Indian rupees of approximately Rs. the Equity Shares allocated to you may not be credited to your dematerialized account and trading in the Equity Shares may not commence within the time periods specified above. In addition.000 Equity Shares of Rs. The Company is considering a Pre-IPO Placement of up to 17. In terms of Rule 19(2)(b) of the SCRR. The Issue comprises a Net Issue to the public of [●] Equity Shares of Rs.884.S. The Company will complete the issuance.633 Equity Shares for cash at a price of Rs. These were predominantly in U. dollars. if any.14 million.40 million and Rs. 2006. increases in interest expense or exchange losses on fixed obligations and indebtedness denominated in currencies other than Indian Rupees.666. this being an Issue for less than 25% of the postIssue capital. the equity shares of our listed Promoter Group company. Our gross income is denominated substantially in Indian Rupees and a part of our operating expenses. Exchange rate instability may adversely affect our financial condition and results of operations. [●] million. such as medical equipment and interest and principal obligations under the terms of our debt payments are denominated in. 18. or linked to. We face exchange rate risks to the extent that our expenses and debt repayments are denominated in currencies other than Indian Rupees. have been infrequently traded. dollar or other currencies may lead to a decrease in our profit margins.S. Notes to Risk Factors • Public Issue of 56. As we do not hedge against exchange rate fluctuations. If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue.S. dollars and other currencies. [●] each and a Firm Allotment Portion of 500. dollar-denominated loan outstanding in a principal amount of USD 6. as of March 31. Rs. For further details on our group companies. currencies other than Indian Rupees. the Issue is being made through the 100% Book Building Process wherein at least 60% of the Net Issue shall be allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”). subject to a minimum Issue size of 10% of the post Issue capital.

Further. see the section titled “Issue Structure” beginning on page [●] of this Draft Red Herring Prospectus. Further 500. 2600 million share application money) as of March 31.4. 3419. investors are free to contact the BRLMs. 10 each was Rs. not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders. The net worth of the Company was Rs.24% of the paid-up Equity Share capital of the Company and 100% of the Preference Share (Class B) capital. 2006 as per its restated unconsolidated financial statements under Indian GAAP. • • • • • • xxxvii . subject to valid Bids being received at or above the Issue Price. see the section titled “Financial Statements” beginning on page [●] of this Draft Red Herring Prospectus. Investors are advised to see the section titled “Basis for Issue Price” beginning on page [●] of this Draft Red Herring Prospectus. subject to valid Bids being received at or above the Issue Price. Directors and key managerial personnel. 2006 as per the restated unconsolidated financial statements under Indian GAAP. then the entire application money with be refunded forthwith. The Promoter Group holds 99.82 as of March 31. Investors may contact the BRLMs and the Syndicate Members for any complaints pertaining to the Issue.10.09. The average cost of acquisition per Equity Share to the Promoter Group is Rs. who will be obliged to provide such clarification or information to the investors.Mutual Funds only and the remaining QIB Portion shall be available for allocation to the QIB Bidders including Mutual Funds. subject to valid Bids being received at or above the Issue Price. For information on the interests of Promoters. For any clarification or information relating to the Issue. other than reimbursement of expenses incurred or normal remuneration or benefits. • • The book value per Equity Share of Rs. The Promoter Group does not hold any portion of the Preference Share (Class A. For further details. For information on related party transactions.93 million (including Rs. see the section titled “Our Management” beginning on page [●] of this Draft Red Herring Prospectus. If at least 60% of the Net Issue cannot be allocated to QIBs.000 Equity Shares shall be allotted to Eligible Employees in the Firm Allotment Portion.

5. a provider of private healthcare services that owns and operates three majority-owned hospitals in north India and operates and manages a fourth hospital in collaboration with the Government of Chattisgarh (collectively. a “boutique” style hospital that focuses on women’s health and maternity care. the date on which IHL became a board- 1 . We are committed to delivering quality healthcare services to our patients in modern facilities using advanced technology and our teams of doctors. together with our satellite and heart command centers. we have expanded our operations by opening multi-specialty hospitals (including some with super-specialty “centers of excellence”). for total consideration of Rs. we acquired a 99. We currently have a network of 12 hospitals primarily in north India. except for Fortis La Femme. which also provide more advanced care to patients.10 million (the “Escorts hospitals acquisition”). which provide comprehensive general healthcare to patients in their local communities. We also operate Fortis La Femme. in which we currently own a 5% interest. orthopedics. including patients from our “spoke” hospitals and other hospitals in the surrounding area. especially in the cardiac care specialty area. On March 20. 2006. and we operate and manage EHCR in collaboration with the Government of Chattisgarh. 2006. Noida. the “Escorts hospitals”) and. a multi-national pharmaceutical company headquartered in India (“RLL”).5 million. based on the number of hospital beds. at the time of the acquisition. and super-specialty “hub” hospitals. 301. financed through an equity contribution from FHHL (the “IHL acquisition”). with EHIRC serving as a super-specialty “center of excellence” for cardiac care. 2005. On September 28. two of our hospitals. IHL owns Fortis Hospital.SUMMARY Overview We believe that we are one of the largest private healthcare companies in India.9% interest in International Hospital Limited (“IHL”) from the Promoter Group for total consideration of approximately Rs. a “boutique” style hospital and various satellite and heart command centers. and enhanced our profile among patients. Our hospital network consists of multi-specialty “spoke” hospitals. Although the IHL acquisition did not occur until March 20. neurosciences. The Escorts hospitals acquisition more than doubled our gross income and increased our expertise and prominence. Drawing on the experience of our Promoters as promoters of Ranbaxy Laboratories Limited.850. operated and managed 10 satellite and heart command centers. the remaining five. 2002. Since 2001. 15 satellite and heart command centers in hospitals across the country and one heart command center in Afghanistan. oncology. renal care. which provide secondary and tertiary healthcare to patients. Most of our hospitals are multi-specialty hospitals. who follow international protocols. Escorts Heart Institute & Research Centre at New Delhi (“EHIRC”) and Escorts Heart Centre at Raipur (“EHCR”). Some of our multi-specialty hospitals also include super-specialty “centers of excellence” providing quaternary healthcare to patients in key specialty areas such as cardiac care. focus primarily on cardiac patients. Six of our hospitals are owned or majority-owned by us. gastroenterology and mother and child care. and with a vision of creating an integrated healthcare delivery system. according to information provided by CRIS-INFAC's report published in 2005. we acquired a 90% interest in Escorts Heart Institute & Research Centre Limited (“EHIRCL”). are operated and managed by us but owned by trusts or societies or other corporate owners. we opened our first hospital in Mohali in 2001. In addition. nurses and other healthcare professionals. which commenced operations in August 2004. the results of IHL have been included in our restated consolidated financial statements with effect from December 20.

84.67 million and Rs. Restated total income for fiscal 2006 for FHL. Lt. 90 million to OBPL.controlled subsidiary of FHL pursuant to an agreement between FHL and IHL. 2. Vasant Kunj and owns property on which a hospital is to be constructed in northwest Delhi. Rs. 276. Restated net loss for the same period for FHL. 30.82 million. FHL made an additional Rs. 67. our pro forma average occupancy rate for our owned hospitals and EHCR. Following the OBPL acquisition. respectively. 2 .6 million equity contribution to IHL.000 angioplasties and 15. In fiscal 2006. During fiscal 2006.56 million and Rs.000 open heart surgeries. we performed over 5. FHL made additional equity contributions of Rs.580 inpatient beds in use across our network of 12 hospitals.890. 999. EHIRCL and its subsidiaries and IHL was Rs.5 million (the “OBPL acquisition”). 100.71 million. OBPL has a perpetual O&M contract for the Fortis Flt. Below is a chart outlining our corporate structure and our hospital ownership interests.894. We currently have approximately 1. the IHL acquisition and the OBPL acquisition. 5. 2006. Following the IHL acquisition. we acquired a 100% interest in Oscar Bio-Tech Private Limited (“OBPL”) from a Promoter Group company for total consideration of approximately Rs. taking into account the Escorts hospitals acquisition and the IHL acquisition. 504.73 million. 329. Also on March 20. respectively. with capacity to increase our inpatient beds to approximately 1. Rajan Dhall Hospital.000 angiographies on a pro forma basis taking into account the Escorts hospitals acquisition.29 million. would have been approximately 70%. EHIRCL and its subsidiaries and IHL was Rs. Rs.5 million and Rs.

Srinagar Other Facilities • 1 Satellite Center Future Project • Fortis Hospital. Amritsar O&M Contracts • Fortis La Femme.61% owned Escorts Heart & Super Speciality Institute Limited (“EHSSIL”) Owned Hospital • Escorts Heart & Super Specialty Institute. Lt. Amritsar (“EHSSI”) 100% owned Escorts Heart & Super Speciality Hospital Limited (“EHSSHL”) Future Project • Jaipur Hospital 100% owned Escorts Heart Centre Limited (“EHCL”) No Operations 3 . Noida 100% owned Oscar Bio-Tech Private Limited (“OBPL”) O&M Contract • Fortis Flt. Faridabad (“EHRC”) 82. New Delhi (“EHIRC”) Collaboration with the Government of Chattisgarh • Escorts Heart Centre. New Delhi • Jeewan Mala Hospital. Raipur (“EHCR”) Other Facilities • 15 Satellite and Heart Command Centers 100% owned Escort Hospital & Research Centre Limited (“EHRCL”) Owned Hospital • Escorts Hospital and Research Centre. Rajan Dhall Hospital. New Delhi 90% owned Escorts Heart Institute & Research Centre Limited (“EHIRCL”) Owned Hospitals • Escorts Heart Institute & Research Centre. Shalimar Bagh. New Delhi Future Project • Fortis Hospital. Gurgaon 99. New Delhi (5% equity ownership) • Fortis Jessa Ram Hospital. New Delhi • Khyber Medical Institute.Fortis Healthcare Limited (“FHL”) Owned Hospitals • Fortis Hospital.9% owned International Hospital Limited (“IHL”) Owned Hospital • Fortis Hospital. Mohali (includes the Fortis Ciy Centre clinic in Chandigarh) • Fortis Hospital. Vasant Kunj.

which is used to conduct minimally invasive cardiac surgeries. diabetes. This helps to expand our reach beyond the core catchment areas of our local. together with the design of our facilities. In the regions in which we operate. Our information technology or “IT” infrastructure has been recognized as among the best in the healthcare delivery industry. As of March 31. helps relieve patient anxiety and provide a more comfortable experience for patients. our doctors are dedicated to clinical research and have published numerous studies on topics including cardiology. Some of our doctors also have a history of pioneering innovative techniques for patient treatment. Other characteristics of many of our facilities. we focus on obtaining current technologies for providing healthcare services. the internal operational protocols at Fortis Hospital. we have seven hospitals in the National Capital Region (the “NCR”). By focusing on super-specialty “centers of excellence” at our “hub” hospitals. 2006. This model also allows us to efficiently deploy resources across our network and. on a global basis.Our Competitive Strengths We believe the following competitive strengths distinguish us from our peers and provide us with significant opportunities to grow our business: Skilled doctors dedicated to quality patient care. Our hospitals have been designed to ensure that we are able to offer quality care to our patients. we had a team of 621 doctors at our owned hospitals and EHCR. The “hub and spoke” model for our hospital network allows us to serve the comprehensive medical needs of patients in their local communities at our multispecialty facilities. oncology. We also emphasize pre-emptive and high quality maintenance of our facilities. operating theaters. For example. our hospitals are fitted with modern medical technology and equipment. Having multiple hospitals in the same area also provides us with depth of 4 . as our super-specialty expert clinicians also provide expertise and support at our multi-specialty hospitals. The layouts at our facilities minimize inpatient movement. multi-specialty facilities. we can serve patients referred from doctors working at a number of nursing homes and multi-specialty hospitals in a particular region. such as minimally invasive cardiac and orthopedic surgeries. Mohali was awarded the “Best Design of the Year” award by the American Institute of Architects in 1999. For example. also serves to increase the quality of care throughout our network. the use of special lighting and color and the reduction of “hospital odors”. Depth of coverage. complemented by 2. In addition. such as attractive architectural and design features. Fortis Hospital. infectious diseases. Modern. For example. cardiac surgery. We believe that having many hospitals within the same region helps potential patients gain familiarity with our brand and our network. We adhere to international clinical protocols in patient handling. both in India and. Cost-effective business model. which. with outpatient facilities located near diagnostic facilities within the hospital. In addition. EHIRC and EHRC have been designated as ISO 9001:2000-compliant. while also delivering sophisticated. In addition.359 nurses and 526 other medical personnel. including hospitals outside our network. Noida. including the Da Vinci Robotic System available at EHIRC. also enhance the patient experience. in some cases. nephrology and neuro-surgery. Our hospital staff is being trained to care for patients with techniques utilized in the hospitality industry. advanced procedures and quaternary care at our super-specialty “centers of excellence”. patient-centric hospital facilities. intensive care unit management and emergency care set by leading international hospitals and accreditation bodies. We were named “Best IT User” for “Infrastructure in Healthcare” at the 2005 NASSCOM India IT User Awards and also received an award for “Best IT Implementation of the Year 2005” for hospital implementation systems from PC Quest. we generally have a broad presence.

We intend to utilize our existing experience in building. neuro-sciences. We believe our reputation and affiliation with RLL help us attract not only patients. we believe our name recognition extends beyond the NCR and the other areas in which we currently operate to all over India and. as well as acquiring existing hospitals. Additionally. in some cases. Our Strategy We continuously strive to improve the quality of healthcare services provided by our hospitals. including maternity services and open heart surgeries and transplants. Fortis Hospital. Proven ability to develop and integrate facilities. even internationally. In general. allowing us to serve all of a patient’s medical needs. northwest Delhi and Gurgaon. service and other sectors. Professionally managed administration. orthopedics. while at the same time improving our financial results. Our management team subsequently opened Fortis Hospital. we have been able to generate operating profit at our greenfield hospitals within three to five years of their launch. Several members of our senior management team also have experience working with our Promoter Group companies. but also well-known doctors and other healthcare professionals to our facilities. We believe our combination of a professionally managed administration with a commitment to patient care and high ethical standards enables us to operate our hospitals more efficiently and leads to greater innovation in the management philosophy across our hospitals. Furthermore. We believe the experience we have gained from building and operating hospitals over the past five years has enabled us to improve the rate at which our new hospitals gain acceptance in their local communities and achieve profitable occupancy rates. who in turn draw additional patients to our facilities. such as our acquisition of the Escorts hospitals in September 2005. we have grown from one hospital. then owned by members of the Promoter Group. Since 2001. operating and acquiring hospitals to continue our high rate of growth. In fiscal 2006. oncology. such as RLL and SRL-Ranbaxy Limited. as well as doctors with both clinical and administrative experience. We believe this level of name recognition on a national scale will facilitate the acceptance by both patients and doctors of hospitals in other regions across India that we intend to add to our network. we seek to continue our 5 . We have a history of launching greenfield hospital projects quickly and efficiently. we opened Fortis Hospital. Our senior managers have an average of 20 years of experience in management and an average of six to seven years of experience in management in the healthcare industry in particular. at Fortis Hospital. within 16 months of breaking ground. an Indian clinical reference laboratory company. renal care. Our senior management team is composed of experienced managers from the manufacturing. such as our planned hospitals in Jaipur. Noida. at EHIRC came from outside the hospital’s core region of the NCR. while at the same time providing quality care to our patients. approximately 34% and 23% of the inpatients and outpatients. We employ a flexible approach to our expansion by building new hospitals.coverage. Mohali within 18 months of breaking ground. gastroenterology and mother and child care. We believe the “Escorts” and “Fortis” healthcare brands are widely recognized by both healthcare professionals and patients in specialty areas. Brand equity. Mohali came from outside the hospital’s core region of Punjab. respectively. respectively. Below are the key strategies we are employing to achieve these goals: Continue to grow with a flexible expansion program. Mohali. For example. such as cardiac care. Chandigarh & Panchkula and approximately 50% and 44% of the inpatients and outpatients. to a network of 12 hospitals and 16 satellite and heart command centers.

2006. Our evaluation criteria for new opportunities include the cost. which is dedicated to continuously evaluating potential greenfield. has created a new and expanding group of patients. an increase in awareness about health and healthcare and an increase in lifestyle-related diseases such as heart disease. such as McKinsey & Company. according to a joint report of Ernst & Young and the India Brand Equity Foundation. We have an acquisitions team. location (with a focus on properties located in major cities). In particular.000 angioplasties and 15. We believe the growing affluence. population base. according to CII-McKinsey. including Rs. Due to their complex nature. skilled doctors. the IHL acquisition and the OBPL acquisition. The Indian healthcare market is highly fragmented throughout the country. state and central governments. we intend to roll out in that region quickly to hire doctors and also establish our network in the community before our competitors do. the skill and reputation of the doctors and other medical and non-medical staff at existing facilities and the attractiveness to leading doctors of the location of new sites. Jeewan Mala Hospital. 72% of the doctors at our owned hospitals had advanced medical degrees. As at March. We are currently in various stages of negotiations with a number of other parties to assume O&M contracts and acquire greenfield sites for hospitals outside our core regions.000 million. we believe we are well-positioned to serve this increasing demand for sophisticated medical procedures. The skill level of a hospital’s doctors is key to its success. acquisition and O&M opportunities in both our existing and new regions.000 angiographies on a pro forma basis. Rajan Dhall Hospital. We believe that hiring surgeons and other physicians who have established reputations for clinical excellence in their communities is key to the successful implementation of our strategy to acquire. 49. together with an increase in purchasing power. Expand into new regions.5 million in 2004 to 1. For example. 18. and. on a pro forma basis taking 6 . as we expand into a new region. including in the state of Maharashtra in west India. we performed over 5. develop and operate hospitals. societies. neuro-sciences. Attract and retain prominent. For fiscal 2006. Vasant Kunj and Khyber Medical Institute. gastroenterology and mother and child care. particularly tertiary and quaternary healthcare services. renal care. the number of cardiac disease-related treatments in India is expected to grow from 1. Lt.strategy of entering into O&M contracts with the owners of both existing and new hospitals. sophistication and awareness about healthcare services of patients throughout India will lead to higher demand for our healthcare services. taking into account the Escorts hospitals acquisition. Through our super-specialty “centers of excellence” with well-known doctors in their fields and our particular focus on high-growth areas such as cardiac care and orthopedics. Fortis Flt. We also consult with third party experts. these procedures command relatively high prices and these specialties are among the most profitable for a hospital. the quality of the infrastructure. including cardiac care. corporate entities and the local. work culture and specialties at a facility (for existing facilities). 31. orthopedics. with many small “nursing home” or hospice facilities run by one or two doctors and some larger facilities run by trusts. The growth in the Indian economy. This group is increasingly demanding higher levels of quality medical services. We seek to replicate the model we have applied in north India to establish a network of super-specialty “centers of excellence” and multi-specialty hospitals to deliver quality healthcare to patients across the country and leverage our extensive knowledge of the healthcare sector and brand recognition to attract both doctors and patients to our future facilities.000 million for inpatient acute cardiac care.000 open heart surgeries. the total cardiac care market in 2000-2001 was Rs. oncology. Fortis La Femme. such as Fortis Jessa Ram Hospital. regarding our expansion strategy. as well as entering into new satellite and heart command center arrangements.9 million in 2008. Focus on high-growth segments of the healthcare market. 5. During fiscal 2006.

Noida and Fortis Flt. We believe that we have been successful in attracting doctors to our hospitals and retaining them due to the quality and comprehensive capabilities of our facilities. EHIRC. Lt. In addition. 4. For example. we employ a “staff” model at our hospitals under which most of our doctors. Mohali. Mohali with organizations such as the United States-based Partners Healthcare Systems Inc. our retention rate for consultants and other senior doctors at our owned hospitals would have been approximately 95%. We believe these associations also provide a source of innovation and advanced clinical learning for our doctors and other personnel at our hospitals. Vasant Kunj through the sharing of doctors.80 million and 81% and Rs. reducing the average length of stay of our inpatients and improving utilization rates. In addition. Maximize efficiencies across our hospitals through greater integration and better supply chain management. We are also integrating the operations of Fortis Hospital. Fortis Hospital. medical equipment. will continue to help us attract and retain skilled doctors at our hospitals. our community outreach initiatives and the research opportunities available at our hospitals. our extensive continuing education program. which characterize the “staff model”. as well as install the best practices from our existing hospitals across the Escorts hospitals.02 million. our increasing size will enable us to benefit from economies of scale. The integration will enable us to adopt the best practices from the Escorts hospitals across our existing network. in the case of senior doctors. the autonomy of heading a department. respectively. We believe that the guaranteed income. including all of the doctors practicing within core specialty areas at our owned hospitals and EHCR are compensated on a salary plus incentives or retainership basis. introduce new and innovative procedures for our patients and help us attract overseas patients to our hospitals. approximately 72% of the doctors at our hospitals have received advanced training at leading hospitals in India. Noida and EHRC were 78% and Rs. the predictable working hours and. We seek to improve occupancy rates by expanding the referral network for our hospitals and increasing community outreach programs to gain market share in the regions in which we operate. hosting joint conferences and conducting joint clinical research. we procure equipment and medical consumables on a centralized basis for many of our owned hospitals and EHCR.. USA. 64% and Rs. provides us with a collaborative partner for academic exchange. the average occupancy rate and average income per bed in use at Fortis Hospital. Pursue strategic relationships with leading healthcare partners.into account the Escorts hospitals acquisition and the IHL acquisition. 7 . the reputation of the other doctors at our facilities. 7. Rajan Dhall Hospital. We believe that such associations enable us to improve the quality of our patient care. and practice exclusively at hospitals within the FHL network. We also seek to increase our average income per bed in use by focusing on high-end healthcare services. the United States and Europe and approximately 10% have had or maintain faculty positions at medical teaching institutions in India and abroad. 2. 84% and Rs. Improve occupancy rates and increase average income per bed in use.11 million. Our scientific association through Fortis Hospital. We continue to strive to maximize efficiencies across our hospitals and are in the process of integrating the Escorts hospitals and our existing network of hospitals. laboratories and the hosting of joint medical symposia in order to generate operational synergies at both facilities. 3. For fiscal 2006. In addition. the members of which include the Massachusetts General Hospital and the Brigham & Women’s Hospital in Boston.50 million.

5% of the QIB Portion shall be available for allocation to Mutual Funds. subject to a minimum Issue size of 10% of the post Issue capital. at the discretion of the Company in consultation with the BRLMs. (2) 8 .900 Equity Shares Issue*: Equity Shares outstanding after the 226. would be allowed to be met with spill over from other categories or combination of categories. If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue. in the NonInstitutional Bidder and Retail Individual Bidder categories. Subject to valid Bids being received at or above the Issue Price.614Equity Shares with certain investors (“Pre-IPO Placement”). of such Equity Shares prior to the completion of this Issue.666. if any. (1) Allocation to QIBs is proportionate as per the terms of this Draft Red Herring Prospectus.999. if any. Non-Institutional Portion(2): C. see the section titled “Objects of the Issue” beginning on page [●] of this Draft Red Herring Prospectus. Mutual Funds participating in the 5% reservation in the QIB Portion will also be eligible for allocation in the remaining QIB Portion.633 Equity Shares [●] Equity Shares At least [●] Equity Shares (allocation on proportionate basis) Of which At least [●] Equity Shares (allocation on proportionate Available for allocation to Mutual basis) Funds only Balance for all QIBs including Mutual At least [●] Equity Shares (allocation on proportionate Funds basis) B.000 Equity Shares 56.533 Equity Shares Issue*: Objects of the Issue: For details of the Objects of the Issue. under-subscription.884.THE ISSUE Issue*: Of which: Firm Allotment Portion Therefore. The Company will complete the issuance. Retail Portion(2): [●] Equity Shares (allocation on proportionate basis) [●] Equity Shares (allocation on proportionate basis) Equity Shares outstanding prior to the 169. *The Company is considering a Pre-IPO Placement of up to 17.666. Net Issue to the Public* A. QIB Portion(1): 500.

53 155.07 25. For more information on these differences.85) Year Ended March 31.05) 25. The restated consolidated summary financial information presented below should be read in conjunction with the financial statements included in this Draft Red Herring Prospectus.06 (196.02 (85.53 46.01 949.57 1.86) (2.49 69. 2005 and 2004.S.507.51 43. 2005 737.64 40.69 55.SUMMARY FINANCIAL INFORMATION The following tables set forth our restated consolidated summary statements as of and for the fiscal years ended March 31.47 222.03) Year Ended March 31. 2004 491. the notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page [•].33 87.53 227.971.95 (192.75 3.94) 9 .90 693.99) (199. see the section titled “Summary of Significant Differences between Indian GAAP.55 (535.99 179.31 3. GAAP & IFRS” on page [•].97 (170.in Million) PARTICULARS Income Operating Income Other Income Total Income Expenditure Materials Consumed Personnel Expenses Operating Expenses General and Administration Expenses Selling and Distribution Expenses Interest Expense Preoperative & Preliminary Expenditure Written Off Depreciation & Amortization of Intangibles Amortization of Goodwill Total Expenditure Profits / (Losses) before Tax Fringe Benefit Tax Deferred Tax Expense Income Tax Expense Net Profits / (Losses) before Prior period & Exceptional Items Exceptional Item (Refer Note 8a in Annexure IV) Prior Period Items Net Profits / (Losses) as per audited financials after eliminating inter Year Ended March 31.72 129.91 779.14 291. Indian GAAP differs in certain significant respects from U. 2006. Restated Consolidated Summary Statement of Profits and Liabilities (Rs. 2006.37 172.96) (192.925. The Unaudited Pro Forma Restated Consolidated Summary Statement of Profits and Losses should be read in conjunction with the Restated consolidation adjustments and Restated Consolidated Pro Forma Adjustments.85 21.19 35. U.04 2.26 41.39 78.59 80.29 667.034.41 (650.90 267.96) 107.56 500.43 9.S.13 686. 2006 2.79 342.32 55.02 (625.80) 26.98) 8. and the Unaudited Pro Forma Restated Consolidated Summary Statement of Profits and Losses for the Year ended March 31. GAAP and IFRS.70 0.17 272.52 10.

203.819.63 75.91 102.07 5.01 12.40 55.628.37) (89.541.30 (68.221.84 21.48 704.821.24 234.67 56. 2005 1.68 3.66) (633.395.48 4.52 (167.44 54.63 731.76 16.71) (3.58 10.12 103. 2006 5.76 673.21) (633.52 983.25 17.09 - As at March 31. 2004 842.192.265.83 1. in Million) Particulars Fixed Assets Gross Block Less: Accumulated Depreciation / Amortization Net Block Capital Work in Progress including capital advances Expenditure during Construction Period (Pending Capitalization/Allocation) TOTAL Investments Deferred tax assets (Refer Note 10 in Annexure IV) Goodwill Current Assets.50 - .01 4.00 168.company transactions Adjustments on restatement (Refer Note 2 in Annexure IV) Share in profits of an associate company Net Profits / (Losses) as restated Less: Loss transferred to Minority Interest Net Profits/ (Losses) as allocable to shareholders of Fortis Healthcare Limited Profit & Loss Account at the beginning of the year (Refer Note 5 in Annexure IV ) Losses Brought forward from Amalgamating Company (Refer Note 2k in Annexure IV ) Balance Carried Forward as restated (25.13 254. Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances Total Liabilities and Provisions Secured Loans Unsecured Loans Deferred Payment Liabilities 10 As at March 31.30 (650.42 31.07 7.89 (572.39 0.27) Restated Consolidated Summary Statement of Assets and Liabilities (Rs.61 864.51 14.01) (463.29 2.82) 0.50 1.06 4.65 18.33) 84.458.27) (19.46 9.48 1.04 1.23 380.277.10 (83.057.23) (531.31) 21.26 44.26) (531.90 434.28 61.206.37) 32.165.64 As at March 31.55) 77.98 47.94 167.19 1.71) (1.

12 217.95 846. Securities and Exchange Commission requirements.206.00 2.600.61 1.60 633. and the amounts in the restated consolidated summary statement of profits and losses for the year ended March 31.30 840.45 0.20 15. IHL and OBPL and the restated consolidated summary statement of profits and losses for the year ended March 31. 2006 The following unaudited pro forma restated consolidated summary statement of profits and losses (the ‘Pro Forma Statement’) of Fortis Healthcare Limited (‘FHL’) for the year ended March 31.54 0.95 202.68 226. OBPL and EHIRCL (collectively.S. U.10 3.00 10.700.71 1. 2006 for FHL.160.68 226. GAAP or U.27 217.96 1.31 3.69 179.116.116.66 14. The Pro Forma Statement gives effect to the acquisition of IHL. 2005. 2006 for Escorts Heart Institute and Research Centre Limited (‘EHIRCL’).37 2.04 15.54 102.61 7.96 213.05 531.95 9.78 749. • These restated unconsolidated summary statements of profits and losses for the year ended March 31. International Hospital Limited (‘IHL’) and Oscar Biotech Private Limited (‘OBPL’). the ‘Subsidiaries’) and the investment in Sunrise Medicare Private Limited (the ‘Associate’) by FHL as if they occurred on April 1. The Pro Forma Statement is provided for informational purposes only and has not been prepared to comply with Indian GAAP.S.60 1.78 Unaudited Pro Forma Restated Consolidated Summary Statement of Profits and Losses for the Year endd March 31.58 213. 2006 for EHIRCL form part of the financial information included elsewhere in this Draft Red Herring Prospectus. 2006 has been derived by applying pro forma adjustments and other adjustments on consolidation (arising from elimination of inter company transactions) to the amounts calculated by an aggregation of• the amounts in the restated unconsolidated summary statements of profits and losses for the year ended March 31.Current Liabilities Provisions Deferred Tax Liability (Refer Note 10 in Annexure IV) Minority Interest Total Net Worth Represented by Equity Share Capital 1% Non Cumulative Redeemable Preference Share Capital Share Application Money (Pending Allotment) Reserves & Surplus Less: Debit Balance of Profit & Loss Account Miscellaneous Expenditure (To the extent not written off or adjusted) Net Worth 789. 11 . 2006 for FHL.168.40 144.

The period from January 3. Reflects the elimination of depreciation expense for the year on the component of interest expense incurred at IHL relating to outstanding loans from FHL during the period prior to commencement of commercial operations at IHL & capitalized under Fixed Assets at IHL. 2006. has been allocated to Minority Interest. nor does it purport to represent our results of operations for any future period. the Pro Forma Statement does not purport to represent what our results of operations actually would have been if the transactions had occurred on the dates indicated. 2006 (being the period subsequent to the date on which these entities became a majority owned and a wholly owned subsidiary of FHL respectively). Some of these eliminations had a corresponding impact on the Consolidated Fixed Assets of the group and accordingly an adjustment was necessary to the brought forward balance of Profit and Loss Account of previous years to arrive at the brought forward debit balance in Restated Consolidated Profit and Loss Account of FHL as at April 1. The Pro Forma Statement should be read in conjunction with the restated consolidated summary statements which are included elsewhere in this Draft Red Herring Prospectus and ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’. 5. Reflects the loss incurred at IHL & EHIRCL during the period subsequent to the dates on which these entities have become majority owned subsidiaries of FHL. 2006 (wherein the Associate has incurred a net loss of Rs 1. We have also not made any adjustments for alignment of accounting policies within the Group. 2005. 2006 (wherein the Associate made a net profit of Rs 0. which in the preparation of the restated consolidated summary statements.90 Million).The pro forma acquisition adjustments described in the succeeding paragraphs are based on available information and certain assumptions made by our management. 2006 to March 31. We have not yet completed our final assessments of the fair value of the assets and liabilities acquired and accordingly cannot assure you that our actual results will be the same or similar to those presented in the following pro forma statement. 2006 to March 31. Reflects the impact of adjustments relating to inter company transactions in earlier years eliminated in the preparation of restated consolidated summary statements. In addition. 6. 2006 as reduced by the amortization charge for goodwill appearing in the restated consolidated summary statement of profits and losses for EHIRCL for the year ended March 31.30 Million) was considered in preparation of the restated consolidated summary statements. Restated consolidation adjustments 1. 2. 3. 4. Reflects the elimination of interest expense incurred at FHL and attributable to outstanding loans from IHL and OBPL during the period from March 20. Reflects the adjustment on account of equity accounting of the Associate for the year ended March 31. Restated Consolidated Pro Forma Adjustments 12 . Reflects the amortization charge for goodwill appearing in restated consolidated summary statement of profits and losses for FHL for the year ended March 31.

2006 (being the date when OBL has become a subsidiary of FHL). 8. Reflects the impact of goodwill amortization for the full year as against amortization on a proportionate basis for the number of days that the respective Subsidiary has been a subsidiary of FHL. 2006. Accordingly. In the accompanying Pro Forma Statement. was allocated to Minority Interest. 2005 to March 20. 13 . Reflects the elimination of interest expense incurred at FHL and attributable to the outstanding loan in FHL from OBPL during the period from April 1. such loss is included in Net Profits/(losses) as allocable to the shareholders of Fortis Healthcare Limited’. adjustments have been made to Gross Block of Fixed Assets at FHL.7. 2005 to March 20. considered in the preparation of the restated consolidated summary statements. 9. A portion of the interest paid by FHL was allocated to the statement of profits and losses and the rest was capitalized under the head Leasehold land. which in the restated consolidated summary statements. interest expense at FHL and operating income at OBPL. Reflects the impact of loss incurred at IHL during the period from April 1.

52 28.58 (0.04) (Note i) (302.87 1.01) (847.22) 56.56 19.21) 56.53 Total Income 999.39 226.87 (201.75) (Note f) (618.55 7.96 35.435.96 987. In Million) PARTICULARS Fortis Healthcare Limited Internatio nal Hospital Limited Escorts Heart Institute & Research Centre Limited Oscar Biotech Private Limited Restated consolidation adjustments Restate d consolid ated Restated consolidation pro forma adjustments Restated consolidated pro forma Income Operating Income 977.30) (1.21) (236.82 Expenditure Materials Consumed 369.101.181.30) (93.67) 0.30) (84.79 (1.91) 72.04) 58.35 (510.17 375.893.30 (636.45 2.71) (28.52 472.21) 4.275.13 486.188.956. 2006 (Rs.376.8 5) (302.07 - - - - - - 2.60 (275.05 2.32 (0.79 373.31 337.56 20.68) (93.82 41.69) 1.90 0.59 446.90 (10.08) 11.96 35.77 57.40 7.20 182.65 General and Administration Expenses Selling and Distribution Expenses Interest Expense Preoperative & Preliminary Expenses Written Off Depreciation & Amortization of Intangibles Amortization of Goodwill Total Expenditure Profits /(Losses) before Tax Fringe Benefit Tax Deferred Tax Expense Income Tax Net Profits /(Losses) before Prior period & Exceptional Items Exceptional Item Prior Period Items 1.64) (Note b) 201.45) (Note a) (0.43 1.29 Other Income 22.69) 1.86 (Note h) 337.82) 0.366.22) 11.99 828.10 (201.61) (Note g) 907.55 (857.26 1.87 (201.23 0.71) (276.04 1.75 73.86 (Note c) 200.39 449.67) 1.87 (128.77 102.59 446.96) (895.69) 9.44) 4.446.08) (25.54) (38.38 (93.72 2.20 2.529.04 225.38 (872.02 (84.101.46 (64.30) (67.02) (633.48 29.98) (65.60) (874.490.98) (64.30) (Note a) 4.81 8.15 18.82) (1.71) (1.81 57.53 Net Profits /(Losses) as per audited financials after eliminating inter company transactions Adjustments on restatement Share in Loss of an associate company Net Profits /(Losses) as restated Less: Loss transferred to Minorty Interest Net Profits/ (Losses) as allocable to shareholders of Fortis Healthcare Limited Profit & Loss Account at the beginning of the year Balance Carried Forward as restated (279.14) (1.53 1.22 14.51 Operating Expenses 251.35 1.57 (Note e) (25.90 20.22 1.74) 1.22 171.12 569.08) 56.77 17.30 (Note d) 1.71) 17.30 (0.04 907.83) 69.25 (236.Unaudited Pro Forma Restated Consolidated Summary Statement of Profits and Losses for the year ended March 31.59 (555.57 295.529.09) (633.73) 81.02) (25.92 272.88 19.26 62.01 504.85 225.83) (Note g) 4.62) (67.87 40.51) (26.22) (236.04 78.67) (67.80 (276.29) (277.23 4.23 (10.78) 2.894.01) (611.87 (143.922.90) (Note d) (237.38 (636.48 39.85 5.14) (Note a) 69.01 1.87) 14 .60 (746.34) (200.16) (14.71) (1.15 (0.92 1.30) 222.52 Personnel Expenses 184.21) (25.

f. Ramesh L. New Delhi 110 003.S. Adige. Mr.com Investors can contact the Compliance Officer in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment. d. Independent Director. Geeta Puri Seth Escorts Heart Institute and Research Centre Limited. Rajan Kashyap. Mr. Independent Director. Independent Director. Shivinder Mohan Singh. Mr. Independent Director. see the section titled “Our Management” beginning on page [•] of this Draft Red Herring Prospectus. Lt. The Company is registered with the RoC described below: The Registrar of Companies.GENERAL INFORMATION Registered Office and Registrar of Companies The registered office of Fortis Healthcare Limited is located at Piccadily House. Independent Director. Mr. Non-Executive Director. Sodhi. For further details of the Directors. 15 . NCT of Delhi and Haryana Paryavaran Bhawan. Tel: +91 11 2682 5000 Extn: 4971 Fax: +91 11 4162 8435 E-mail: fortisipo@fortishealthcare. Captain Gaur Marg. New Delhi 110 065.S. c. i. CGO Complex. l. India. 4th Floor. Independent Director. Mr. Independent Director. and Dr. Vinay Kaul. b. 275. k. Executive Chairman. India and the registration number of the Company is 55 76704 and the corporate identification number is U85110DL1996PLC076704. Independent Director. Dr. Harpal Singh. V. India.276. Okhla Road. Joshi. Malvinder Mohan Singh. g. e. Yoginder Nath Tidu Maini. Company Secretary and Compliance Officer Ms. Lodi Road. j. Bhutani. Srinivas Puri. Board of Directors The following persons constitute the Board of Directors: a. credit of allotted shares in the respective beneficiary account or refunds. Gurcharan Das. h. Mr. Mr. Independent Director. General Tejinder Singh Shergill. Mr. New Delhi 110 025. Managing Director.M. Justice S. P.

ipo@citigroup.com Website: www.com.ipo@kotak. Nariman Point.: +91 22 6634 1100 Fax.ipo@jmmorganstanley. India. jmmorganstanley.kotak. 3 Dinshaw Waccha Road.com Website: www. Tel: +91 22 5634 1100 Fax: +91 22 5630 3927 Contact person: Mr. Mumbai 400 021. 3rd Floor. Mumbai 400 021. Deepak Vaidya E-mail: fhl. Nariman Point. India.in Kotak Mahindra Capital Company Limited Bakhtawar. 229.com Website: www. Mumbai 400 021. Pankaj Jain E-mail: fortis. Mumbai 400 021. 1st Floor. 229 Nariman Point.jmmorganstanley. Chandrakant Bhole E-mail: fhl.co. Umesh Gupta E-mail: umesh. Churchgate. Bakhtawar. India. 229. Nariman Point. Tel.ipo@jmmorganstanley. Tel: +91 22 6630 3030 Fax: +91 22 2204 7185 Contact Person: Ms.kotak.com Website: www.com Citigroup Global Markets India Private Limited 4th Floor. Hira Israr E-mail:fhl.com Kotak Securities Limited Bakhtawar.com Syndicate Members JM Morgan Stanley Financial Services Private Limited Apeejay House. Tel: +91 22 5631 9999/ 1600 22 996 Fax: +91 22 5631 9803 Contact Person: Mr. : +91 22 2284 0492 Contact Person: Mr. Mumbai 400 020. India.gupta@kotak.com Website: www. Tel: +91 22 6704 3184/3185 Fax: +91 22 6654 1511 Contact Person: Mr. Legal Advisors 16 .Book Running Lead Managers JM Morgan Stanley Private Limited 141. Maker Chambers III. India.citibank.

India. India.com/india 17 . Okhla Industrial Estate.Legal Counsel to the Company Amarchand & Mangaldas & Suresh A.ey.. Tel: +91 22 2596 0320 Fax: +91 22 596 0329 E-mail:fhlipo@intimespectrum.ind@in. Mumbai 400 078. Shroff and Co. Tel: +91 11 4289 8000 Fax: +91 11 4289 8001 International Legal Counsel to the Underwriters Cravath.com Contact Person: Mr.com Website: www. New Delhi 110 020.intimespectrum.Vishwas Attawar Bankers to the Issue and Escrow Collection Banks [●] Auditors S. LBS Road. Qutab Institutional Area. 110 016.com Website: www. Chartered Accountants B-26.. New Delhi 110 001. Phase – III. New Delhi. Tel: +44 20 7453 1000 Fax: +44 20 7860 1150 Monitoring Agency [●] Registrar to the Issue Intime Spectrum Registry Limited C-13. Bhandup (West).R. One Ropemaker Street. London EC2Y 9HR. 216. United Kingdom. Amarchand Towers. Batliboi & Co. Tel: +91 11 2692 0500 Fax: +91 11 2692 4900 Domestic Legal Counsel to the Underwriters S&R Associates K 40 Connaught Circus.ey. Pannalal Silk Mills Compound. Tel: +91 11 2661 1004 Fax: +91 11 2661 1012 E-mail: ey. India. Swaine & Moore LLP Citypoint. India.

A.F. Ferguson & Co., Chartered Accountants 9, Scindia House, Karturba Gandhi Marg, New Delhi 110 001, India. Tel: +91 11 2331 5884 Fax: +91 11 2371 3899 E-mail: affdelhi@vsnl.com Bankers to the Company ABN Amro Bank N.V DLF Center, Sansad Marg, New Delhi 110 001, India. Tel: +91 11 4212 1416 Fax: +91 11 4212 1213 E-mail: reena.rastogi@in.abnamro.com HDFC Bank Limited New Friends Colony, New Delhi 110 065, India. Tel: +91 11 5102 7756 Fax: +91 11 4162 9562 E-mail: ankurg@hdfcindia.com Standard Chartered Bank 304, 'A' 3rd floor, JMD Regent Square, DLF Phase-II, Gurgaon -Mehrauli Road, Gurgaon 122 001, India. Tel: +91 124 256 4624 Fax: +91 124 256 4625/26 E-mail:Raveesh.Bhatia@in.standardchartered.com The Hongkong and Shanghai Banking Corporation Limited JMD Regent Square, DLF Phase II, Gurgaon Mehrauli Road, Gurgaon 122 002, Haryana, India Tel: +91 124 418 2104 Fax: + 91 124 505 8974 E-mail: tusharpatankar@hsbc.co.in Bank of America DCM Building, 5th floor, 16, Barakhamba Road, New Delhi 110 001, India. Tel: +91 11 2371 5565 Fax: +91 11 2371 4042 E-mail: nitika.sharma@bankofamerica.com Industrial Development Bank of India Limited 19, K.G. Marg New Delhi 110 001, India. Tel: +91 11 2586 1118 Fax: +91 11 2586 1120 E-mail: sanjaykumar_singh@idbibank.com UTI Bank Limited 13th Floor, Statesman House, 148, Barakhamba Road, New Delhi 110 001, India. Tel: +91 98109 67361 Fax: +91 11 4152 1953 E-mail: vibha.jain@utibank.co.in IndusInd Bank Limited Nehru place Branch International trade tower, 'F' block, Ground Floor, Nehru Place, New Delhi 110 019, India. Tel: +91 11 2648 119-20/36 Fax: +91 11 2623 6537 E-mail: denpcredit@indusind.com

18

Statement of Inter-se Allocation of Responsibilities for the Issue Activity Capital structuring formalities. with the relative components and Responsibility JMMS, Kotak, Citigroup JMMS, Kotak, Citigroup Co-ordination Kotak JMMS

Due diligence of the Company’s operations / management / business plans/legal documents etc. Drafting and design of the Draft Red Herring Prospectus and of the statutory advertisement including memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges, RoC and SEBI including finalization of Prospectus and RoC filing. Drafting and approval of all publicity material other than statutory advertisement as mentioned above including corporate advertisement, brochure, etc. Appointment of Registrar to the Issue and Bankers to the Issue. Appointment of the printer. Appointment of the advertising agency. Non-institutional and retail marketing of the Issue, which will cover, inter alia, • • • • • Formulating marketing strategies, preparation of publicity budget; Finalise media and personal relations strategy; Finalising centers for holding conferences for brokers, etc; Follow-up on distribution of publicity and Issuer material including form, prospectus and deciding on the quantum of the Issue material; and Finalise collection centres.

JMMS, Kotak, Citigroup JMMS, Kotak, Citigroup JMMS, Kotak, Citigroup JMMS, Kotak, Citigroup JMMS, KOTAK, Citigroup

Kotak

Citigroup Kotak JMMS Kotak

Domestic institutional marketing of the Issue, which will cover, inter alia, • • Finalising the list and division of investors for one to one meetings; and Finalising road show schedule and investor meeting schedules.

JMMS, Kotak, Citigroup

JMMS

International institutional marketing of the Issue, which will cover, inter alia, • • Finalising the list and division of investors for one to one meetings; and Finalising road show schedule and investor meeting schedules.
19

JMMS, Kotak, Citigroup

Citigroup

Activity Finalising of pricing in consultation with Company. Post bidding activities including management of Escrow Accounts, co-ordination with Registrar to the Issue and Bankers to the Issue, refund to Bidders, etc. The post Issue activities of the Issue will involve essential follow-up steps, which must include finalisation of listing of instruments and despatch of certificates and refunds, with the various agencies connected with the work such as Registrars to the Issue, Bankers to the Issue, and the bank handling refund business. BRLMs shall be responsible for ensuring that these agencies fulfil their functions and enable him to discharge this responsibility through suitable agreements with the Company. Credit Rating As the Issue is of Equity Shares, a credit rating is not required. Grading

Responsibility JMMS, Kotak, Citigroup JMMS, Kotak, Citigroup

Co-ordination Citigroup Citigroup

The Company has not opted for the grading of the Issue by a SEBI registered credit rating agency. Trustees As the Issue is of Equity Shares, the appointment of trustees is not required. Book Building Process The Book Building Process, with reference to the Issue, refers to the process of collection of Bids, on the basis of the Red Herring Prospectus, within the Price Band. The Issue Price is fixed after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are: 1. 2. 3. 4. 5. the Company; the BRLMs; the Syndicate Members, who are intermediaries registered with SEBI or registered as brokers with the BSE/NSE and eligible to act as underwriters. The Syndicate Members are appointed by the BRLMs; the Registrar to the Issue; and the Escrow Collection Banks(s).

This being an Issue for less than 25% of the post-Issue capital, the securities are being offered to the public through the 100% Book Building Process in accordance with the SEBI Guidelines read with Rule 19(2)(b) of the SCRR, wherein: (i) at least 60% of the Net Issue shall be allocated on a proportionate basis to QIBs, including up to 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds; (ii) not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to the Non-Institutional Bidders; and (iii) not less than 30% of the Net Issue shall be available for allocation on a
20

proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Further, 500,000 Equity Shares shall be allotted to the Eligible Employees, subject to valid Bids being received at or above the Issue Price. If at least 60% of the Net Issue cannot be allotted to QIBs, the entire application money will be refunded. The Company is considering a PreIPO Placement of up to 17,884,614Equity Shares with certain investors (“Pre-IPO Placement”). The Company will complete the issuance, if any, of such Equity Shares prior to the completion of this Issue. If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue, subject to a minimum Issue size of 10% of the post Issue capital. QIBs are not allowed to withdraw their Bid(s) after the Bid/Issue Closing Date. For further details, see the section titled “Terms of the Issue” beginning on page [●] of this Draft Red Herring Prospectus. The Company shall comply with the SEBI Guidelines and any other anxillary directions issued by the in this Issue. In this regard, the Company has appointed JM Morgan Stanley Private Limited, Citigroup Global Markets India Private Limited and Kotak Mahindra Capital Company Limited as the BRLMs to manage the Issue and to procure subscription for the Issue. Illustration of Book Building and Price Discovery Process (Investors may note that this illustration is solely for the purpose of easy understanding and is not specific to the Issue). Bidders can bid at any price within the price band. For instance, assuming a price band of Rs. 40 to Rs. 48 per share, issue size of 6,000 equity shares and receipt of nine bids from bidders, details of which are shown in the table below. A graphical representation of the consolidated demand and price would be made available at the websites of the BSE (www.bseindia.com) and the NSE (www.nseindia.com). The illustrative book, as shown below, shows the demand for the shares of a company at various prices and is collated from bids from various investors.
Number of equity shares bid for 500 700 1,000 400 500 200 2,800 800 1,200 Bid Price (Rs.) 48 47 46 45 44 43 42 41 40 Cumulative equity shares bid 500 1,200 2,200 2,600 3,100 3,300 6,100 6,900 8,100 Subscription (%) 8.33 20.00 36.67 43.33 51.67 55.00 101.67 115.00 135.00

The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired quantum of shares is Rs. 42 in the above example. The issuer, in consultation with the book running lead managers, will finalise the issue price at or below such price i.e. at or below Rs. 42. All bids at or above this issue price and bids at cut-off are valid bids and are considered for allocation in respective category. Steps to be taken for Bidding: 1. Check eligibility for making a Bid (see the section titled “Issue Procedure - Who Can Bid?” beginning on page [●] of this Draft Red Herring Prospectus); 2. Ensure that you have a Demat account and the Demat account details are correctly mentioned in the Bid cum Application Form; 3. If your Bid is for Rs. 50,000 or more, ensure that you have mentioned your PAN and attached copies of your PAN card to the Bid cum Application Form (see the section titled “Issue Procedure - ‘PAN’ or ‘GIR’ Number” beginning on page [●] of this Draft Red Herring Prospectus);
21

4. Ensure that the Bid cum Application Form is duly completed as per instructions given in the Red Herring Prospectus and in the Bid cum Application Form. Withdrawal of the Issue The Company, in consultation with the BRLMs, reserves the right not to proceed with the Issue at anytime after the Bid/Issue Opening Date but before Allotment, without assigning any reasons therefor. Bid/Issue Programme Bidding Period/Issue Period BID ISSUE OPENS ON BID ISSUE CLOSES ON [●] [●]

Bids and any revision in Bids shall be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centres mentioned on the Bid cum Application Form except that on the Bid/Issue Closing Date Bids shall be accepted only between 10.00 am and 1.00 pm (Indian Standard Time) and uploaded until such time as permitted by the BSE and the NSE. Bids will only be accepted on working days i.e., Monday to Friday (excluding any public holiday). The Company reserves the right to revise the Price Band during the Bidding Period in accordance with SEBI Guidelines. The cap on the Price Band should not be more than 20% of the Floor Price. Subject to compliance with the immediately preceding sentence, the floor of the Price Band can move up or down to the extent of 20% of the Floor Price advertised at least one day prior to the Bid/Issue Opening Date. In case of revision in the Price Band, the Bidding/Issue Period will be extended for three additional working days after revision of the Price Band subject to the Bidding/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by indicating the change on the websites of the BRLMs and at the terminals of the Syndicate. Underwriting Agreement After the determination of the Issue Price but prior to filing of the Prospectus with the RoC, the Company proposes to enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be offered through the Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLMs shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfil their underwriting obligations. Pursuant to the terms of the Underwriting Agreement, the obligations of the Underwriters are several and are subject to certain conditions, as specified therein. The Underwriters have indicated their intention to underwrite the following number of Equity Shares: (This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC) Name and Address of the Underwriters JM Morgan Stanley Private Limited Indicative Number of Equity Shares to be Underwritten [●]
22

Amount Underwritten (Rs.millions) [●]

Name and Address of the Underwriters 141, Maker Chambers III, Nariman Point, Mumbai 400 021, India. Tel: +91 22 6630 3030 Fax: +91 22 2204 7185 E-mail: fhl.ipo@jmmorganstanley.com Website: www. jmmorganstanley.com Citigroup Global Markets India Private Limited 4th Floor, Bakhtawar, 229 Nariman Point, Mumbai 400 021, India. Tel: +91 22 5631 9999/ 1600 22 996 Fax: +91 22 5631 9803 E-mail: fortis.ipo@citigroup.com Website: www.citibank.co.in Kotak Mahindra Capital Company Limited Bakhtawar, 3rd Floor, 229, Nariman Point, Mumbai 400 021, India. Tel.: +91 22 6634 1100 Fax. : +91 22 2284 0492 E-mail: fhl.ipo@kotak.com Website: www.kotak.com JM Morgan Stanley Financial Services Private Limited Apeejay House, 3 Dinshaw Waccha Road, Churchgate, Mumbai 400 020, India. Tel: +91 22 6704 3184/3185 Fax: +91 22 6654 1511 E-mail: fhl.ipo@jmmorganstanley.com Website: www. jmmorganstanley.com Kotak Securities Limited, Bakhtawar, 1st Floor, 229, Nariman Point, Mumbai 400 021, India. Tel: +91 22 5634 1100 Fax: +91 22 5630 3927 E-mail: umesh.gupta@kotak.com Website: www.kotak.com.

Indicative Number of Equity Shares to be Underwritten

Amount Underwritten (Rs.millions)

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

The above mentioned amounts are indicative and will be finalised after determination of Issue Price and actual allocation of the Equity Shares. The above Underwriting Agreement is dated [●].

23

In the opinion of the Board of Directors (based on certificates given to them by the BRLMs and the Syndicate Members dated [•], 2006), the resources of the Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. All the above-mentioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the Stock Exchanges. Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitments. Notwithstanding the above table, the Underwriters shall be severally responsible for ensuring payment with respect to the Equity Shares allocated to investors procured by them. In the event of any default, the respective Underwriter, in addition to other obligations to be defined in the Underwriting Agreement, will also be required to procure/subscribe to the extent of the defaulted amount.

24

CAPITAL STRUCTURE The share capital of the Company as at the date of filing this Draft Red Herring Prospectus with SEBI (before and after the Issue) is set forth below. (Rs.millions, except share data)
Aggregate nominal value A. Authorised Share Capital(1) 272,000,000 Equity Shares of face value of Rs. 10 each 200 Preference Shares (Class A) of face value of Rs. 100,000 each 26,000,000 Preference Shares (Class B) of face value of Rs. 10 each B. Issued, Subscribed and Paid-Up Share Capital before the Issue 169,999,900 Equity Shares of face value of Rs. 10 each 100 Preference Shares (Class A) of face value of Rs. 100,000 each 26,000,000 Preference Shares (Class B) of face value of Rs. 10 each C. Present Issue in terms of this Draft Red Herring Prospectus 56,666,633 Equity Shares of face value of Rs. 10 each Of which Firm Allotment Portion 500,000 Equity Shares of face value of Rs. 10 each Net Issue to the Public [●] Equity Shares of face value of Rs. 10 each D. Equity Share Capital after the Issue 226,666,533 Equity Shares of face value of Rs. 10 each E. Preference Share Capital after the Issue 100 Preference Shares (Class A) of face value of Rs. 100,000 each 26,000,000 Preference Shares (Class B) of face value of Rs. 10 each F Share Premium Account Before the Issue Equity Shares of face value of Rs. 100,000 each Preference Shares (Class A) of face value of Rs. 100,000 each Preference Shares (Class B) of face value of Rs. 10 each After the Issue Equity Shares Preference Shares (Class A) Preference Shares (Class B) 2,720.00 20.00 260.00 Aggregate Value at Issue Price

1,699.99 10.00 260.00

[●]

[●]

[●] [●]

Nil Nil 2,340.00 [●] [●] [●]

*The Company is considering a Pre-IPO Placement of up to 17,884,614 Equity Shares with certain investors (“Pre-IPO Placement”). The Company will complete the issuance, if any, of such Equity Shares prior to the completion of

this Issue. If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue, subject to a minimum Issue size of 10% of the post Issue capital.

25

(1) The authorised share capital of the Company was increased from Rs. 10 million to Rs. 150 million through a special resolution passed by the shareholders of the Company at the general meeting on November 9, 1998 and from Rs. 150 million to Rs. 550 million through a special resolution passed by the shareholders of the Company at the general meeting on June 28, 2000. The authorised share capital of the Company was further increased from Rs. 550 million to Rs. 750 million through a special resolution passed by the shareholders of the Company at the general meeting on July 10, 2001 and from Rs. 750 million to Rs. 775 million through a special resolution passed by the shareholders of the Company at the general meeting on September 27, 2002. Further, the authorised share capital of the Company was increased from Rs. 775 million to Rs. 890 million (divided into 87,000,000 Equity Shares and 200 Preference Shares (Class A)) through a special resolution passed by the shareholders of the Company at the general meeting on September 30, 2004. Subsequently, the authorised capital of the Company was increased from Rs. 890 million to Rs. 2,000 million (divided into 198,000,000 Equity Shares and 200 Preference Shares (Class A)) through a special resolution passed by the shareholders of the Company at the general meeting on March 8, 2006. Subsequently, the authorised capital of the Company was increased to Rs. 3,000 million (divided into 298,000,000 Equity Shares and 200 Preference Shares (Class A)) through a special resolution passed by the shareholders of the Company at the general meeting on August 30, 2006. Subsequently, the authorised capital was re-classified as Rs. 3,000 million (divided into 272,000,000 Equity Shares, 200 Preference Shares (Class A) and 26,000,000 Preference Shares (Class B)) through a special resolution passed by the shareholders of the Company at the general meeting on September 25, 2006.

Notes to the Capital Structure 1. a. Share Capital History of the Company Equity Share Capital

The following is the history of the equity share capital of the Company:
Date of Allotment and when made fully paid up March 27, 1996 Number of Equity Shares Issue Price per Equity Share (Rs.) 10 Face value per Equity Share (Rs.) 10 Consideration (cash, bonus, consideration other than cash) Cash Nature of allotment Cumulative Share Capital (Rs.)

700

March 17, 1997 June 9, 1999 September 6, 2000 September 6, 2000 November 27, 2000 May 21, 2001 August 30, 2001 December 28, 2001 May 21, 2002 December 27, 2002

10,000 2,845,300 4,340,000 1,520,000 28,035,800 6,838,200 6,410,000 10,698,200 9,301,800 3,953,360

10 10 10 10 10 10 10 10 10 10

10 10 10 10 10 10 10 10 10 10

Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash

Subscription on signing of the Memorandum of Association Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment

7,000

107,000 28,560,000 71,960,000 87,160,000 367,518,000 435,900,000 500,000,000 606,982,000 700,000,000 739,533,600

26

Date of Allotment and when made fully paid up June 25, 2003 January 10, 2004 December 20, 2004 April 21, 2005 February 10, 2006

Number of Equity Shares

904,540 47,000 9,229,500 145,500 520,000

Issue Price per Equity Share (Rs.) 10 10 10 10 -

Face value per Equity Share (Rs.) 10 10 10 10 10

Consideration (cash, bonus, consideration other than cash) Cash Cash Cash Cash Other than cash

Nature of allotment

Cumulative Share Capital (Rs.)

March 31, 2006

85,200,000

10

10

Cash

Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Allotment to the shareholders of erstwhile FMCHL pursuant to order of the Delhi High Court dated October 7, 2005* Preferential Allotment

748,579,000 749,049,000 841,344,000 842,799,000 847,999,000

1,699,999,000

*

Pursuant to the order of the High Court of Delhi dated October 7, 2005 sanctioning the scheme of amalgamation between the Company and Fortis Medical Centre Holdings Limited (“FMCHL”), the Company allotted 520,000 Equity Shares to the 10 equity shareholders of erstwhile FMCHL in the ratio 1:4 (i.e., one Equity Share for every four equity shares of FMCHL). For further details with respect to the scheme of amalgamation, see the section titled “History and Certain Corporate Matters” beginning on page [●] of this Draft Red Herring Prospectus.

b. i.

Preference Share Capital: The history of the Preference Share (Class A) capital of the Company is as follows:
Number of Preference Shares (Class A) Issue Price per Preference Share (ClassA) (Rs.) 100,000 Face Value per Preference Shares (Class A) (Rs.) 100,000 Consideration (cash, bonus, consideration other than cash) Nature of allotment Cumulative Preference Share (ClassA) Capital (Rs.) 10,000,000

Date of Allotment and when made fully paid up August 4, 2005

100

Cash

Preferential allotment

ii.

The history of the Preference Share (Class B) capital of the Company is as follows:
Number of Preference Shares (Class B) Issue Price per Preference Share (Class B) (Rs.) 100 Face Value per Preference Shares (ClassB) (Rs.) 10 Consideration (cash, bonus, consideration other than cash) Nature of allotment Cumulative Preference Share Capital (ClassB) (Rs.) 260,000,00 0

Date of Allotment and when made fully paid up September 26, 2006

26,000,000

Cash

Preferential allotment

27

333.307 20. Further. the Equity Shares held by the Promoters may be transferred to and among the Promoter Group or to a new promoter or persons in control of the Company subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations. are not ineligible for computation of Promoter’s contribution under Clause 4. in addition to the lock-in of 20% of the post-Issue shareholding of the Promoters for three years. as applicable.1 of the SEBI Guidelines.913. which are being locked-in. the Equity Shares held by persons other than Promoters prior to the Issue may be transferred to any other person holding the Equity Shares which are locked-in as per Clause 4.14 of the SEBI Guidelines.39 3. Preferential Allotment Purchase of Equity Shares from Shivi Holdings Private Limited. subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations. as applicable. for one year is 181.86 4.The Promoters have confirmed that in the event any Eligible Employee to whom 500. b.2. 2004 August 30. The total number of Equity Shares which are locked-in.00 The Promoters contribution in to the extent of not less than the specified minimum lot and from the persons defined as Promoters under the SEBI Guidelines.23 2002-2003 December 20. Details of pre-Issue Equity Share capital locked in for one year: In terms of Clause 4.267 7. 1997.1 (a) of the SEBI Guidelines. Details of Promoters’ contribution by Fortis Healthcare Holdings Limited and lock-in for three years are as follows: Date of Allotment/ Acquisition Consider ation and Equity Share) (Rs.16.226 Equity Shares. in terms of Clause 4. as specified above. 1997.51 12. the locked-in Equity Shares held by the Promoters can be pledged only to banks or financial institutions as collateral security for any loans granted by such banks or financial institutions. 2005 Purchase of Equity Shares from various parties. of Equity Shares 16.6 of the SEBI Guidelines.14. In terms of Clause 4. including those specified above.30 % of PostIssue paid-up capital 7. a.15 of the SEBI Guidelines.661. provided that the pledge of shares is one of the conditions under which the loan is sanctioned. In terms of Clause 4.333. Promoter’s Contribution and Lock-in Pursuant to the SEBI Guidelines.300 20.000 Equity Shares are proposed to be Allotted in the Firm 28 .38 9.740 Nature of allotment/ acquisition % of PreIssue paidup capital 9.1(b) of the SEBI Guidelines.) 10 10 10 No.16. Malav Holdings Private Limited and Ranbaxy Holding Company 45. The Equity Shares issued in the Firm Allotment Portion to Eligible Employees aggregating to 500. The Equity Shares. an aggregate of 20% of the post-Issue equity share capital of the Company shall be locked in by the Promoters for a period of three years from the date of Allotment in the Issue.758.000 Equity Shares are proposed to be Allotted shall be locked in for a period of one year from the date of Allotment in the Issue. the entire preIssue share capital of the Company shall be locked-in for a period of one year from the date of Allotment in the Issue.

Except as stated above.394 154.29 0. The Issue Price for such number of Equity Shares shall be brought in by the Promoters at least one day prior to the Bid/Issue Opening Date. direct or indirect in the nature of discount.000.00 3. the Promoters will not participate in the Issue. Ashok Rajagopal (iii) The table below presents the shareholding pattern of Preference Shares (Class B) before the proposed Issue: Pre-Issue Number of Percentage of Preference Preference Shares(Class B) Share capital 26.08 0.79 8.00 Name of Shareholder Fortis Healthcare Holdings Limited b.352. Malvinder Mohan Singh Mr.339.07 8.77 100.250 14. The Equity Shares so acquired by the Promoters.78 90. (i) Name of Shareholder Promoters Mr. Shivinder Mohan Singh Fortis Healthcare Holdings Limited Total Holding of Promoters Promoter Group (other than the Promoters) Ranbaxy Laboratories Limited Malav Holdings Private Limited Ranbaxy Holding Company Total Holding of Promoter Group (other than Promoters) Others Total (ii) The table below presents the shareholding pattern of Preference Shares (Class A) before the proposed Issue: Pre-Issue Number of Percentage of Preference Preference Shares (Class A) Share capital 100 100. d.394 6. Shareholding Pattern of the Company Pre-Issue The table below presents the shareholding pattern of Equity Shares before the proposed Issue: Pre-Issue Number of Percentage of Equity Shares Equity Share capital 6.999.900 0.326.660 133.750 121.Allotment Portion. commission.00 0.000 Equity Shares.307. allowance or otherwise shall be made either by the Company or the Promoters in this Issue to the Eligible Employees applying in the Firm Allotment Portion. shall also be subject to a lockin for a period of one year from the date of Allotment of the Equity Shares in the Issue.512 169. Post-Issue 29 . No payment. a.940 154.00 Name of Shareholder Dr.728 14. the Promoters shall apply to the extent of Equity Shares offered to such Eligible Employee upto a maximum of 500.44 0.097.00 90. from the offer made to him/her in the Firm Allotment Portion. withdraws partially or fully.660 1.000 100. if any.

Lakhi Samtani Mr. Shivinder Mohan Singh Fortis Healthcare Holdings Limited Total Holding of Promoters Promoter Group (other than the Promoters) Ranbaxy Laboratories Limited Malav Holdings Private Limited Ranbaxy Holding Company Total Holding of Promoter Group (other than Promoters) Others Total 6.06 0.326.533 6. including the Eligible Employees to whom Equity Shares are proposed to be Alloted in the Firm Allotment Portion. 2. The shareholding pattern of Preference Shares (Class A) post-Issue will remain the same as the pre-Issue shareholding pattern of Preference Shares (Class A). Maninder Singh Ms.03 0.29 0. 5.145 226. 10 days prior to filing the Draft Red Herring Prospectus) are as follows: Name of Shareholders Fortis Healthcare Holdings Limited Ranbaxy Laboratories Limited Prime Trust. Bala Kaul Mr.394 6.000 25. the Directors.e.Dera Baba Jaimal Singh Malav Holdings Private Limited Ranbaxy Holding Company Mr.08 0. 4.750 121.339.09 6.00 0. 11.250 50. and the BRLMs have not entered into any buy-back and/or standby arrangements for purchase of Equity Shares from any person.097. Preetinder Singh Joshi Number of Equity Shares 154.09 68.750 121.07 0. The list of top ten shareholders of the Company and the number of Equity Shares held by them is as under: (a) The top ten shareholders of the Company as of the date of filing of the Draft Red Herring Prospectus and as on September 18.03 0. 7.660 57.000 Percentage Shareholding (%) 90.940 154. 6. 30 .78 8. 1. 4.01 0.250 14. 2006 (i.660 235.33 0.326.974. 5. 3.14 0. Harpal Singh Davinder Singh Brar (HUF) Mr.000 50.03 0.58 75.394 154.660 133. Name of Shareholder Number of Equity Shares Percentage of equity share capital (%) 0.000 50.22 0. the Promoter Group.03 0. 9. 10.940 14. The Company. Malvinder Mohan Singh Mr.01 S.097.000 133..00 68.00 The Company proposes to redeem the Preference Shares (Class B) from the proceeds of this Issue or from the proceeds of the Pre-IPO Placement if any. No. 8.003 50. the Promoters.666.000 25. their respective directors.352.728 14.(i) The table below presents the shareholding pattern of Equity Shares as adjusted for the Issue.05 Promoters Mr.

07 0.(b) S. 2.080.79 16. and rights issue or in any other manner during the period commencing from submission of this Draft Red Herring Prospectus with SEBI until the Equity Shares have been listed.300. Harpal Singh Mr.01 5.78 8.96 16. 6. there will be no further issue of Equity Shares. (a) 8. if any.940 14.660 133.000 235.07 6. 1. 7.24 7. two years prior to filing the Draft Red Herring Prospectus) were as follows: Name of Shareholders Fortis Healthcare Holdings Limited Ranbaxy Holding Co. 9. Lakhi Samtani Number of Equity Shares 34. No. Shivinder Mohan Singh Mr.394 5. None of our Directors. 2006 was as below: Name of Promoter Group /directors of the Promoters Fortis Healthcare Holdings Limited Ranbaxy Laboratories Limited Malav Holdings Private Limited Ranbaxy Holding Company Mr.593 % of pre Issue share capital 90.00 99.000 12. whether by way of issue of bonus shares. subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investor.460 6. Ranbaxy Laboratories Limited Oscar Investments Limited Malav Holdings Private Limited Shivi Holdings Private Limited Prime Trust -Dera Baba Jaimal Singh Davinder Singh Brar (HUF) Mr.697. Vinay Kaul Total Number of Equity Shares 154.000. 4.000 50.07 0.127. options or rights to convert debentures. Malvinder Mohan Singh Mr. preferential allotment.000 Percentage Shareholding (%) 45.394 6.750 121.M. 31 9. 10. 10. Bhutani Mr. Subject the Pre-IPO Placement.00 0. 3. 5. 11.706.326.000 4. 2004 (i.00 0. the directors of the Promoters have not purchased or sold any Equity Shares during a period of six months preceding the date on which this Draft Red Herring Prospectus is filed with SEBI.529.45 0.07 0. loans or other instruments into the Equity Shares..31 0.140 12. key managerial personnel hold Equity Shares of Preference Shares in the Company. There are no outstanding warrants.000 4.51 5. The Promoter Group. A Bidder cannot make a Bid for more than the number of Equity Shares offered through the Issue.29 0.00 0.000 50. 8.102 103 168. V.e.250 6. .000 50. except as stated in the section titled “Our Management” beginning on page [●] of this Draft Red Herring Prospectus.097.73 8.08 0. The top ten shareholders of the Company as on September 30. Shareholding of the Promoter Group in the Company: The shareholding of the Promoter Group and directors of the Promoters in the Company as on September 26.

OCBs are not allowed to participate in the Issue. we may. in consultation with the BRLMs and the Designated Stock Exchange. if any. Except as disclosed in the sections titled “Capital Structure – Notes to the Capital Structure” and “Other Regulatory and Statutory Disclosures – Issues Otherwise than for Cash” beginning on pages [●] and [●]. in any category except in the QIB category and the Firm Allotment Portion would be met with spill. except that if we enter into acquisitions. see the section titled “Issue Structure” beginning on page [●] of this Draft Red Herring Prospectus. As per the RBI regulations. of such Equity Shares prior to the completion of this Issue. the Company presently does not intend or propose to alter the capital structure for a period of six months from the Bid/Issue Opening Date. by way of split or consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into or exchangeable. For further details. . At least 60% of the Net Issue shall be allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”). unless otherwise permitted by law. subject to necessary approvals. Subject to the Pre-IPO Placement. subject to valid Bids being received at or above the Issue Price. 2006 the total number of holders of the Equity Shares was 124.000 Equity Shares shall be allotted to Eligible Employees in the Firm Allotment Portion. then the entire application money with be refunded forthwith. Further 500. The Equity Shares held by the Promoters are not subject to any pledge. We shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time. If the Pre-IPO Placement is completed the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue. There shall be only one denomination of the Equity Shares. subject to a minimum Issue size of 10% of the post Issue capital. 16. if any. 5% of the QIB Portion shall be available for allocation to Mutual Funds only and the remaining QIB Portion shall be available for allocation to the QIB Bidders including Mutual Funds. subject to valid Bids being received at or above the Issue Price. subject to valid Bids being received at or above the Issue Price. 15. the Company has not issued any Equity Shares for consideration other than cash. 20. not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders. We have not issued any Equity Shares out of revaluation reserves. respectively of this Draft Red Herring Prospectus. 21. none of the Directors or key managerial personnel holds any Equity Share or Preference Share. 17.12.over from other categories in the Company’s sole discretion.Under-subscription. Further. If at least 60% of the Net Issue cannot be allocated to QIBs. 14. The Company has not raised any bridge loans against the proceeds of the Issue. 19. As on September 26. directly or indirectly for Equity Shares) whether preferential or otherwise. consider raising additional capital to fund such activity or use Equity Shares as currency for acquisitions or participation in such joint ventures. The Company will complete the issuance. 32 13. An over subscription to the extent of 10% of the Issue can be retained for the purposes of rounding to the nearest multiple of [•] while finalizing the basis of Allotment. Except as disclosed in this Draft Red Herring Prospectus. 18. joint ventures or other arrangements.

changes in estimates. (c) Prepay some our short term loans. exchange rate fluctuations and external factors. Prepayment of short term loans of the Company. This may entail rescheduling or revising the planned capital expenditure and increasing or decreasing the capital expenditure for a particular purpose from its planned expenditure at the discretion of the Company’s management. (b) Refinancing of funds availed for the acquisition of Escorts Heart Institute Research Centre Limited. 1. New Delhi by Oscar Bio-Tech Private Limited (“OBPL”). Refinancing of funds availed for the acquisition of Escorts Heart Institute Research Centre Limited (“EHIRCL”). 4. 1. a subsidiary of the Company The Company proposes to invest Rs. New Delhi by OBPL.00 [●] [●] 1. it is proposed that OBPL will issue equity shares to the Company. the Company may have to revise its capital expenditure requirements as a result of variations in the cost structure. a subsidiary of the Company. increased fund deployment for a particular activity will be met from internal accruals of the Company and debt. [•] million. In case of any variations in the actual utilization of funds earmarked for the activities described below. New Delhi. General Corporate Purposes Issue Expenses * Total * To be finalised upon determination of Issue Price.OBJECTS OF THE ISSUE The object of the Issue are to: (a) meet the cost of development and construction of a new hospital owned by OBPL.00 million of the net proceeds of the Issue in its subsidiary. The project shall consist of the construction of a 250 bed hospital and is expected to be completed by March 2008. OBPL for the construction and development of a new hospital to be located at Shalimar Bagh.No Proposed Expenditure Program ( Rs. In view of the dynamic nature of the healthcare delivery industry and on account of new projects that the Company may pursue. The Company is not assured of dividends pursuant to such investment in equity shares of OBPL. renal care and mother and child care. The details of the utilization of the proceeds of the Issue are as follows: S. 5. including potential merger and acquisition opportunities for existing hospitals or hospitals under development.32 acres of land and it is proposed to provide healthcare to patients in key specialty areas such as cardiac care.000.00 700. Construction and development of the planned hospital to be located at Shalimar Bagh. orthopedics. and (c) achieve the benefits of listing on the Stock Exchanges. 3. gastroenterology.600.000. 33 . Construction and development of the planned hospital to be located at Shalimar Bagh. which may not be within the control of the management of the Company. The fund requirements described below are based on management estimates and the Company’s current business plan and have not been appraised by any bank or financial institution. The hospital is to be set up over 7. The net proceeds of the Issue after deducting expenses for the Issue are estimated at Rs. In connection with the investment by the Company in OBPL from the net proceeds of the Issue. 2. neuro-sciences. a subsidiary of the Company.00 5. million) Estimated amount of Company’s contribution to be raised from the Issue 1. The main objects clause of the Memorandum of Association and objects incidental to the main objects enables the Company to undertake its existing activities and the activities for which funds are being raised by the Company through the Issue.

Refinancing of funds availed for the acquisition of EHIRCL The Company executed a share purchase agreement on September 25. dated September 27. 2. 162. In accordance with the terms of the share purchase agreement. For details on the acquisition of EHIRCL. 5. The estimated cost of the project is detailed in the following table: Sl.80 2.10 million. out of the proceeds of this Issue. dated September 27.70 434. is approximately Rs. 90 each aggregating Rs.10 86. 5. Chandiok & Co. OBPL has not yet placed orders for machinery. margin money and Cash losses Total (Rs. 6. at a premium of Rs. No.00 190.600. OBPL has already incurred an expenditure of Rs. i. 2006) towards repayment of certain term loans availed from banks and financial institutions for funding the acquisition of EHIRCL. Chandiok & Co. see the section titled “History and Certain Corporate Matters” beginning on page [●] of this Draft Red Herring Prospectus.The total cost of this project. 1. 2.00 * This amount has been incurredbyOBPL as of [●]. In March 2006. Chandiok & Co. 34 .00 million.000 million of which Rs.67 million as per the certificate of Walker. Fortis Healthcare Holdings Limited (“FHHL”).600. Particulars Land* Civil Interiors and consultancy fees Engineering Services Medical Equipment Hospital Engineering and Support Services Information Technology Contingencies Pre-operative and preliminary expenses Finance Cost. The Company proposes to redeem the Preference Shares (Class B) issued to FHHL. 2005 pursuant to which the Company acquired 90% of the equity share capital of EHIRCL including its subsidiaries. The total cost of the acquisition was Rs. dated September 27. in relation to the acquisition of land for the project. civil construction. 7.000 million is proposed to be financed through equity investment by the Company.000 million is proposed to be financed through debt and Rs. a Promoter of the Company advanced Rs. 1. 8.40 360.575.000. 4.00 million as share application money.00 20. 1. 2006. in lieu of such share application amounts the Company issued 26.e Rs. The Company utilized a part of such amounts. 2. 2. 2. medical and other equipment for this project.00 548.00 million (as per the certificate of Walker.850. 3. Million) Expenditure incurred or proposed to be incurred 200. 9.00 110.00 50. 2006). 2006. forming a part of the debt component. Subsequently on September 26.000 Preference Shares (Class B) each to FHHL. 2. the Company paid the entire consideration for the acquisition from short term loans (as per the certificate of Walker. No second-hand equipment and instruments have been bought or are proposed to be bought from the proceeds of this Issue.000.

Repayment: Principal amount to be repaid in 12 months. the Company will reduce the amount of prepayment of high cost debt. 2006. the Company proposes to utilise an aggregate amount of Rs. 2006. details of which are provided below: Lender HDFC Limited Facility and Loan Documentation Short term loan of Rs. 2003. 3. Million) Amount Outstanding as on September 25. 1. 3. Personal guarantees of Mr. Details of the amounts outstanding have been provided in the table below: Bank/Financial Institution/Lender Kotak Mahindra Bank Limited Bank of Rajasthan HDFC Limited Indusind Bank Limited HSBC Bank Limited Total Amount Sanctioned Under Fund Based Facilities 500 300 300 200 500 (In Rs. Repayment of short term loans availed by the Company The Company has entered into various financing arrangements with a number of banks/ financial institutions and other lenders. Some of the financing arrangements of the Company contain provisions relating to prepayment penalties. 3. For further details of the terms and conditions of the loan. 2004. As on September 26. In the event of any shortfall in using the net proceeds of the Issue as described in the Objects of the Issue. In the event of any surplus with respect to the proceeds of the Issue.350 million. Security Pledge of 1. 2005 and 2006. 1. see section titled “Financial Indebeted ness” beginning on page [●] of this Draft Red Herring Prospectus. 2006 500 300 300 200 50 For further details of the terms and conditions of the loans. if any. Interest Rate and Repayment Schedule Interest: 10% per annum. Shivinder Mohan Singh.000 million from the net proceeds of the Issue in connection with the prepayment of the loans obtained by the Company for the acquisition of EHIRCL. see the section titled “Financial Indebtedness” beginning on page [●] of this Draft Red Herring Prospectus. 2006 the amount outstanding from the Company under these facilities was Rs. the Company will. 35 . These arrangements include fund based facilities from banks/ financial institutions and other lenders aggregating Rs. have flexibility in applying such surplus towards further repayment of debt or for general corporate purposes.800 million as on September 26.Further. see the section titled “Financial Statements” beginning on page [●] of this Draft Red Herring Prospectus. in accordance with the policies established by the Board. The Company will take these provisions into consideration in prepaying debt from the proceeds of the Issue. For the restated income statement and balance sheet of EHIRCL for the years ended March 31.000 million availed pursuant to agreement dated March 27. Funds raised from the Pre-IPO Placement. Malvinder Mohan Singh and Mr. 2002. The Company will approach the banks/financial institutions/lenders or clients after the completion of this Issue for prepayment of some of the above high-cost loans/advances.8 million equity shares of EHIRCL. will be utilised towards redemption of Preference Shares (Class B).

General Corporate Purposes We intend to use a part of the net proceeds. The management of the Company. 112. The following are the details of the estimated schedule of deployment of funds and the schedule of implementation of the projects: 36 . among others. work. printing and distribution expenses. Schedule of Implementation and deployment of funds The Company proposes to deploy the net proceeds of the Issue in the aforesaid projects in the next three Fiscals. in accordance with the policies of the Board.21 million. out of the net Issue toward general corporate purposes to drive our business growth. millions) Percentage of Total Expenditure [●] [●] [●] [●] [●] Percentage of Issue Size [●] [●] [●] [●] [●] Lead management. legal fees. 123. presently does not have any legally binding commitments to enter into any such investments or acquisitions. Rs. legal fees etc. 2008 and 2009 are Rs. will have the flexibility in utilizing any surplus amounts from the net proceeds of the Issue. Accordingly. 4B. The estimated Issue expenses are as follows: S. Advertising and marketing expenses** [●] 3.28 million and Rs. Activity Expense Amount (Rs. General corporate purposes including strategic initiatives Growth opportunities through strategic initiatives of acquisitions / investments In addition to the proposed capital expenditure by the Company in building new hospitals and continued investment in existing facilities. culture and specialities at a facility (for existing facilities). ** The amounts will be finalised at the time of filing of the Red Herring Prospectus. 560. respectively. the quality of the infrastructure. advertisement expenses and registrar and depository fees. The Company intends to use approximately Rs [●] towards such strategic initiatives. No. underwriting and selling commissions. The total amount to be deployed in Fiscal 2007. Issue Expenses The Issue related expenses include. population base. 1. grown its business and operations through both organic and inorganic routes. Going forward. In case of a shortfall of funds toward this purpose.)** [●] [●] Total * The amounts will be incorporated on finalisation of the Issue Price. While this would be a component of its strategy. it is also a key component of the Company’s strategy to expand through viable acquisitions and strategic partnerships. the Company believes that strategic investments and acquisitions may act as an enabler to growing its business. the skill and reputation of the doctors and other medical and nonmedical staff at existing facilities and the attractiveness to leading doctors of the location of new sites. Our evaluation criteria for new opportunities include the cost. Printing and stationary expenses** [●] 4. underwriting and selling [●] commissions* 2. location (with a focus on properties located in major cities). approximately Rs. the Company intends to use a part of the proceeds received by the Company from the Issue for investment in acquiring existing hospitals and other strategic investments and acquisitions.4. the Company. including by means of external debt. [●] million. The Company has in the past.96 million. IV. Others (Registrar fees. we intend to fund it through alternative means of funding. 4A.

a subsidiary of the Company.00 availed by the Company. No. the Company’s key managerial personnel or companies promoted by the Promoters except in the ordinary course of business. The Company will also. the Directors. Object Expenditure incurred as on August [31]. 2008 and 2009. Pending utilisation for the purposes described above.2006 162. Interim Use of Proceeds The management of the Company.96 Estimated time of completion or repayment Fiscal 2009 Nil 5. in accordance with the policies set up by the Board. No part of the net proceeds will be paid by the Company as consideration to the Promoters. provide details.S. 2.600. - - January 2007 Appraisal Report None of the projects for which the net proceeds of the Issue will be utilised have been financially appraised and the estimates of the costs of projects mentioned above are based on internal estimates of the Company and quotes received from vendors of equipment and consideration payable for contracts already executed. if any. 2008 and 2009 clearly specifying the purposes for which such proceeds have been utilised. Monitoring of Utilisation of Funds The Board and the monitoring agency ([●]) so appointed for this purpose will monitor the utilisation of the proceeds of the Issue. will have flexibility in deploying the proceeds received from the Issue. The Company will disclose the utilization of the proceeds of the Issue under a separate head in its balance sheets for Fiscal 2007.28 112. in its balance sheets for Fiscal 2007. * Expenditure incurred by OBPL. million) 123. the Company intends to temporarily invest the funds in high quality interest bearing liquid instruments including deposits with banks. Construction and development of the planned hospital to be located at Shalimar Bagh. New Delhi by OBPL Refinancing of funds availed for the acquisition of Escorts Heart Institute Research Centre Limited Schedule of Deployment of funds Fiscal Fiscal Fiscal 2007 2008 2009 (Rs.00 - - January 2007 Repayment of short term loans Nil 700.21 560. in relation to all such proceeds of the Issue that have not been utilised thereby also indicating investments. 37 . 3. if any. Such investments would be in accordance with investment policies approved by our Board of Directors from time to time.67* 1. of such unutilised proceeds of the Issue.

Fortis Hospital. We believe our combination of a professionally managed administration with a commitment to patient care and high ethical standards enables us to operate our hospitals more efficiently and leads to greater innovation in the management philosophy across our hospitals. The face value of the Equity Shares is Rs. Privately operated healthcare delivery accounted for over half of all inpatient hospital visits in India and 82% of all outpatient visits according to CRIS-INFAC’s report published in 2005. nurses and other healthcare professionals who follow international protocols. and consequently. we have grown from one hospital. Mohali.centric facilities using advanced technology and our teams of doctors. attracts patients and leading doctors to our facilities. Since 2001. • • • • • • Other Factors • • Despite increasing expenditure on healthcare. as well as doctors with both clinical and administrative experience. based on the number of hospital beds. while at the same time providing quality care to our patients. We have a professional management team which is composed of experienced managers from different industries. many of whom have a history of pioneering innovative techniques for patient treatment. We believe our reputation through the Fortis and Escorts Healthcare brands. according to information provided by CRIS-INFAC’s report published in 2005. India’s growing middle class is increasingly choosing private hospitals. neurosciences. advanced procedures and quaternary care to patients in key specialty areas such as cardiac care. including life expectancy and infant mortality. 38 .BASIS FOR ISSUE PRICE The Issue Price will be determined in consultation with the BRLMs on the basis of assessment of market demand and on the basis of the following quantitative and qualitative factors for the offered Equity Shares by the Book Building Process. Qualitative Factors Internal Factors • We believe that we are one of the largest private healthcare companies in India. and integrating facilities into our operations. and will also facilitate the acceptance by both patients and doctors of hospitals in other regions across India that we intend to add to our network. gastroenterology and mother and child care at our superspecialty “centers of excellence”. orthopedics. We deliver quality healthcare services to our patients in modern. We currently have a network of 12 hospitals primarily in north India and 15 satellite and heart command centers in hospitals across the country and one heart command center in Afghanistan. We have a cost-effective business model which allows us to deploy resources across our network and serve the comprehensive medical needs of patients in their local communities at our multi-specialty facilities. Investors should also refer to the sections titled “Risk Factors” and “Financial Statements” beginning on pages [●] and [●] of this Draft Red Herring Prospectus to get a more informed view before making the investment decision. Government healthcare delivery infrastructure in India is not well-developed. renal care. oncology. 10 and the Issue Price is [●] times the face value at the lower end of the Price Band and [●] times the face value at the higher end of the Price Band. We have a team of skilled doctors dedicated to quality patient care. and Ranbaxy Laboratories Limited heritage. India lags behind other developing nations in many health categories. to a network of 12 hospitals and 17 satellite and heart command centers. patient. and have established a track record of launching green field hospital projects in a timely manner. while also delivering sophisticated.

The information presented in this section derived from the Company’s unconsolidated audited restated financial statements for the years ended March 31. Following acquisitions as described on page [-] of this Draft Red Herring Prospectus. diabetes and cardiovascular disease. The Company's consolidated financials have historically included its own operations.) (0. and those of IHL consolidated as a board controlled subsidiary since December 20. 2005 and a 100% stake in OBTPL in March.8 times 1) P/E ratios for peer group from “Capital Market” Volume XXI/ 14 dated September 11. For detailed discussion on the above factors. 3. 2004. 2002. 2006: [●] Peer group P/E(1) (i) Apollo Hospitals: 35. The rapid growth of the middle and upper classes in India. 1. b. 2006. In addition. the Company acquired a 90% interest in EHIRCL.80) (4. a segment that accounts for a substantial proportion of healthcare expenditure. increased spending on healthcare infrastructure and growth in medical value travel is likely to further fuel the growth of the private healthcare delivery market in the country. which owns and operates the Escorts hospital chain (including three majority-owned hospitals) in September.• • • • • Socio-economic and demographic changes within the Indian population have increased the incidence of lifestyle diseases like cancer. particularly the urban middle class. We believe we are well-positioned to serve this increasing demand for sophisticated medical procedures and explore emerging opportunities in this growing market. 2005 and March 31. Weighted average return on net worth 39 EPS Unconsolidated (Rs. 2005 Year ended March 31. primarily consisting of two owned Hospitals in Mohali and Amritsar. March 31.81) (3. 2006. 2004. The increasing awareness about health and medical procedures has created increased demand for advanced healthcare services. P/E based on the year ended March 31. is likely to lead to higher per capita expenditure on treatment of lifestyle diseases The recent entry of private insurance companies. resulting in IHL becoming a majority owned subsidiary of the Company in March. 2006 Weighted Average 2. 2006. 2006. 2004 Year ended March 31. 2006 to September 24. particularly tertiary and quaternary healthcare services.77) (2. which has deepened health insurance penetration in India.47) Weight 1 2 3 . see the sections titled “Industry” and “Our Business” beginning on pages [●] and [●] of this Draft Red Herring Prospectus. Weighted average earnings per share (EPS) Financial Period Year ended March 31. 2005 and March 31. 2006. the Company also acquired a majority stake in IHL. Price Earnings Ratio (P/E Ratio) a. March 31. and does not fully reflect the effect of the acquisitions mentioned above. Quantitative Factors The information presented in this section is derived from the Company’s unconsolidated audited restated financial statements for the years ended March 31.

[●] per Equity Share has been determined on the basis of the demand from investors through the Book Building Process and is justified based on the above accounting ratios.11 3. 2006 Weighted Average Return on Net Worth – Unconsolidated (%) -25% -67% -52% -53% Weight 1 2 3 4.81) 11. Return on Net Worth and Net Asset Value of the Company are based on the last audited unconsolidated restated financial statements for the year ended March 31.8 Return on Net Worth (%) -52% 12. Issue Price per Equity Share is Rs.43 128.) Fortis Healthcare Limited (1) Peer Group (2) Apollo Hospitals (4. 2004. 6. 2005 Year ended March 31.92 7. 5.Financial Period Year ended March 31. 2006. Minimum Return on Increased Net Worth Required to Maintain Pre-Issue EPS.3 P/E (times) [●] 35. See the sections titled “Risk Factors” and “Financial Statements” beginning on pages [●] and [●] of this Draft Red Herring Prospectus. NAV per Equity Share for the year ended March 31. c. Net Asset Value (NAV) a. The minimum return on increased net worth required to maintain pre-Issue EPS on an unconsolidated basis is [●]%. a.7 1) Earnings Per Share.3% Net Asset Value per Equity Share (Rs. [●]. 2004 Year ended March 31. [●]. 40 . 2006 Weighted Average Net Asset Value per Equity Share (Rs. [●] is justified in view of the above qualitative and quantitative parameters. 2006. NAV per Equity Share after the Issue is Rs.) 7. 2004 Year ended March 31. b.43 5. 2006 to September 24. 2005 and 2006 is as follows: Financial Period Year ended March 31. 2) Source: “Capital Market” Volume XXI/ 14 dated September 11.) – Unconsolidated 3. The BRLMs believe that the Issue Price of Rs. 2005 Year ended March 31.54 Weight 1 2 3 The Issue Price of Rs. Comparison with Industry Peers EPS (Rs.

New Delhi – 110 025.R. Batliboi & Co Chartered Accountants Per Raj Agrawal Partner Membership No: 82028 Place: New Delhi Date: September 29. Statement of Possible Tax Benefits available to the Company and its shareholders We hereby report that the enclosed statement states the possible tax benefits available to the Company and to the shareholders of the Company under the Income Tax Act. Okhla Road. Fortis Healthcare Limited.STATEMENT OF TAX BENEFITS Auditor’s Report The Board of Directors. the Company may or may not choose to fulfill. presently in force in India. Hence. 1961 and Wealth Tax Act. which based on business imperatives the Company faces in the future. The contents of the enclosed statement are based on information. The benefits discussed in the enclosed statement are not exhaustive. each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. Escorts Heart Institute & Research Centre. the ability of the Company or its shareholders to derive the tax benefits is dependent upon their fulfilling such conditions. explanations and representations obtained from the Company and on the basis of their understanding of the business activities and operations of the Company. Dear Sirs.2006 41 . or ii) the conditions prescribed for availing the benefits have been / would be met with. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws. For S. 1957. We do not express any opinion or provide any assurance as to whether: i) the Company or its share holders will continue to obtain these benefits in future.

and intangible assets such as patent. However. is eligible for 100% deduction for first five years subject to conditions specified in that section. etc. c) In terms of Section 88E of the Act. MAT credit in respect of MAT paid prior to AY 2007-08 shall be available for set-off upto 5 years succeeding the year in which the MAT credit initially arose. However. long term capital gains of a company shall be taken into account in computing tax payable under section 115JB. which based on business imperatives it faces in the future. Credit eligible for carry forward is the difference between MAT paid and the tax computed as per the normal provisions of the Act. 2003 by domestic companies) received on the shares of any company is exempt from tax. distributed or paid on or after April 1.e. trademark. 1. capital asset held for the period of more than twelve months) entered into in a recognized stock exchange in India and being such a transaction. 1961 (the Act) Under section 10(34) of the Act. the ability of the Company or its Shareholders to derive the tax benefits is dependent upon fulfilling such conditions. 1998 Under section 80-IB of the Act.3 1. 2. Hence.2 1. 1961 The tax benefits listed below are the possible benefits available under the current tax laws in India. plant and machinery. income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income-tax in the hands of the shareholders. if acquired after March 31. copyright.e. b) Under Section 10(38) of the Act. Several of these benefits are dependent on the Company or its Shareholders fulfilling the conditions prescribed under the relevant tax laws. In terms of Section 115JAA (1A) of the Act tax credit shall be allowed for any Assessment Year commencing on or after April 01.Under the Income-tax Act. Under Section 32 of the Act.4 2. profits of an undertaking deriving profits from the business of operating and maintaining a hospital in rural area. Finance Act 2006 has introduced section 80AC which provides that no deduction under section 80-IB shall be allowed if the return is not filed on or before the due date. 1. it may not choose to fulfill. the Securities Transaction Tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of the business would be 42 1. as per Finance Act 2006 MAT credit for MAT paid for AY 2007-08 or thereafter shall be available for set-off upto 7 years succeeding the year in which the MAT credit initially arose. However. shall be exempt from tax. which is chargeable to Securities Transaction Tax. etc.1 . licenses. The following tax benefits shall be available to the Company and the prospective shareholders under Direct Tax. dividends declared. The credit is available for set off only when tax becomes payable under the normal provisions and that tax credit can be utilized to set-off any tax payable under the normal provisions in excess of MAT payable for that relevant year. the Company can claim depreciation allowance at the prescribed rates on tangible assets such as building. To the Members of the Company – Under the Income Tax Act Resident Members a) Under Section 10(34) of the Act. as per Finance Act 2006. 2006. furniture and fixtures. any income by way of dividends referred to in Section 115O (i. long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company (i. know-how.1 To the Company .STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE INCOME TAX ACT.

capital gains arising from transfer of short term capital assets. on their entire income including income from investment in the shares of the company. subject to the conditions specified therein. long term capital gains [not covered under Section 10(38) of the Act] arising on transfer of shares in the Company. if the capital gain are invested within a period of six months from the date of transfer in the bonds redeemable after three years and issued by – (i) (ii) National Highways Authority of India (‘NHAI’) constituted under Section 3 of National Highways Authority of India Act. long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company or unit of an equity oriented mutual fund (i. If only a part of the net consideration is so reinvested. e) Under Section 54EC of the Act. being an equity share in a company which is subject to Securities Transaction Tax will be taxable under the Act @ 10% (plus applicable surcharge and educational cess). capital asset held for the period of more than twelve months) entered into in a 43 b) . if the new bonds are transferred or converted into money within three years from the date of their acquisition. g) Under Section 111A of the Act. the exemption shall be proportionately reduced. or Rural Electrification Corporation Limited (‘RECL’). will be exempt if the net sales consideration from such transfer is utilized for purchase of residential house property within a period of one year before or two year after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer. public financial institutions or mutual funds registered under the Securities and Exchange Board of India (SEBI) or authorized by the Reserve Bank of India are eligible for exemption from income-tax. f) Under Section 54F of the Act. where in the case of an individual or HUF capital gain arise from transfer of long term assets [other than a residential house and those exempt u/s 10(38) of the Act] then such capital gain. subject to the conditions and to the extent specified therein. the amount so exempted shall be chargeable to tax subsequently. Under Section 10(38) of the Act.eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions. d) As per the provisions of Section 10(23D) of the Act. shall be taxed at a rate of 20% (plus applicable surcharge and educational cess on income-tax) after indexation as provided in the second proviso to Section 48 or at 10% (plus applicable surcharge and educational cess on income-tax) (without indexation). 1956 and notified by the Central Government in the Official Gazette for the purpose of this section. a company formed and registered under the Companies Act.e. capital gain arising from transfer of long term capital assets [other than those exempt u/s 10(38)] shall be exempt from tax. If only part of the capital gain is so reinvested. 1988 and notified by the Central Government in the Official Gazette for the purpose of this section. all mutual funds set up by public sector banks. h) Under Section 112 of the Act and other relevant provisions of the Act. However. income earned by way of dividend income from a domestic company referred to in Section 115-O of the Act. 2. if shares are held for a period exceeding 12 months. at the option of the Shareholders. subject to the conditions and to the extent specified therein.2 Non Resident Indians/Members other than Foreign Institutional Investors and Foreign Venture Capital Investors a) By virtue of Section 10(34) of the Act. the exemption shall be proportionately reduced. is exempt from tax in the hands of the recipients.

long term capital gains [not covered under Section 10(38) of the Act] arising on transfer of shares in the Company. Under Section 54EC of the Act. subject to the conditions and to the extent specified therein. “Special Provisions Relating to certain incomes of Non-Residents”.e. shall be exempt from tax. will be exempt if the net sales consideration from such transfer is utilized for purchase of residential house property within a period of one year before or two year after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer. shall be taxed at applicable rates. or Rural Electrification Corporation Limited (‘RECL’). 44 . 1988 and notified by the Central Government in the Official Gazette for the purpose of this section. where in the case of an individual or HUF capital gain arise from transfer of long term assets [other than a residential house and those exempt u/s 10(38) of the Act] then such capital gain.e. which is chargeable to Securities Transaction Tax. c) In terms of Section 88E of the Act. subject to the conditions and to the extent specified therein. Taxation of Income from investment and Long Term Capital Gains [other than those exempt u/s 10(38)] g) h) i) (i) A non-resident Indian. capital gains arising from transfer of short term capital assets. a company formed and registered under the Companies Act. Under Section 112 of the Act and other relevant provisions of the Act. Under the first proviso to section 48 of the Act. in computing the capital gains arising from transfer of shares of the company acquired in convertible foreign exchange (as per exchange control regulations). i. Under Section 111A of the Act. Cost indexation benefits will not be available in such a case. if shares are held for a period exceeding 12 months. the exemption shall be proportionately reduced. the Securities Transaction Tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of the business would be eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions. f) Under Section 54F of the Act. an individual being a citizen of India or person of Indian origin has an option to be governed by the special provisions contained in Chapter XIIA of the Act. the exemption shall be proportionately reduced. 1956 and notified by the Central Government in the Official Gazette for the purpose of this section. if the capital gain are invested within a period of six months from the date of transfer in the bonds issued by – d) e) (i) (ii) National Highways Authority of India (‘NHAI’) constituted under Section 3 of National Highways Authority of India Act. in case of a non resident. protection is provided from fluctuations in the value of rupee in terms of foreign currency in which the original investment was made. being an equity share in a company which is subject to Securities Transaction Tax will be taxable under the Act @ 10% (plus applicable surcharge and educational cess). capital gain arising from transfer of long term capital assets [other than those exempt u/s 10(38) of the Act] shall be exempt from tax. the amount so exempted shall be chargeable to tax subsequently.recognized stock exchange in India and being such a transaction. However. i. If only a part of the net consideration is so reinvested. and If only part of the capital gain is so reinvested. if the new bonds are transferred or converted into money within three years from the date of their acquisition.

Under Section 111A of the Act. (iii) Under provisions of section 115F of the Act. where shares in the company are subscribed for in convertible Foreign Exchange by a non-resident Indian. long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company (i. In other words. 2. being an equity share in a company which is subject to Securities Transaction Tax will be taxable under the Act at the rate of 10% (plus applicable surcharge and educational cess). the benefit of 45 b) c) d) e) . capital asset held for the period of more than twelve months) entered into in a recognized stock exchange in India and being such a transaction. being shares in a company (other than those mentioned in point b) above). purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from. In such a case the tax on investment income and long term capital gains would be computed as per normal provisions of the Act. The amount so exempted shall be chargeable to tax subsequently. section 10(38) of the Act] arising to a non-resident Indian from the transfer of shares of the company subscribed to in convertible Foreign Exchange shall be exempt from income tax if the net consideration is reinvested in specified assets within six months of the date of transfer. are taxed at the rate of 10% (plus applicable surcharge and education cess). Under Section 115AD capital gain arising on transfer of long term capital assets. the exemption shall be proportionately reduced. income earned by way of dividend income from another domestic company referred to in Section 115-O of the Act. are exempt from tax in the hands of the institutional investor. which is chargeable to Securities Transaction Tax. shall be exempt from tax. If only part of the net consideration is so reinvested. Such capital gains would be computed without giving effect to the first and second proviso to Section 48 of the Act. In terms of Section 88E of the Act. capital gains arising from transfer of short term capital assets. if the specified assets are transferred or converted within three years from the date of their acquisition.(ii) Under Section 115E of the Act. long term capital gains [not covered under (iv) Under provisions of Section 115-G of the Act. a non resident Indian may elect not to be governed by the provisions of Chapter XII-A of the Act for any assessment year by furnishing his return of income under section 139 of the Act declaring therein that the provisions of the Chapter shall not apply to him for that assessment year and if he does so the provisions of this Chapter shall not apply to him. the Securities Transaction Tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of the business would be eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions. capital gains arising to the non resident on transfer of shares held for a period exceeding 12 months shall [in cases not covered under Section 10(38) of the Act] be concessionally taxed at a flat rate of 10% (plus applicable surcharge and educational cess) without indexation benefit but with protection against foreign exchange fluctuation under the first proviso to Section 48 of the Act.3 Foreign Institutional Investors (FIIs) a) By virtue of Section 10(34) of the Act. (v) Under Section 115-I of the Act.e. Under Section 10(38) of the Act. it shall not be necessary for a non-resident Indian to furnish his return of income if his only source of income is investment income or long term capital gains or both arising out of assets acquired.

Wealth Tax Act. subject to the conditions and to the extent specified therein. If only part of the capital gain is so reinvested. income of Venture Capital Company which has been granted a certificate of registration under the Securities and Exchange Board of India Act. In respect of non-residents. However. In view of the individual nature of tax consequence. f) Under Section 54EC of the Act. operating under a registered trust deed or a venture capital scheme made by Unit Trust of India. a company formed and registered under the Companies Act. 1957 Shares in a company held by a shareholder will not be treated as an asset within the meaning of Section 2(ea) of Wealth-tax Act. c) 46 . 1988 and notified by the Central Government in the Official Gazette for the purpose of this section. set up for raising funds for investment in a Venture Capital Undertaking. if the new bonds are transferred or converted into money within three years from the date of their acquisition. if any between India and the country in which the non-resident has fiscal domicile.indexation. hence. 1992 and fulfilling such conditions as may be notified in the Official Gazette. 2. wealth tax is not leviable on shares held in a company. 3. 1956 and notified by the Central Government in the Official Gazette for the purpose of this section. if the capital gain are invested within a period of six months from the date of transfer in the bonds issued by – (i) (ii) National Highways Authority of India (‘NHAI’) constituted under Section 3 of National Highways Authority of India Act. as mentioned under the two provisos would not be allowed while computing the capital gains. is exempt from income tax.4 Venture Capital Companies / Funds As per the provisions of section 10(23FB) of the Act. each investor is advised to consult his/ her own tax adviser with respect to specific tax consequences of his/ her participation in the scheme. the exemption shall be proportionately reduced. direct or indirect. Notes: a) b) All the above benefits are as per the current tax law and will be available only to the sole/ first named holder in case the shares are held by joint holders. capital gain arising from transfer of long term capital assets [other than those exempt u/s 10(38) of the Act] shall be exempt from tax. and Venture Capital Fund. 1992 and notified as such in the Official Gazette. 1957. taxability of capital gains mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement. the amount so exempted shall be chargeable to tax subsequently. which has been granted a certificate of registration under the Securities and Exchange Board of India Act. or Rural Electrification Corporation Limited.

In 2004.8% OF THE GROSS DOMESTIC PRODUCT IN 2003 AND WAS LOWER THAN IN 1999.6%). 2150 BILLION. according to the WHO. Thailand and South Korea had an average of 4.000 PER CAPITA. WHEN IT CONSTITUTED 5.The World Health Report 2006” published by the World Health Organization in 2006 (the “WHO”). uncertainties and numerous assumptions and is subject to change based on various factors. 1. “Healthcare”. Moreover. 2.INDUSTRY The industry data set forth below is based on industry information collected by third parties.5 hospital beds per thousand people in 2001. CHINA (5.000) Number of Nurses Nurses – Density (Per 1.06 in China and 1. THIS EQUALS APPROXIMATELY RS.5% OF THE GROSS DOMESTIC PRODUCT. 1.000) 47 . in absolute terms. which is mentioned among the countries with the greatest shortage.8% of total healthcare expenditure in India. in 2002 (the “Planning Commission (2002)”).) Physicians – Density (Per 1. ACCORDING TO CEHAT. per capita total expenditure on healthcare was US$ 82 in India as compared to US$ 597 in Brazil and US$ 278 in China during 2003.60 per thousand in 2005 compared to 1. of health workers.57 in the Republic of Korea. the “Tenth Five Year Plan (2002-2007)” published by the Planning Commission. BUT HIGHER THAN SPENDING IN COUNTRIES LIKE THAILAND (3. compared to 3.000) Number of Physicians (Nos. 1.6%) AND MEXICO (6. investment decisions should not be based on such information.3 beds per thousand people. The following table sets forth certain key healthcare indicators for India and certain other countries: Government Expenditure on Healthcare (% of total Healthcare Expenditure) Per Capita Total Expenditure on Healthcare (US$) Life Expectancy at Birth (Years) Infant Mortality Rate (Per 1. according to the WHO. INTRODUCTION ACCORDING TO THE WHO. AND 6. THIS IS LOWER THAN HEALTHCARE SPENDING IN OTHER DEVELOPING COUNTRIES SUCH AS BRAZIL (7. THE TOTAL VALUE OF THE HEALTH SECTOR IN INDIA IN 2006 IS OVER RS. CRIS-INFAC ESTIMATED THAT INDIA SPENT ROUGHLY RS. This data has not been prepared or independently verified by us or the BRLMs or any of their respective affiliates or advisors. physicians in India only numbered 0. as compared to 45. WITH APPROXIMATELY RS. Research Centre of Anusandhan Trust (“CEHAT”).75 in the Republic of Korea. while countries such as China. Such data involves risks. despite increasing expenditure on healthcare. government spending on healthcare amounted to 24. including those discussed in the section titled “Risk Factors” in this Draft Red Herring Prospectus.2%). India lags behind other developing nations in many health categories. TOTAL EXPENDITURE ON HEALTHCARE IN INDIA CONSTITUTED 4. Accordingly. The industry sources cited herein include the CRIS-INFAC Hospitals Annual Review published in November 2005 (“CRIS-INFAC”).80 per thousand people in 2004. including life expectancy and infant mortality.” published in October 2002 by the Confederation of Indian Industry and McKinsey & Company (“CII-McKinsey”). 910 BILLION BEING SPENT ON HEALTHCARE DELIVERY SERVICES. Indian healthcare infrastructure and the number of healthcare professionals also compare poorly to other developing countries.8%).3% in Brazil and 49.3%) AND MALAYSIA (3. According to CII-McKinsey. India had only 1.1%.4% in South Korea. “Healthcare in India: The Road Ahead.84 in Brazil. “Working Together for Health -. published in 2006 by the Centre for Enquiry into Health and Allied Themes.15 in Brazil. Similarly. with nurses numbering only 0. a report by Ernst & Young for India Brand Equity Foundation and published in February 2006 (“IBEF-E&Y”) and “Changing Health Budgets” by Ravi Duggal. and 1.700 BILLION ON HEALTHCARE IN 2004. The worldwide nursing shortage is also reflected in India. Government of India. Brazil.05 in China. According to the WHO.

obstetrics and gynecology. Although many parts of India remain poor and access to basic healthcare remains the focus in those regions. CII-McKinsey estimates that the total spending in this market in India was approximately Rs. and limited coverage of other specialties including gastroenterology. 2002 for Japan. and cardiology.603 0. According to CRIS-INFAC.889 133. urology.4 49.358.111 1. oncology.37 Source: The WHO 2005 for India. socio-economic and demographic changes within certain segments of the Indian population. have created increased demand for advanced healthcare services.57 0.389 5.074 260 2. according to CRIS-INFAC.79 12. CII-McKinsey estimates that the total spending in this market in India was approximately Rs.628 704. They can be divided into: • Primary care facilities.333 171. particularly in urban areas.669. which offer basic.0 85.37 1.8 45.3 36.06 0. 910 billion spending for healthcare delivery in India in 2004.2004 2004 2003 2003 2000 (1) 2000 (1) 2000 (1) 2000 (1) India Brazil China Malaysia Mexico Republic of Korea Thailand Japan United Kingdom United States (1) 62 70 72 72 74 77 70 82 79 78 85 34 31 12 28 6 21 4 6 8 24. neurology.82 7.000 31.12 9.98 1. Such facilities offer treatment in specialty and “super-specialty” areas of cardiology.6 81. Tertiary care facilities. 250 billion in 2001.75 2. including simple surgical procedures. among others.678 83.90 1. which offer both inpatient and outpatient medical services. Not only is there a growing awareness and sophistication among healthcare consumers who are demanding more services.2 58. this segment is expected to grow faster 48 • • .56 865.05 1.000 16.70 1. Secondary care facilities.60 1. 2003 for South Korea.7 44.605 993.825 198. 370 billion in 2001.98 2.153 1. Primary care facilities are typically clinics with one or more general practitioners on site.641 730.364.80 3. diabetes and cardiovascular disease.6 82 597 278 374 582 1. and orthopedics. Structure of the Healthcare Delivery Industry Type of Facilities Healthcare facilities in India vary by the level and complexity of treatment offered. there is also an increase in the incidence of so-called “lifestyle” diseases like cancer. and 1997 for the United Kingdom. 2001 for China.129 88.4 61.2 46. Such facilities offer basic medical specialties including internal medicine. pediatrics. which are more expensive to treat than communicable and infectious diseases.84 1.332 2.15 1. which offer highly specialized and sophisticated medical care and surgical procedures in a primarily inpatient setting.897 75.045 22.35 0. quality of infrastructure facilities and availability of qualified doctors and support staff.30 2.801 0. point-of-contact medical services and healthcare prevention services in an outpatient setting. CII-McKinsey estimates that between 5% and 10% of total beds in India were in the tertiary care segment in India in 2001.244 2. dermatology.135 659. CRISINFAC estimates that the expenditure on tertiary care hospitals comprised approximately 15% of the total Rs.435 251.146 195.711 645.

India’s growing middle class is. health insurance and telemedicine. require more basic facilities such as examination rooms and less complex operating rooms. intensive care units. when compared with the OPD. therefore. facilities owned and operated by for-profit corporations. and admit patients from. OPD facilities. Certain for-profit hospital operators have become integrated healthcare providers by expanding into a wide variety of healthcare services including pharmacy. Healthcare facilities in India typically have both inpatient (IPD) and outpatient (OPD) departments. operating theaters. pharmaceutical services. facilities owned and operated by charitable trusts. These percentages may vary from hospital to hospital. and there is a strain on existing resources.than the primary or secondary care segments because of an expected rise in complex lifestyle diseases like cardiovascular diseases. neurosurgical and joint-replacement surgeries. the government. Privately-operated healthcare delivery accounted for over half of all inpatient hospital visits in India and 82% of all outpatient visits according to CRIS-INFAC’s report published in 2005. including advanced cardiac. Public vs. IPD facilities also typically require more extensive capital expenditures for beds. smaller primary and secondary care facilities in local communities. Private Provision of Healthcare Services Although access to government run hospitals is widely available in both urban and rural areas in India. the IPD represented approximately 10% of total volume of patient visits and 85% of revenues. by contrast. Ownership and Operating Models There are five basic operating models for hospitals in India: • • • • • facilities owned and operated by the government and local bodies. • Quaternary care facilities. The following chart shows hospitals and dispensaries in the private and public sector from both rural and urban areas: 49 . Patients may be required to wait in long queues for treatment at these hospitals. According to CRIS-INFAC. nursing services. adding tertiary and quaternary care facilities that serve as hubs for. indicates that in most single and multispecialty hospitals in India. in its 2005 report.e. joint ventures and public-private partnerships). referring an average of approximately 30% of outpatients in 2004 to the IPD.. OPDs are also an important source of patients for a hospital’s diagnostic centers and IPDs. local bodies or for-profit institutions but operated by separate for-profit institutions. increasingly choosing private hospitals. and many doctors are over-worked. CRIS-INFAC. healthcare delivery infrastructure is typically not well-developed. institutions and facilities owned by charitable trusts. laboratory and diagnostic centers and a central sterile and supply department. Other forprofit hospital operators have chosen to focus primarily on healthcare delivery. diabetes and cancer. which offer similar services to tertiary care facilities with a focus on “super-specialty” surgical procedures. and collaborations between government bodies and for-profit corporations (i.

a majority of the private facilities in India in 2001 were small: approximately 84% had fewer than 30 beds and only 6% had more than 100 beds. 24 in 2000. LOCAL BODIES PVT. According to CII-McKinsey.30000 25000 20000 15000 10000 5000 0 TOTAL GOVT. the average cost of treatment per day for inpatients at a public healthcare facility was Rs. which is a fraction of the cost incurred at a private healthcare facility. According to the Planning Commission (2002). the costs of such services tend to be higher. The following charts show the distribution of inpatients between public and private hospitals among various states in India and the average hospital charge per inpatient day for public and private hospitals: 50 . although a significant share of healthcare services in India is delivered by the private sector rather than the public sector. AND VOLUNTARY Hospitals Dispensaries Source: Planning Commission (2002) Private sector healthcare services range from those provided by large corporate hospitals and smaller hospitals or nursing homes to clinics/dispensaries run by qualified personnel and services provided by unlicensed practitioners. Haryana and Maharashtra going to private hospitals. The use of private facilities also tends to vary from state to state in India with a majority of patients in the states of Punjab. In addition.

While the first four factors are important to attract patients and improve occupancy 51 HI M M A C H AL AL L IN D IA .5 76 60 80 100 52 50 50 50 47 45 62 62 64 65. project cost and ability to control operating costs. brand equity.Distribution of Inpatients between Public and Private Hospitals HIMACHAL PRADESH ORISSA WEST BENGAL NORTH-EAST RAJASTHAN MADHYA PRADESH UTTAR PRADESH ALL INDIA KARNATAKA KERALA TAMILNADU GUJARAT BIHAR ANDHRA PRADESH MAHARASHTRA PUNJAB HARYANA 0 24 20 40 Percent 38 38 36 34.5 63 48 50 50 50 53 55 Public Private 81 77 74 37 93 89 19 23 26 11 7 Source: Planning Commission (2002) Average Hospital Charge per Inpatient Day by Public and Private Hospitals 350 Public 300 297 269 251 250 203 200 158 150 154 140 115 100 51 50 16 0 26 13 12 11 40 28 4 4 Private 201 24 SH TR A D ES H RA T AL A D ES H O R IS SA ES H N A DU JA ST H A TA M IL N G U JA PR A PR AD KE R PR A AR A RA HY A U TT A R M A H A D Source: Planning Commission (2002) Important factors for success for a private sector healthcare provider are location. quality of care provided. choice of specialty and specialty level.

while the Indian health insurance industry is open to the private sector. Punjab and Haryana going to private healthcare facilities. Health insurance in India may be categorized as follows: • Private Insurance. According to CII-McKinsey. less than 10% of the population in India was covered by some form of health insurance. Premium paid through an employer’s health plan or directly by the insured. The following charts show the private and public spending on select healthcare services by those above and below the poverty line. the other two. 52 . most insurance companies have participated only to a limited extent. of which 97% was out-of-pocket private expenditure. with much of the represented spending coming from higher income groups.2% of total health expenditure in India in 2003. 82% of healthcare spending came from private out-of-pocket funding. and the breakdown by state of private spending on healthcare services at private and public facilities: Private & Public Spending on Select Healthcare Services for those above and below the poverty line 100 80 60 40 20 0 APL* BPL** APL BPL APL BPL APL BPL APL BPL Immunisation Antenatal care Institutional deliveries Hospitalization Outpatient care Public Sector * Above poverty line Private Sector ** Below poverty line Source: Planning Commission (2002) According to the Planning Commission (2002). large international health insurance companies have adopted a wait-and-see policy before deciding whether to enter. According to the WHO. according to CRIS-INFAC.rates and profitability. are important to ensure the financial viability of the hospital. in 2004.4% of the population) in 2001. the recent entry of private insurance companies has deepened health insurance penetration in India. As a result of regulatory barriers. According to CRIS-INFAC. project cost and operating margins. that is. private health expenditure was 75. Government-owned insurance companies covered approximately four million people (0. There are also significant differences in private spending on health care services in public and private facilities between states. Healthcare Funding and Insurance Healthcare spending in India is primarily sourced from private funds. with a large part of private expenditure in states like Kerala.

htm (as accessed on September 24.edu/aiims/aboutaiims/aboutaiims_glance.164*** 642 1. S. 2006) ^ Includes Escorts hospitals. In addition. Number of beds * 2. According to CII-McKinsey. Q P. T. S: Secondary. insurer. T S. and is sourced from CRIS-INFAC and hospital published data. • • PRIVATE HEALTHCARE PROVIDERS According to CRIS-INFAC. Community Insurance. namely the Apollo Group. nongovernmental organization. Q T. but does not include beds in satellite/heart command centers * Providers may not use the same criteria for counting the number of beds ** P: Primary. Scheme managed by local provider.593 ~530 700 ~7. Max Healthcare. except as indicated. a large government-run hospital in the NCR.543 Year 2005 2005 2006 2005 2005 2005 2000 Location(s) in India Pan India South NCR NCR South.• Social Insurance. Q P. such schemes covered approximately 50 million people in India (5% of the population) in 2001. BESIDES COMPETING WITH EACH OTHER. S. Q P. Q Apollo CARE Fortis Healthcare^ Max Healthcare Wockhardt Manipal Group All India Institute of Medical Sciences Source for Apollo (number of beds): Apollo published figures. Four types of community insurance exist in India: (i) insurer-driven. S. T. and Wockhardt Hospitals. Employer Spending. CARE Hospitals. T P.000 1. local community insurance schemes covered approximately 50 million people in India (5% of the population) in 2001. THESE INCLUDE MAJOR HOSPITALS SUCH AS THE ALL INDIA INSTITUTE OF MEDICAL SCIENCES IN NEW DELHI. and (iv) government-managed. THE MAJOR PRIVATE HEALTHCARE PROVIDERS ALSO COMPETE WITH HEALTHCARE DELIVERY FACILITIES THAT ARE OWNED BY INDIVIDUALS OR NON-PROFIT ENTITIES SUPPORTED BY ENDOWMENTS. T. are also included in the table below. West and East South NCR Type of Facility** P. (ii) provider-driven. According to CII-McKinsey. statistics for the All Institute of Medical Sciences.aiims. AS DESCRIBED IN THE TABLE ABOVE. T. associates or those in managed hospitals. The table below summarizes certain key statistics regarding these healthcare providers. Employer provides reimbursement or complimentary access to employer’s own healthcare facilities. THE LARGE PRIVATE HEALTHCARE PROVIDERS ARE ACTIVELY SEEKING GROWTH BY ENHANCING THEIR REACH ACROSS THE COUNTRY THROUGH THE 53 . number of beds only includes beds in use. According to CII-McKinsey. joint ventures. social insurance covered approximately 30 million people in India (3% of the population) in 2001. GOVERNMENTAL AGENCIES AND CHARITABLE CONTRIBUTIONS IN CERTAIN LOCATIONS. Q: Quaternary *** Number of beds does not include beds operated by subsidiaries. T: Tertiary. there are six major providers of private healthcare in India. S. Manipal Group. 2005 Source for Fortis Healthcare (number of beds): Company data at September 1. association of the insured or governmental authority. Fortis Healthcare. Mandatory wage-based contribution from employee. 2006 Source for All India Institute of Medical Sciences (number of beds): http://www. (iii) self-managed.

New Delhi. For instance. an affiliate of the Joint Commission on Accreditation of Healthcare Organization. there has been wide variance in the quality of healthcare services provided in India. which is an independent not-for-profit organization and is the predominant standards-setting and accrediting body in healthcare in the United States. an autonomous body established by the Quality Council of India to set benchmarks in the healthcare industry. India had no national accreditation body for hospitals. Mumbai. ACQUISITION OF EXISTING HOSPITALS AND ARRANGEMENTS WITH SMALL HEALTHCARE PROVIDERS. which first published its hospital accreditation standards and procedures in February 2006. FREE HEALTH CHECK-UPS. 2006. 2001 and 2020: 54 . The following charts show India’s disease burden estimates for 1990. As a result. and Apollo Hospital. ACCREDITATION AND CERTIFICATION Until recently. CRIS-INFAC also notes the expected increase in the share of people older than 65. AS WELL AS MEDICAL TEACHING INSTITUTIONS. Chennai. are also now applying for international accreditation from bodies such as the Joint Commission International (JCI). which monitors the quality of implementation of internal operational procedures. Wockhardt Hospital. especially those run by large for-profit organizations. Indian hospitals may apply for accreditation from the newly formed National Accreditation Board for Hospitals and Healthcare Providers (NABH). As of June 30. UPGRADING THEIR EXISTING FACILITIES AND REACHING OUT TO PROSPECTIVE PATIENTS THROUGH INITIATIVES SUCH AS COMMUNITY OUTREACH PROGRAMS. a population CRIS-INFAC identifies as more prone to lifestyle diseases. EMERGING TRENDS AND INDUSTRY OUTLOOK SHIFTING DEMOGRAPHICS AND SOCIO-ECONOMIC TRENDS Socio-economic and demographic changes within the Indian population have increased the incidence of lifestyle diseases like cancer. Hyderabad. diabetes and cardiovascular disease. WIDENING THEIR PRESENCE ACROSS PRIMARY. Certain hospitals in India have also applied for and received certification from the International Standards Organization (ISO).5% in 2000 to 65% in 2010. are expected to increase as a share of the total population from 61. Indraprastha Apollo Hospital. a group that exhibits a higher incidence of musculoskeletal diseases. people aged 15 to 64. According to the Planning Commission (2002). RECENT PRESS REPORTS INDICATE THAT OTHER ENTITIES ALSO PLAN TO ESTABLISH “MEDICITIES” WITH FACILITIES OFFERING VARIOUS LEVELS OF HEALTHCARE SERVICES.BUILDING OF NEW HOSPITALS. four hospitals have been accredited by the JCI: Apollo Hospital. Today. AND ARRANGEMENTS WITH EMPLOYERS TO PROVIDE HEALTHCARE SERVICES TO THEIR EMPLOYEES. it is estimated that the occurrence of non-communicable diseases is likely to grow faster than communicable and infectious diseases over the next five to ten years and that it will constitute approximately 57% of disease occurrences by 2020. Certain Indian hospitals. SECONDARY AND TERTIARY HEALTHCARE.

Child & Communicable 56% Non-Communicable 29% Source: Planning Commission (2002) Source: CII-McKinsey The increasing affluence of the Indian population and increased awareness of healthcare options as a result of improved literacy and education is also likely to contribute to the increase in the demand for healthcare services.1990 Injuries 15% Maternal. CRIS-INFAC notes that the rapid growth of the middle and upper classes in 55 .Disease Burden Estimates for India .

1. respectively. Private healthcare is expected by CII-McKinsey to continue to be the largest component of healthcare spending in 2012 and could increase to Rs. 4. cancer. Inpatient expenditures on cancer and heart diseases services are expected to reach approximately Rs.5%.2 billion in 2012. Shifting Spending Patterns The growth in private healthcare delivery is likely to be accompanied by a shift in spending patterns with greater emphasis on inpatient spending to tackle the incidence of lifestyle diseases. 56 . 140. diarrhea and gastro-intestinal diseases.9 billion. will lead to higher per capita expenditure on treatment of lifestyle diseases. Outpatient expenditure is expected to decrease in terms of share but increase in absolute terms to Rs. cancer. 910 billion in 2004. heart disease and maternal care. Increasing Penetration of Health Insurance A number of private insurance companies have entered the Indian market and are establishing arrangements with hospitals to provide treatment to their subscribers without upfront cash payments. especially cancer and cardiovascular disease. Competition among insurers is likely to lead to increased marketing efforts which in turn could lead to an increase in the number of Indians with voluntary health insurance which in turn is likely to lead to higher affordability of healthcare services. accidents and injuries. Approximately 85% of private inpatient expenditure was spent on acute infections. According to CII-McKinsey.5% of India’s gross domestic product was spent on health in 2002. According to the Planning Commission (2002). Market Growth Due to the increase in treatment of complex lifestyle diseases. although the insurance companies and employers will.2% of India’s gross domestic product was spent on healthcare in 2004. CII-McKinsey expects that these two diseases alone will constitute more than 35% of inpatient expenditure by 2012 (up from 27% in 2001). outpatient care accounted for approximately 61% of private healthcare spending. 170 billion in 2001 if the Government of India reaches its target spending level of 2% of the gross domestic product. spending patterns are expected to shift by 2012.9 billion or 5. by 2012. particularly the urban middle class. in 2001. up from 39% in 2001. CII-McKinsey expects public spending to double by 2012 from Rs.560 billion private healthcare spending. approximately US$34.6 billion and approximately Rs. According to CII-McKinsey. which are growing rapidly.560 billion by 2012 if health insurance coverage becomes more widely available to the upper and middle classes. and this figure is expected to touch 5. Of the expected Rs. 133. The potential increase in the penetration rate of medical insurance and employer plans could result in higher demand for premium healthcare services in India. 690 billion private healthcare expenditure in 2001. This growth is expected to be driven by the rise in lifestyle diseases. or approximately US$60.India. employers are increasingly subsidizing their employees’ health costs through direct arrangements with medical providers. heart disease and musculoskeletal diseases driving this increase. 740 billion in 2012 from approximately 61% of the Rs. with lifestyle diseases such as asthma. Further. of which 0. 1. according to CII-McKinsey. CRIS-INFAC expects the healthcare delivery market to double by 2010 from Rs. a segment that accounts for a substantial proportion of healthcare expenditure. the growth in income levels of the urban middle class and the expansion of healthcare infrastructure and health insurance across India.9% in 2001. inpatient spending will account for 47%. according to CII-McKinsey.9% was public expenditure. according to IBEF-E&Y. which generally entail higher average expenditure per treatment. with over 55% of outpatient expenditure on acute infections such as fevers. at the same time. up from 0. In addition. negotiate for lower rates to be charged by healthcare providers.

Pakistan.000 nurses will have to be trained over and above those who will be trained at current nursing schools by 2012. After taking into account the expected investment by government and other agencies during this period. and bring the hospital bed to population ratio to 1. a cardiovascular surgery. International patients choose India primarily because of the substantial difference in the cost of high-end surgery and critical care and quicker access to medical care in India vis-à-vis some highly developed countries.6.400 billion by 2012 in secondary and tertiary care hospitals. costs approximately US$4. which costs approximately US$6. In order to maintain the current doctor/nurse ratio of 1:1.000 billion to Rs. 100 billion industry by 2012. 1. India has recently introduced a visa category for individuals seeking medical treatment in India. an additional 520.000 international patients received medical treatment in India. and orthopedic surgery. Nepal. between 150.000 in 1995. Patients from approximately 55 countries were treated at Indian hospitals. However. which lack top-quality hospitals and health professionals. an additional 770.000 in India. medical colleges. up from approximately 10. according to CRIS-INFAC. creating this infrastructure in India will require investments of approximately Rs. most of the foreign patients are from nearby developing countries such as Afghanistan. In 2004.250 in Thailand. medical value travel in India is expected to grow to an approximately Rs. approximately 750. For example. which costs approximately US$50.900 in Thailand. According to CII-McKinsey.500 in India (Sources: CRIS-INFAC and IBEF-E&Y). almost 80% of this amount will need to come from the private sector.000. The cost of such medical care also compares favorably against costs of other more established medical tourism destinations like Thailand. nursing schools and hospital management schools. including 150.000 tertiary care beds. it is widely acknowledged that India’s infrastructure will need to be improved significantly. Bangladesh and Sri Lanka.000 additional beds. 1. INCREASED SPENDING ON INFRASTRUCTURE In order to meet the demand for healthcare in India and improve the availability of hospital beds and doctors. According to CII-McKinsey.MEDICAL VALUE TRAVEL According to CII-McKinsey.9:1. According to CII-McKinsey. will need to be added in India to the 2001 base of 1. patients from the US and Europe are relatively few.5 million beds to meet increasing demand for inpatient services by 2012. 57 .000 in the United States and approximately US$14. costs approximately US$6. CIIMcKinsey also estimates that 20% of the additional beds will be required for specialty healthcare needs such as cancer and cardiac diseases.000 and 180.000 doctors will be required over and above the numbers that will be added through existing medical colleges by 2012 to reach a ratio of one medical doctor per thousand people in India.

gastroenterology and mother and child care.OUR BUSINESS Overview We believe that we are one of the largest private healthcare companies in India. FHL made an additional Rs. we opened our first hospital in Mohali in 2001.6 million equity contribution to IHL. the results of IHL have been included in our restated consolidated financial statements with effect from December 20. 100. which provide comprehensive general healthcare to patients in their local communities. Since 2001.5 million. We are committed to delivering quality healthcare services to our patients in modern facilities using advanced technology and our teams of doctors. In addition. a multinational pharmaceutical company headquartered in India (“RLL”). 30. Drawing on the experience of our Promoters as promoters of Ranbaxy Laboratories Limited. orthopedics. The Escorts hospitals acquisition more than doubled our gross income and increased our expertise and prominence. especially in the cardiac care specialty area. together with our satellite and heart command centers. which commenced operations in August 2004.9% interest in International Hospital Limited (“IHL”) from the Promoter Group for total consideration of approximately Rs. according to information provided by CRIS-INFAC's report published in 2005. we have expanded our operations by opening multi-specialty hospitals (including some with superspecialty “centers of excellence”). nurses and other healthcare professionals. which also provide more advanced care to patients. with EHIRC serving as a super-specialty “center of excellence” for cardiac care. On March 20. On September 28. a provider of private healthcare services that owns and operates three majorityowned hospitals in north India and operates and manages a fourth hospital in collaboration with the Government of Chattisgarh (collectively. Also on March 20. 2006. the date on which IHL became a board-controlled subsidiary of FHL pursuant to an agreement between FHL and IHL. at the time of the acquisition. oncology. neuro-sciences. 2006.10 million (the “Escorts hospitals acquisition”). a “boutique” style hospital that focuses on women’s health and maternity care.850. based on the number of hospital beds. two of our hospitals. Escorts Heart Institute & Research Centre at New Delhi (“EHIRC”) and Escorts Heart Centre at Raipur (“EHCR”). Our hospital network consists of multi-specialty “spoke” hospitals. and super-specialty “hub” hospitals. we acquired a 99. including patients from our “spoke” hospitals and other hospitals in the surrounding area. focus primarily on cardiac patients. in which we currently own a 5% interest. 301. and enhanced our profile among patients. renal care. IHL owns Fortis Hospital. and with a vision of creating an integrated healthcare delivery system. and we operate and manage EHCR in collaboration with the Government of Chattisgarh. We also operate Fortis La Femme. Six of our hospitals are owned or majorityowned by us. the remaining five. a “boutique” style hospital and various satellite and heart command centers.5 million (the 58 . who follow international protocols. which provide secondary and tertiary healthcare to patients. We currently have a network of 12 hospitals primarily in north India. the “Escorts hospitals”) and. 2006. except for Fortis La Femme. 2002. Most of our hospitals are multi-specialty hospitals. are operated and managed by us but owned by trusts or societies or other corporate owners. Although the IHL acquisition did not occur until March 20. Noida. 15 satellite and heart command centers in hospitals across the country and one heart command center in Afghanistan. we acquired a 90% interest in Escorts Heart Institute & Research Centre Limited (“EHIRCL”). operated and managed 10 satellite and heart command centers. for total consideration of Rs. financed through an equity contribution from FHHL (the “IHL acquisition”). 5. Following the IHL acquisition. Some of our multi-specialty hospitals also include super-specialty “centers of excellence” providing quaternary healthcare to patients in key specialty areas such as cardiac care. 2005. we acquired a 100% interest in Oscar Bio-Tech Private Limited (“OBPL”) from a Promoter Group company for total consideration of approximately Rs.

67.000 open heart surgeries.“OBPL acquisition”). with capacity to increase our inpatient beds to approximately 1. would have been approximately 70%.890. Rs. 2.82 million. 5.000 angioplasties and 15. OBPL has a perpetual O&M contract for the Fortis Flt. the IHL acquisition and the OBPL acquisition. Restated total income for fiscal 2006 for FHL. EHIRCL and its subsidiaries and IHL was Rs.894. 504.5 million and Rs.580 inpatient beds in use across our network of 12 hospitals. Restated net loss for the same period for FHL.000 angiographies on a pro forma basis taking into account the Escorts hospitals acquisition.73 million. 999. 276. taking into account the Escorts hospitals acquisition and the IHL acquisition. 84. EHIRCL and its subsidiaries and IHL was Rs. Rs. Below is a chart outlining our corporate structure and our hospital ownership interests. 59 .67 million and Rs.71 million.29 million. respectively.56 million and Rs. our pro forma average occupancy rate for our owned hospitals and EHCR. respectively. we performed over 5. Vasant Kunj and owns property on which a hospital is to be constructed in northwest Delhi. FHL made additional equity contributions of Rs. During fiscal 2006. Following the OBPL acquisition. 329. In fiscal 2006. Rajan Dhall Hospital. Lt. 90 million to OBPL. We currently have approximately 1.

Amritsar (“EHSSI”) 100% owned Escorts Heart & Super Speciality Hospital Limited (“EHSSHL”) Future Project • Jaipur Hospital 100% owned Escorts Heart Centre Limited (“EHCL”) No Operations 60 . Amritsar O&M Contracts • Fortis La Femme. Mohali (includes the Fortis Ciy Centre clinic in Chandigarh) • Fortis Hospital. Gurgaon 99. New Delhi • Jeewan Mala Hospital. New Delhi 90% owned Escorts Heart Institute & Research Centre Limited (“EHIRCL”) Owned Hospitals • Escorts Heart Institute & Research Centre. New Delhi (5% equity ownership) • Fortis Jessa Ram Hospital. Srinagar Other Facilities • 1 Satellite Center Future Project • Fortis Hospital. Faridabad (“EHRC”) 82.9% owned International Hospital Limited (“IHL”) Owned Hospital • Fortis Hospital. New Delhi • Khyber Medical Institute.61% owned Escorts Heart & Super Speciality Institute Limited (“EHSSIL”) Owned Hospital • Escorts Heart & Super Specialty Institute. Raipur (“EHCR”) Other Facilities • 15 Satellite and Heart Command Centers 100% owned Escort Hospital & Research Centre Limited (“EHRCL”) Owned Hospital • Escorts Hospital and Research Centre. New Delhi (“EHIRC”) Collaboration with the Government of Chattisgarh • Escorts Heart Centre. Shalimar Bagh. Vasant Kunj. Noida 100% owned Oscar Bio-Tech Private Limited (“OBPL”) O&M Contract • Fortis Flt. Lt.Fortis Healthcare Limited (“FHL”) Owned Hospitals • Fortis Hospital. Rajan Dhall Hospital. New Delhi Future Project • Fortis Hospital.

patient-centric hospital facilities. helps relieve patient anxiety and provide a more comfortable experience for patients. This model also allows us to efficiently deploy resources across our network and. In addition. to a network of 12 hospitals and 16 satellite and heart command centers. together with the design of our facilities. Our information technology or “IT” infrastructure has been recognized as among the best in the healthcare delivery industry. Fortis Hospital. As of March 31. advanced procedures and quaternary care at our superspecialty “centers of excellence”. such as attractive architectural and design features. our doctors are dedicated to clinical research and have published numerous studies on topics including cardiology. For example. We adhere to international clinical protocols in patient handling. we had a team of 621 doctors at our owned hospitals and EHCR. Modern. on a global basis. including the Da Vinci Robotic System available at EHIRC. Our hospitals have been designed to ensure that we are able to offer quality care to our patients. which. we have grown from one hospital. Cost-effective business model. including maternity services and open heart surgeries and transplants. we have seven hospitals in the National Capital Region (the “NCR”). For example. EHIRC and EHRC have been designated as ISO 9001:2000-compliant. such as minimally invasive cardiac and orthopedic surgeries. Proven ability to develop and integrate facilities. In addition. also enhance the patient experience. The layouts at our facilities minimize inpatient movement. multi-specialty facilities. the internal operational protocols at Fortis Hospital. diabetes. with outpatient facilities located near diagnostic facilities within the hospital. We believe that having many hospitals within the same region helps potential patients gain familiarity with our brand and our network.Our Competitive Strengths We believe the following competitive strengths distinguish us from our peers and provide us with significant opportunities to grow our business: Skilled doctors dedicated to quality patient care. Noida.359 nurses and 526 other medical personnel. in some cases. We also emphasize preemptive and high quality maintenance of our facilities. while also delivering sophisticated. Mohali was awarded the “Best Design of the Year” award by the American Institute of Architects in 1999. operating theaters. allowing us to serve all of a patient’s medical needs. infectious diseases. also serves to increase the quality of care throughout our network. including hospitals outside our network. Our hospital staff is being trained to care for patients with techniques utilized in the hospitality industry. our hospitals are fitted with modern medical technology and equipment. In the regions in which we operate. which is used to conduct minimally invasive cardiac surgeries. Since 2001. both in India and. Other characteristics of many of our facilities. Having multiple hospitals in the same area also provides us with depth of coverage. We were named “Best IT User” for “Infrastructure in Healthcare” at the 2005 NASSCOM India IT User Awards and also received an award for “Best IT Implementation of the Year 2005” for hospital implementation systems from PC Quest. This helps to expand our reach beyond the core catchment areas of our local. Some of our doctors also have a history of pioneering innovative techniques for patient treatment. We 61 . as our super-specialty expert clinicians also provide expertise and support at our multi-specialty hospitals. intensive care unit management and emergency care set by leading international hospitals and accreditation bodies. Mohali. Fortis Hospital. we focus on obtaining current technologies for providing healthcare services. we generally have a broad presence. 2006. complemented by 2. For example. By focusing on super-specialty “centers of excellence” at our “hub” hospitals. cardiac surgery. The “hub and spoke” model for our hospital network allows us to serve the comprehensive medical needs of patients in their local communities at our multi-specialty facilities. nephrology and neuro-surgery. Depth of coverage. In addition. oncology. the use of special lighting and color and the reduction of “hospital odors”. we can serve patients referred from doctors working at a number of nursing homes and multi-specialty hospitals in a particular region.

Fortis La Femme. Several members of our senior management team also have experience working with our Promoter Group companies. Below are the key strategies we are employing to achieve these goals: Continue to grow with a flexible expansion program. such as cardiac care.have a history of launching greenfield hospital projects quickly and efficiently. 62 . northwest Delhi and Gurgaon. Fortis Flt. We intend to utilize our existing experience in building. Our senior managers have an average of 20 years of experience in management and an average of six to seven years of experience in management in the healthcare industry in particular. We believe the experience we have gained from building and operating hospitals over the past five years has enabled us to improve the rate at which our new hospitals gain acceptance in their local communities and achieve profitable occupancy rates. approximately 34% and 23% of the inpatients and outpatients. gastroenterology and mother and child care. Mohali came from outside the hospital’s core region of Punjab. Our management team subsequently opened Fortis Hospital. We believe our reputation and affiliation with RLL help us attract not only patients. We believe the “Escorts” and “Fortis” healthcare brands are widely recognized by both healthcare professionals and patients in specialty areas. such as our acquisition of the Escorts hospitals in September 2005. Noida. We believe this level of name recognition on a national scale will facilitate the acceptance by both patients and doctors of hospitals in other regions across India that we intend to add to our network. We have an acquisitions team. at Fortis Hospital. Professionally managed administration. In general. Mohali within 18 months of breaking ground. Furthermore. For example. respectively. Our Strategy We continuously strive to improve the quality of healthcare services provided by our hospitals. operating and acquiring hospitals to continue our high rate of growth. who in turn draw additional patients to our facilities. Jeewan Mala Hospital. while at the same time providing quality care to our patients. neurosciences. as well as doctors with both clinical and administrative experience. as well as acquiring existing hospitals. work culture and specialties at a facility (for existing facilities). service and other sectors. Additionally. we have been able to generate operating profit at our greenfield hospitals within three to five years of their launch. We believe our combination of a professionally managed administration with a commitment to patient care and high ethical standards enables us to operate our hospitals more efficiently and leads to greater innovation in the management philosophy across our hospitals. Brand equity. orthopedics. such as RLL and SRL-Ranbaxy Limited. as well as entering into new satellite and heart command center arrangements. Rajan Dhall Hospital. We also consult with third party experts. the quality of the infrastructure. in some cases. an Indian clinical reference laboratory company. We employ a flexible approach to our expansion by building new hospitals. which is dedicated to continuously evaluating potential greenfield. Our senior management team is composed of experienced managers from the manufacturing. then owned by members of the Promoter Group. In fiscal 2006. we seek to continue our strategy of entering into O&M contracts with the owners of both existing and new hospitals. such as our planned hospitals in Jaipur. within 16 months of breaking ground. even internationally. the skill and reputation of the doctors and other medical and nonmedical staff at existing facilities and the attractiveness to leading doctors of the location of new sites. we believe our name recognition extends beyond the NCR and the other areas in which we currently operate to all over India and. such as Fortis Jessa Ram Hospital. such as McKinsey & Company. oncology. but also well-known doctors and other healthcare professionals to our facilities. while at the same time improving our financial results. Chandigarh & Panchkula and approximately 50% and 44% of the inpatients and outpatients. location (with a focus on properties located in major cities). regarding our expansion strategy. at EHIRC came from outside the hospital’s core region of the NCR. respectively. renal care. acquisition and O&M opportunities in both our existing and new regions. we opened Fortis Hospital. Lt. Our evaluation criteria for new opportunities include the cost. Vasant Kunj and Khyber Medical Institute. population base.

particularly tertiary and quaternary healthcare services. 64% and Rs. corporate entities and the local. the average occupancy rate and average income per bed in use at Fortis Hospital. 2006. The skill level of a hospital’s doctors is key to its success. Focus on high-growth segments of the healthcare market.80 million and 81% and Rs. oncology. as we expand into a new region. according to CII-McKinsey. we employ a “staff” model at our hospitals under which most of our doctors. The Indian healthcare market is highly fragmented throughout the country. we intend to roll out in that region quickly to hire doctors and also establish our network in the community before our competitors do. Mohali. sophistication and awareness about healthcare services of patients throughout India will lead to higher demand for our healthcare services. For fiscal 2006.11 million.000 million for inpatient acute cardiac care. has created a new and expanding group of patients. 49. Through our super-specialty “centers of excellence” with well-known doctors in their fields and our particular focus on highgrowth areas such as cardiac care and orthopedics. Improve occupancy rates and increase average income per bed in use. 7. neurosciences. the autonomy of heading a department. 18. During fiscal 2006. we performed over 5. the IHL acquisition and the OBPL acquisition. these procedures command relatively high prices and these specialties are among the most profitable for a hospital. We are currently in various stages of negotiations with a number of other parties to assume O&M contracts and acquire greenfield sites for hospitals outside our core regions. according to a joint report of Ernst & Young and the India Brand Equity Foundation. The growth in the Indian economy. the reputation of the other doctors at our facilities. 31. orthopedics.50 million. 84% and Rs.000 open heart surgeries. and. We believe the growing affluence. on a pro forma basis taking into account the Escorts hospitals acquisition and the IHL acquisition. As at March. including cardiac care. the number of cardiac disease-related treatments in India is expected to grow from 1. We believe that hiring surgeons and other physicians who have established reputations for clinical excellence in their communities is key to the successful implementation of our strategy to acquire. in the case of senior doctors. with many small “nursing home” or hospice facilities run by one or two doctors and some larger facilities run by trusts. We seek to replicate the model we have applied in north India to establish a network of super-specialty “centers of excellence” and multi-specialty hospitals to deliver quality healthcare to patients across the country and leverage our extensive knowledge of the healthcare sector and brand recognition to attract both doctors and patients to our future facilities.5 million in 2004 to 1. including all of the doctors practicing within core specialty areas at our owned hospitals and EHCR are compensated on a salary plus incentives or retainership basis. Fortis Hospital.000 million.02 million. including Rs. We believe that the guaranteed income. In particular. 3. 2. Noida and EHRC were 78% and Rs. 4. will continue to help us attract and retain skilled doctors at our hospitals. and practice exclusively at hospitals within the FHL network. For fiscal 2006. Due to their complex nature. an increase in awareness about health and healthcare and an increase in lifestyle-related diseases such as heart disease.000 angiographies on a pro forma basis. together with an increase in purchasing power. the predictable working hours and. our community outreach initiatives and the research opportunities available at our hospitals. skilled doctors. We believe that we have been successful in attracting doctors to our hospitals and retaining them due to the quality and comprehensive capabilities of our facilities.000 angioplasties and 15. state and central governments. This group is increasingly demanding higher levels of quality medical services. taking into account the Escorts hospitals acquisition. develop and operate hospitals. 5. In addition. gastroenterology and mother and child care. renal care.9 million in 2008. including in the state of Maharashtra in west India. Attract and retain prominent. EHIRC. we believe we are well-positioned to serve this increasing demand for sophisticated medical procedures. 72% of the doctors at our owned hospitals had advanced medical degrees. our extensive continuing education program. societies. which characterize the “staff model”. For example. our retention rate for consultants and other senior doctors at our owned hospitals would have been approximately 95%. We seek to improve occupancy rates by expanding the referral network for our hospitals and increasing community outreach programs to gain 63 .Expand into new regions. respectively. the total cardiac care market in 2000-2001 was Rs.

Maximize efficiencies across our hospitals through greater integration and better supply chain management. In addition. as well as install the best practices from our existing hospitals across the Escorts hospitals. For example. Uttar Pradesh (NCR) 64 . Rajan Dhall Hospital. Pursue strategic relationships with leading healthcare partners. Vasant Kunj through the sharing of doctors. medical equipment. Our scientific association through Fortis Hospital. Mohali with organizations such as the United States-based Partners Healthcare Systems Inc. Lt.. USA. reducing the average length of stay of our inpatients and improving utilization rates. Mohali Mohali.market share in the regions in which we operate. introduce new and innovative procedures for our patients and help us attract overseas patients to our hospitals. the United States and Europe and approximately 10% have had or maintain faculty positions at medical teaching institutions in India and abroad. Noida Noida. Punjab (includes the Fortis City Centre clinic in Chandigarh) New Delhi Owned by FHL June 2001 EHIRC Owned by FHL through its 90%-owned subsidiary – EHIRCL Owned by FHL through its 99. We are also integrating the operations of Fortis Hospital. we procure equipment and medical consumables on a centralized basis for many of our owned hospitals and EHCR. In addition. We also seek to increase our average income per bed in use by focusing on high-end healthcare services. We continue to strive to maximize efficiencies across our hospitals and are in the process of integrating the Escorts hospitals and our existing network of hospitals. laboratories and the hosting of joint medical symposia in order to generate operational synergies at both facilities. see “—Our Hospitals” below under this section titled “Our Business” beginning on page [●] of this Draft Red Herring Prospectus: Hospital Location Ownership/ Management Structure Date of Commencement of Operations/ Acquisition/ Affiliation Owned Hospitals Fortis Hospital. Our Hospitals and Other Facilities The table below lists each of our 12 hospitals. the members of which include the Massachusetts General Hospital and the Brigham & Women’s Hospital in Boston. Noida and Fortis Flt. our increasing size will enable us to benefit from economies of scale.9%-owned subsidiary – IHL September 2005 (hospital commenced operations in 1988) March 2006 (hospital commenced operations in August 2004) Fortis Hospital. We believe that such associations enable us to improve the quality of our patient care. The integration will enable us to adopt the best practices from the Escorts hospitals across our existing network. provides us with a collaborative partner for academic exchange. hosting joint conferences and conducting joint clinical research. approximately 72% of the doctors at our hospitals have received advanced training at leading hospitals in India. For additional detail on our hospitals. We believe these associations also provide a source of innovation and advanced clinical learning for our doctors and other personnel at our hospitals.

61%-owned subsidiary (EHSSIL) of EHIRCL. Rajan Dhall Charitable Trust. Vasant Kunj New Delhi Perpetual O&M contract between Flt.Hospital Location Ownership/ Management Structure EHRC Faridabad (NCR) Owned by FHL through a 100% subsidiary (EHRCL) of EHIRCL. Lt. Rajan Dhall Hospital. Punjab Fortis Hospital. expiring 2007. pursuant to which OBPL replaced Vaitalik as the O&M provider and assumed all of its rights and obligations under the contract. OBPL. Punjab Collaboration with the Government of Chattisgarh EHCR Raipur. Chattisgarh Operated and managed by FHL through its 90%-owned subsidiary – EHIRCL pursuant to a five-year O&M contract. Vaitalik and FHL’s 100%-owned subsidiary. which will automatically renew for an additional five-year period by mutual consent or either party can terminate it after a six-month notice period. the hospital building and all hospital equipment are owned by the Government of Chattisgarh September 2005 (hospital commenced operations in November 2002) Operation & Management (“O&M”) Contracts Fortis Flt. all operating expenses and any profits and losses from the operation of the hospital are for the account of EHIRCL. which is a 90%-owned subsidiary of FHL Owned by FHL through an 82. Lt. which is a 90%-owned subsidiary of FHL Owned by FHL Date of Commencement of Operations/ Acquisition/ Affiliation September 2005 (hospital commenced operations in August 1982) September 2005 (hospital commenced operations in January 2003) August 2003 EHSSI Amritsar. either party can terminate the 65 Agreement dated May 2005 (hospital commenced operations in May 2006) . Amritsar Amritsar.

Hospital Location Ownership/ Management Structure Date of Commencement of Operations/ Acquisition/ Affiliation agreement upon breach of any obligation Fortis Jessa Ram Hospital New Delhi 20-year O&M contract among FHL.B. which will automatically renew for an additional 20-year period unless FHL terminates the contract with three months’ notice 10-year O&M contract between FHL and Jeevan Mala Hospital Private Limited. Bodhraj Kidney Centre) Fortis La Femme New Delhi January 2006 (hospital commenced operations in June 2004) . expiring 2016. expiring 2015. which will automatically renew for an additional five-year period unless either party elects not to renew the contract or terminates it after a sixmonth notice period during which period both parties must attempt to avert the termination or terminates it in the event of a material breach. Seth Jessa Ram and Bros. which will 66 Agreement dated October 2003 (hospital commenced operations in 1952) Jeewan Mala Hospital New Delhi Agreement dated October 2005 (hospital commenced operations in 1947 as Dr. expiring 2023. FHL nominates one director on the board of the corporate owner of the hospital 10-year O&M contract between FHL and SMPL. the R. Charitable Hospital Trust and certain trustees. FHL nominates one director on the board of the corporate owner of the hospital 5% owned by FHL through its 5% equity interest in Sunrise Medicare Private Limited (“SMPL”) with contractual rights and obligations to acquire a greater equity interest under certain circumstances.

FHL nominates one trustee to the board of trustees of the hospital owner April 2006 In addition to our network of 12 hospitals. Our obligations under the contracts with the owners of the hospitals in which these satellite and heart command centers are located typically consist of providing various levels of cardiac care services. Jammu & Kashmir 10-year O&M contract between FHL and the Khalil Public Welfare Trust. providing staff and. including performing surgeries and procedures. Rajasthan Kota. procuring and maintaining medical equipment. which will automatically renew for an additional five-year period unless either party elects not to renew the contract or terminates it after a sixmonth notice period during which period both parties must attempt to avert the termination or terminates it in the event of a material breach. Satellite/Heart Command Center Kalyani Hospital* Goyal Hospital & Research Centre** Sudha Hospital** Location Gurgaon. Rajasthan Expiration October 2007 January 2009 Expired August 2006. we also have a network of 16 satellite and heart command centers. expiring 2016.Hospital Location Ownership/ Management Structure Date of Commencement of Operations/ Acquisition/ Affiliation automatically renew for an additional five-year period unless either party elects not to renew the contract or terminates it after a 45-day notice period during which period both parties must attempt to avert the termination or terminates it in the event of a material breach Khyber Medical Institute Srinagar. Haryana Jodhpur. managing catheterization laboratories and operating rooms. in some cases. renewal in process 67 .

Satellite/Heart Command Center Orchid Hospital & Heart Centre** Shanti Mukund Hospital* Sunder Lal Jain Hospital** Indian Spinal Injuries Centre (“ISIC”)* Kamayani Hospital* Location New Delhi New Delhi New Delhi New Delhi Agra. 68 . advice and technical know-how. the premises. Punjab Udaipur. services yet to commence August 2008. services yet to commence Delhi Escorts-AMRI Diagnostic Heart Kabul. Maharashtra Patna. ** Under these agreements. we operate and run the facility and provide other services as well. including cardiovascular surgeries) Maharaja Agrasain Hospital** Kalra Hospital** Arneja Heart Institute** Heart Hospital** Sadbhavna Medical & Heart Institute** American International Hospital** Saroj Hospital & Heart Institute** New Delhi New Delhi Nagpur. Uttar Pradesh Expiration May 2007 April 2008 February 2007 July 2009 December 2011 (agreement under which EHIRCL established the heart command center and provides doctors and other personnel for non-invasive cardiac care services). to providing management. ranging from providing the services of our doctors and other personnel. to overseeing the clinical management of the center. insurance and other infrastructure are provided by the hospital) December 2008 (agreement under which EHIRCL provides services of doctors from EHIRC for invasive cardiac care services. Rajasthan June 2007 March 2007 December 2007 June 2008 Perpetuity. we provide limited O&M support. unless terminated by either party July 2008. Bihar Patiala. Afghanistan November 2010 Centre** _____________ * Under these agreements.

Operating expenses are also paid by the hospital owners and we receive a percentage of total income and/or operating profits. we do not own the hospital (or. anesthesiologists. we may elect to make such loans directly to the hospital owner. including Dr. For example. For our other hospitals. the three hospitals operated under the Fortis name at Mohali. Vasant Kunj. Other than our initial Rs. and all operating expenses and any profits and losses from the operation of the hospital are for the account of EHIRCL. Naresh Trehan. nurses and other medical and non-medical staff. the percentages generally range from 8% to 10%. The terms of our O&M contracts are typically for a period of 10 years and often include renewal clauses. In addition. we are generally not responsible for capital expenditures at our O&M contract hospitals. our Fortis La Femme hospital is our first foray into a “boutique” style hospital focusing on women’s health and maternity care. which is typically an identified percentage of gross income and/or operating profits of the hospital. we are required to arrange funding for the hospital. Complementing our 12 hospitals are 15 satellite and heart command centers located within other hospitals throughout the country and an additional heart command center in Afghanistan. Amritsar and Noida are all effectively whollyowned by us. including equipment. Rajan Dhall Hospital. we are responsible for the expenses of these hospitals. the initial period is 20 years. Of these. and operate and manage EHCR. As the owner and operator of these hospitals. Lt. Rajan Dhall Hospital. Faridabad and Amritsar are majority-owned by us. Lt. The satellite and heart command centers are staffed with cardiologists. The Escorts hospitals in New Delhi. in collaboration with the Government of Chattisgarh. and any income received typically represents profit. in some cases. liability insurance. Jeewan Mala Hospital and Khyber Medical Institute. Lt. doctors on the staff of 69 . the Government of Chattisgarh owns the building in which the hospital operates and owns and funds the purchase of all hospital equipment. However. as well as diagnostic services such as angiographies to 8 to 10-bed non-invasive centers providing preventive and rehabilitative services. our Escorts hospital in Raipur. own only a small equity interest in the hospital’s corporate owner) but instead operate and manage the hospital for a fee. in the case of Fortis La Femme. including in a majority of cases upon prior written notice or in the event of a material breach. If we are unable to arrange funding from third parties. In the case of EHCR. These facilities range from 25 to 30-bed comprehensive surgical facilities with operating theaters and catheterization laboratories to 15 to 30-bed invasive centers with catheterization laboratories. including Fortis La Femme. and our network of 12 hospitals includes both hospitals owned by us and hospitals owned by third parties but operated and managed by us pursuant to O&M contracts. Fortis Flt. The O&M contracts may be terminated by the owners under certain circumstances. maintenance supplies and capital expenditures. Lt. staff. Vasant Kunj. with the remaining interests held by certain other shareholders. one of our chief cardiac surgeons. In cases where our fees are linked solely to gross income. providing consultation on prevention and rehabilitation. our share is substantially higher. We enter into an O&M contract rather than acquiring a hospital in the case of an attractive hospital opportunity where the owner wishes to retain control. purchasing medical equipment which we lease to the hospital. Rajan Dhall Hospital. The funds we arrange are for the account of the society that owns the hospital. Vasant Kunj. Under the terms of our O&M contract for Fortis Flt.Our Operations We maintain a flexible approach to our acquisition of hospitals. where the hospital may be incorporated as a non-profit institution or in new areas where we are less familiar with the region or type of hospital and are seeking to make an initial low-risk entry into the market and widen the geographic scope of our operations. We currently own or have a majority interest in six hospitals. Fortis Jessa Ram Hospital. 20 million payment for building improvements and pre-operative expenses at Fortis Flt. in cases where our fees are linked to the profitability of the hospital. Rajan Dhall Hospital. cardiac surgeons. For Fortis Flt. the O&M contract period is perpetual and for Fortis Jessa Ram Hospital. Vasant Kunj and.

advanced procedures and quaternary care at our super-specialty “centers of excellence”. Four of the heart command centers are run by our 90%-owned subsidiary.069 112 2. we offer comprehensive medical services to our patients in their local communities. as the case may be. which we complement with sophisticated. a fee per procedure.026 426 623 223 155 9. EHIRC and Fortis La Femme during fiscal 2006: Number of Procedures Procedure Fortis Fortis Hospital. Hospital. for a fee that is typically tied to a percentage of the gross income generated at the center. typically in return for reimbursement of the compensation and benefits paid to these doctors and personnel by EHIRCL or FHL. a variety of invasive and non-invasive procedures and post-operative care. who are not permanently stationed at a center are typically paid by EHIRCL or FHL. or as a set fee per surgery or procedure that generally increases according to the category of room chosen by the patient. EHIRCL. The owners of hospitals where our satellite and heart command centers are located are responsible for the expenses of the centers. Fortis Hospital.984 1. including doctors’ salaries. Mohali) are periodically stationed at these centers and perform examinations. The table below lists the most common procedures performed at Fortis Hospital. in the case of the satellite centers.066 2. Mohali. EHIRCL (or. Mohali Noida Fortis EHIRC La Femme CARDIAC CARE Cardio Thoracic Vascular Surgeries (CTVS) Open Heart (CABGs) Other OT Procedures Cath Lab Procedures Coronary Angiographies (CAGs) Coronary Angioplasties (PTCAs) Other Cath Procedures ORTHOPEDICS Knee Replacements (Unilateral/Bilateral) Hip Replacements Arthroscopy/Trauma & General NEURO-SCIENCES Supra-Major Surgeries Major Surgeries Minor Surgeries 70 808 287 96 18 4. FHL) does not run the facility but provides doctors and other personnel staffing. except that the salaries and retainers for the doctors of EHIRCL or FHL. or. as the case may be.654 195 45 229 156 543 104 573 - 255 181 149 . referring more complex procedures to one of our super-specialty hospitals. in some cases. in the case of our satellite center. with minimum fees stipulated in some contracts. as a percentage of the cost of the surgery or procedure or the fee charged to the patient therefor. as the case may be. and fees computed as a percentage of the revenue generated by the center.653 3.our EHIRC hospital (or. Procedures At our multi-specialty facilities. At the remaining satellite and heart command centers. or a combination of these three methods. Noida. doctors on the staff of Fortis Hospital.

30% of FHL’s total operating income for fiscal 2006. Mohali includes three sub-facilities on one campus: (i) a superspecialty cardiac center equipped to provide advanced cardiac treatments for all forms of heart disease. Mohali. 1. It currently has five operating theaters and 255 beds. including attendants and patients’ relatives. Noida launched July 2005. Mohali.60 million to build. neuro-sciences.GASTROENTEROLOGY Minor Major MOTHER AND CHILD Gynecology Major Minor Obstetrics Normal Caesarian Neonatology Level 1 Level 2 & 3 Note: Cardiac program at Fortis Hospital. Fortis Hospital. orthopedics. other than our “boutique” Fortis La Femme hospital and our super-specialty Escorts cardiac hospitals. gastroenterology. Fortis City Centre. Vasant Kunj are also “centers of excellence” in various advanced specialties such as cardiac care. ENT care and dermatology. mother and child care. oncology. Mohali commenced operations in 2001 and cost approximately Rs. Fortis Hospital. EHIRC. contributed 96. 2005 and 2004: 71 . together with FHL’s satellite center. (ii) a general multi-specialty hospital and (iii) the Fortis Inn rehabilitation center designed to provide “step-down” care to patients based outside the Mohali area to help them fully recover from surgery. EHIRC and EHCR. Fortis Hospital. The following table sets forth certain key operating details of Fortis Hospital. Lt. Mohali for the fiscal years ended March 31. Fortis Hospital. The following paragraphs describe our hospitals and certain key statistics for each of our hospital facilities: Fortis Hospital. Fortis Hospital. offers a range of specialty hospital services. as well as accommodations for visitors. Rajan Dhall Hospital. pulmonology. orthopedics and neurosciences. secondary care hospitals in the surrounding area. Our Hospitals 768 146 82 203 38 156 361 139 245 Each of our hospitals. Mohali is our first hospital and is the cornerstone of our hospital network. Fortis Hospital. such as cardiac care. Amritsar and a number of smaller. Mohali also operates a satellite outpatient clinic. renal care. at a separate location in Chandigarh. Noida and Fortis Flt. ophthalmology. our 16 satellite and heart command centers concentrate on various levels of cardiac care. and has capacity for up to 300 beds. 2006.281. It includes a comprehensive cardiac program in northwest India and serves as a “hub” for Fortis Hospital. cosmetic surgery. Mohali: Fortis Hospital. In addition.

636 31.47% of EHIRCL’s consolidated total operating income for fiscal 2006 without eliminating the intercompany transactions in the stand-alone financial statements of EHIRCL. Excludes beds in emergency rooms. millions) **** Pharmacy Income 16. 1994. is the flagship facility of the Escorts group of hospitals. EHIRC: The EHIRC facility. 2005.7 3.03 5.47 (Rs.699 .804 1.18 (Rs. The facility is equipped with advanced cardiac care facilities and laboratories capable of performing a wide range of investigative tests in the fields of nuclear medicine. EHIRC offers one of the highest standards of cardiac care to patients and has been designated as ISO 9001:2000-compliant. 2004 110 7.955 Fiscal year ended March 31. It specializes in surgery to high-risk patients and has introduced innovative techniques for minimally invasive and robotic surgery. The facility is currently equipped with nine operating theaters and 332 beds.37 Use (Rs. Led by noted cardiac surgeon.15 11. located in south Delhi. Dr.507 4. 2005 137 8.04 42. Naresh Trehan. millions) Average Income per Bed in 4.893 82.Other ****** 1. *****Represents the average number of inpatients and outpatient registrations each day. Total number of inpatient days represents the sum of days spent in the hospital by each inpatient during the period. ***Represents the total number of inpatient days divided by the total number of bed days. hematology. millions) Average Daily 257 205 106 Census***** Number of Procedures: . radiology.21 4.Gastroenterology 914 596 412 . **Includes multiple visits by the same patient are counted separately. Even though EHIRC’s prices for various cardiac procedures are at a premium to prices for similar procedures at other hospitals in the region.1 3. a figure which we believe demonstrates its strong brand equity and superior patient care. ****** Includes general multi-specialty services. and we acquired a 90% interest in the hospital through the Escorts hospitals acquisition on September 28.Cardiac Care 5.75 35. beds used for dialysis treatments and other outpatient treatments. Fiscal year ended March 31. if billed separately. transfusion medicine and microbiology. The hospital was established in 1988. EHIRC contributed 74.131 72 .4 Inpatient Income 861.19 440.Number of Beds* Inpatient Admissions Outpatient Registrations ** Occupancy Rate*** 78% 81% 63% Average Length of Stay 3. 2006 209 10.802 Fiscal year ended March 31.531 4.022 66. ****Inpatient Income and Outpatient Income are net of discounts and subsidies.Neuro-sciences 156 140 109 .04 (Rs. annual occupancy levels at the hospital have been in excess of 80% since the fiscal year ended March 31. bio-chemistry.Orthopedics 469 370 280 .94 523.50 4. millions)**** Outpatient Income 63. Total number of bed days represents the sum of the number of days each bed was installed at the hospital during the period.116 987 * Represents inpatient beds.

02 208 18.965 Fiscal year ended March 31.24 3. millions) Average Income Per Bed 6.203 64% 3.554 * Hospital acquired by FHL in September 2005. Noida: Fortis Hospital. and has been designated ISO 9001:2000-compliant.121.299 39% 3.81 0.397 44. 2006. 2005* ** 88 2.56 Fiscal year ended March 31.Neuro-sciences .98 129.80 160 1.979.11 96. Noida commenced operations in August 2004 and we acquired it on March 20.24 6.The following table sets forth certain key operating details of EHIRC for the fiscal years ended March 31.8 2.220 585 1. Noida is a super-specialty hospital with “centers of excellence” in orthopedics.Orthopedics .Cardiac Care 19.828 52.94 56.90 in Use Average Daily Census 189 Number of Procedures: . millions) Average Income per Bed in Use (Rs.1 119. ** Includes income from satellite and heart command center Fortis Hospital. Fortis Hospital. The hospital also provides a broad range of multi-specialty services and serves as a “hub” for smaller hospitals located in the NCR. With additional capital expenditures we could increase this number to 350 beds.206 85% 5.356 58. 2004* 318 18. 2006** 128 7. It currently has six operating theaters and 175 beds.Other **** * Hospital commenced operations in August 2004. 2006 through the IHL acquisition. millions)** Outpatient Income 112. millions) Outpatient Income (Rs.8 425.646 Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Average Length of Stay Inpatient Income (Rs.05 7.046. 73 .9 1.666 86% 5.78 (Rs.012 84% 5.03 4.011 Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Average Length of Stay Inpatient Income (Rs.574 Fiscal year ended March 31.8 2.001 1. millions) Average Daily Census Number of Procedures: .75 1.53 172 20. 2005* 310 17.16 13. 2006* 324 16.Cardiac Care*** .280 51. The following table sets forth certain key operating details of Fortis Noida for the fiscal years ended March 31. millions) Pharmacy Income (Rs. neuro-sciences and cardiac care and a focus on oncology.452 16. 2005 and 2004: Fiscal year ended March 31. 2006 and 2005: Fiscal year ended March 31. with capacity for up to 200 beds.52 51 554 258 1.

FHL acquired a 90% interest in EHRC through the Escorts hospitals acquisition on September 28.8 351. 2006. trauma and sleep studies. **** Includes general multi-specialty services. Noida. located in Amritsar. The hospital commenced operations in 2003.82 39. but as this is a newly-opened hospital. The hospital did not commence operations until May 2006. millions) Outpatient Income 53. super-specialty hospital with “centers of excellence” in cardiac care.253 75% 3. orthopedics. In 1998. pulmono-thoracic surgery. the hospital was transferred out of Escorts Limited to EHRCL and became an independent primary care hospital.** Hospital acquired by FHL in March 2006. In the future. EHRC contributed 13. orthopedics. 2005* 200 13.084 81% 3.67 443 7. EHRC is the first hospital in India to receive ISO 9001:2000 certification. EHSSI: The EHSSI facility. The facility currently has four operating theaters and 120 beds. and FHL acquired a majority interest therein through the Escorts hospitals acquisition on September 28.44 430 6. In the 1990s. The following table sets forth certain key operating details of EHRC for the fiscal years ended March 31.36 (Rs. Fortis Flt.833 72% 3. Lt. if any.98% of EHIRCL’s consolidated total operating income for fiscal 2006. 74 . with a maximum capacity of 250 beds.02 in Use (Rs.557 143. with capacity for up to 200 beds.27 1.911 Fiscal year ended March 31. The hospital was again renovated and expanded in 2003 and currently has five operating theaters and 220 beds. we intend to add the following tertiary care multi-specialties to the hospital: cardiac care. no profits have been generated to date. 2005.8 228. Rajan Dhall Hospital.486 Services * Hospital acquired by FHL in September 2005. with capacity for up to 166 beds. millions) Average Daily Census 492 Number of Procedures: . pulmonology.General Secondary Care 8. *** Cardiac care introduced in July 2005. 2005 and 2004: Fiscal year ended March 31. and diabetic care.30 44. 2006* 200 15. as well as EHIRC. the hospital underwent a series of upgrades to become a secondary care facility.565 164. 2005. 2002. EHSSI contributed 6. It currently has six operating theaters and 120 beds. located in Faridabad. renal care.791 147.8 289. is a multi-specialty hospital with a focus on cardiac care and orthopedics.44 Fiscal year ended March 31. Under the terms of our O&M contract. after the end of fiscal 2006. Vasant Kunj: The Vasant Kunj hospital in New Delhi is a newly-opened. EHRC: EHRC.97 1. we are entitled to a significant share of the hospital’s operating profits. neuro-sciences. commenced operations in 1982 as a primary care facility for the employees of the Escorts Group. It now serves as a “spoke” hospital for Fortis Hospital. millions) Average Income Per Bed 2.717 Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Average Length of Stay Inpatient Income (Rs. although IHL became a board-controlled subsidiary with effect from December 20.32% of EHIRCL’s consolidated total operating income for fiscal 2006 without eliminating the intercompany transactions in the stand-alone financial statements of EHSSIL. 2004* 186 13.

2005* 90 1. invested approximately Rs. Fortis Medical Centre Holdings Limited.66 31 1.16 1.64 14 Fiscal year ended March 31. 2004* 39 574 2.472 3. 2006* 90 2. Mohali and has a telelink connecting it to that hospital.772 21% 3.9 9.935 9.908 35% 5.28 9 Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Average Length of Stay Inpatient Income (Rs.814 .9 29.08 0. a nursery and a 24-hour emergency room. a labor room.94 (Rs. millions) Average Income Per Bed in Use (Rs.1 168. The following table sets forth certain key operating details of Fortis Hospital. Amritsar: Fortis Hospital. Amritsar for the fiscal years ended March 31. an endoscopic suite.General Multi-Specialty 30 Services * Hospital acquired by FHL in September 2005.85 0.88 1. millions) Pharmacy Income (Rs.487 27% 4. 2006. millions) Outpatient Income 13.7 136.775 8. millions) Average Daily Census Number of Procedures: 75 . a board-controlled subsidiary of FHL that was merged with FHL with effect from the beginning of fiscal 2005. Operations at Fortis Hospital. Amritsar commenced in August 2003 on premises that we have leased for an initial term of 14 years from March 2003.523 14% 3.03 Use (Rs. millions) Average Daily Census 33 Number of Procedures: . Fortis Hospital.30 million in the facility prior to its opening.91 Fiscal year ended March 31. It serves as a “spoke” hospital for Fortis Hospital. millions) Average Income per Bed in 2.Cardiac Care 1. 2006 34 1. 2005 39 1.534 - Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Average Length of Stay Inpatient Income (Rs. Fortis Hospital.75 1.94 0. 40.11 9.82 12.185 9.6 23. The facility is currently equipped with two operating theaters.23% of FHL’s total operating income for fiscal 2006.724 6% 3.41 2. 2005 and 2004: Fiscal year ended March 31. 2004.7 121.366 3.46 29 1. Amritsar contributed 3. Amritsar is a multi-specialty facility with 34 beds and has capacity for up to 50 beds.755 14% 3. millions) Outpatient Income (Rs. 2005 and 2006: Fiscal year ended March 31.686 Fiscal year ended March 31. It is also supported by a fully equipped intensive care unit with ventilators.93 14 Fiscal year ended March 31. 2004* 90 1.The following table sets forth certain key operating details of EHSSI for the fiscal years ended March 31.13 0.89 0.

The facility currently has three operating theaters and 100 beds. Noida. The following table sets forth certain key operating details of Fortis Jessa Ram Hospital for the fiscal years ended March 31. It serves as a “spoke” hospital for Fortis Hospital. but no amounts have become payable under the contract to date. The terms of our O&M contract provide that in addition to reimbursement for all expenses incurred by FHL. located in west-central Delhi. 2005 100 3. 2005* 100 5.35% of FHL’s total operating income for fiscal 2006.95 1.40 0. 2004* 100 6. 2006* 100 5. The following table sets forth certain key operating details of Jeewan Mala Hospital for the fiscal years ended March 31. FHL assumed the operations and management of the hospital on October 31. 2006. 2005 and 2004: Fiscal year ended March 31.219 25.59 in Use (Rs. 2004* 100 3.232 33.87 0. 2006 100 3.874 57% 3 40. This major refurbishment may require the temporary closing of the facility. we are also entitled to receive a specified percentage of the hospital’s gross income above a target threshold..885 21. The terms of our O&M contract provide that we are to receive a specified percentage of the hospital’s gross income less the amount of any cash loss at the hospital.093 20.228 Services * Hospital not under FHL management until October 29.37 100 1.60 Fiscal year ended March 31.301 56% 3 30.518 31. 507 267 Fortis Jessa Ram Hospital: Fortis Jessa Ram Hospital.63 0.698 72% Fiscal year ended March 31.298 Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Average Length of Stay Inpatient Income (Rs.General Multi-Specialty 1. Jeewan Mala Hospital contributed 0. 2005 and 2004: Fiscal year ended March 31.480 65% 4 67.337 64% 76 Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Fiscal year ended March 31. 2003. is a general multi-specialty hospital. millions) Average Income per Bed 0. 2006. Jeewan Mala Hospital: The Jeewan Mala Hospital is a multi-specialty hospital located in west-central Delhi and serves as a “spoke” hospital for Fortis Hospital.90 (Rs. millions) Average Daily Census 100 97 Number of Procedures: . but we intend to upgrade the facility in the future at our own expense to increase the number of beds to 150 and add a proposed “center of excellence” in oncology. Noida.General Multi-Specialty 511 Services * Hospital commenced operations in August 2003. We assumed the operations and maintenance of the hospital in October 2003.950 32.20 Fiscal year ended March 31. 2005.150 1. The hospital currently has three operating theaters and 100 beds and provides specialized services in mother and child care and gastroenterology. millions) Outpatient Income 1.392 74% .

the other shareholders have one year from the date of our acquisition of the 51% to sell their shares to us at face value plus 12% interest per annum from September 1. The hospital currently has two operating theaters. we acquired a 5% equity interest in the hospital’s corporate owner.98 73 808 846 Fortis La Femme: Fortis La Femme is a “boutique” style hospital located in south Delhi that focuses on women’s health and maternity care. 3. four delivery rooms and 44 beds.43 18. The hospital caters to affluent patients and includes luxury rooms and suites. and we assumed the operations and management in January 2006.10% of FHL’s total operating income for fiscal 2006. We have recently begun to upgrade the facility to a full service women’s hospital. and a specified percentage of the hospital’s gross income from all other sources. with capacity for up to 50 beds. except that if the corporate owner of the hospital operates the pharmacy in the hospital on its own. 2005. we have a further option to acquire further shares to increase our interest in the corporate owner to 51% at any time from the second anniversary to the fifth anniversary of January 3.Gastroenterology 288 198 . 16. The other shareholders have an option to require us to purchase their entire interest in the corporate owner to us. including compensation paid by us to doctors and other personnel. 15 per share (provided that consideration is only payable in respect of shares outstanding on January 3. We are also entitled to reimbursement of certain expenses. 2006).10 millions) Outpatient Income (Rs. 2006. If we do not acquire a 51% interest. millions) Average Daily Census 84 76 Number of Procedures: .3 3. The hospital was previously managed by the Apollo Hospitals Group.98 0. and a percentage of child and birth-related gross income less the professional fees paid to non-full-time doctors if the target is not met. In addition. and we subsequently paid the remaining balance. the shareholders have 30 days from the expiration of the Option Period to sell their shares to us at Rs. the date of the subscription agreement (the “Option Period”). which is convertible into an additional 21% equity interest in the corporate owner at any time within two years from the date of infusion of the first tranche of the loan.Mother and Child Care 836 776 . 23.80 0.00 millions) Average Income per Bed 0. If we acquire a 51% interest. we are entitled to a lower specified percentage of gross income relating to pharmacy operations.91 million.Average Length of Stay 3. Fortis La Femme contributed 0. with an emphasis on cosmetic surgery and gynecology. which was September 1. We have also extended a loan in the form of convertible debt to SMPL. 77 . 2005. irrespective of whether we acquire a 51% interest in the corporate owner. The terms of our O&M contract provide that we are to receive a percentage of gross income relating to all child and birth-related services if a target threshold of monthly income is met. 81.55 million as convertible debt to the corporate owner out of the agreed amount of Rs. we had advanced Rs.3 Inpatient Income (Rs. It was originally a “birthing” facility (named “The Cradle”).79 in Use (Rs. 2005. 28.67 65. After the second anniversary.Other** 800 896 * Hospital not under FHL management until October 31.3 79.11 14. At June 30. the subscription agreement provides that the loan shall automatically convert into a 21% equity interest in SMPL. Pursuant to the terms of our share subscription agreement with SMPL and others. ** Includes general multi-specialty services. 2006.

Normal Delivery 1.5-3. which automatically extends for a further period of five years unless either party communicates its intention not to renew the contract with three months’ notice or terminates it after a six-month discussion period to discuss and resolve the reasons for the proposed termination. Under the agreement with the Government of Chattisgarh. a heart command center. During fiscal 2010.5 13. EHCR contributed 2. tax. Srinagar did not assume operations until April 2006. endocrinology and rheumatology specialties to the hospital. The hospital has approximately 45 beds. 2006 and 2005: Fiscal year ended March 31. we intend to add 80 new beds in a new building and introduce general medicine. but the Government of Chattisgarh owns the building in which the hospital operates and owns and funds the purchase of all hospital equipment. ** Includes general multi-specialty services. 78 . nephrology. millions) Average Daily Census 7 10 Number of Procedures: .507 35-40% Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate*** Average Length of Stay*** .238 15-20% Fiscal year ended March 31. consumables and disposables.145 2. located in Srinagar. Khyber Medical Institute. In exchange for use of the hospital building and the equipment. Under the agreement. hospital not under FHL management until January 2006.C-Section 2. The facility currently has one operating theatre and 30 beds.78 1.Other** 157 387 * Hospital commenced operations in June 2004.Mother and Child Care 320 758 . EHCR: The EHCR facility in Raipur is a super-specialty cardiac center with a fully-fledged heart station. Jammu & Kashmir.0 Inpatient Income (Rs. Srinagar: Khyber Medical Institute. the free treatment does not include the cost of drugs. all operating expenses and any profits and losses from the operation of the hospital are for the account of EHIRCL. These amounts represent the range of occupancy rates and average lengths of stay across the Hospital's procedures. The terms of our O&M contract provide that we are to receive a specified percentage of the hospital’s gross income plus a specified percentage of the hospital’s profit before interest.9 Outpatient Income (Rs. millions) 15. 2006* 33 1. Hospital did not track average length of stay for fiscal 2005.96 (Rs.The following table sets certain forth key operating details of Fortis La Femme for the fiscal years ended March 31. depreciation and amortization. we have agreed with the Government of Chattisgarh to reserve 15% of the hospital’s beds to provide free treatment to patients who have been designated by the Government of Chattisgarh as falling below the poverty line and to provide treatment to patients who are employees of the Government of Chattisgarh at a 15% discount. 2005* 33 477 2. but we intend to open up an additional 20 beds during fiscal 2007. general surgery. we have been granted the right to operate the hospital for an initial term of five years.0-2.9 Average Income per Bed in Use 0.0 . and one operating theater. The Khyber Medical Institute. and we are currently earning fees under this contract.2 50. is a multi-specialty hospital with a focus on non-invasive cardiac care and gastroenterology. millions) 10. ***Hospital only tracks occupancy rates and average length of stay on a procedure-specific basis. a cardiac catheterization laboratory.42% of EHIRCL’s consolidated total operating income for fiscal 2006.

The following table sets forth certain key operating details of EHCR for the fiscal years ended March 31, 2006, 2005 and 2004: Fiscal year ended March 31, 2006* 45 1,177 6,660 24% 65.06 Fiscal year ended March 31, 2005* 45 992 5,986 17% 50.56 4.49 1.22 19 240 Fiscal year ended March 31, 2004* 45 792 5,667 14% 31.57 3.14 0.77 18 116

Number of Beds Inpatient Admissions Outpatient Registrations Occupancy Rate Inpatient Income (Rs. millions) Outpatient Income 4.89 (Rs. millions) Average Income per Bed in 1.55 Use Average Daily Census 21 Number of Procedures: - Cardiac Care 291 * Hospital acquired by FHL in September 2005.

Note : Average length of stay is not tracked at the facility. Our heart command centers at EHIRCL contributed approximately 2.72% of EHIRCL’s consolidated total operating income for Fiscal 2006. Escorts Heart Centre at Kanpur operationally closed with effect from August 31, 2005. It contributed 0.09% of EHIRCL’s consolidated total operating income for Fiscal 2006. Income from our satellite and heart command center at FHL is included in the operating income of Fortis Hospital, Mohali. Payment for Services Payment for services consists primarily of payment for inpatient and outpatient services. Although the Indian economy is one of the fastest-growing economies in the world measured by growth in gross domestic product, with an increasing number of high and middle-income households, there is still relatively low penetration by the insurance industry in the healthcare sector. McKinsey–CII estimates that in 2001 less than 15% of the Indian population had access to health insurance (including social and community insurance) and less than 1% of spending on healthcare was covered by private insurance. We have entered into service agreements on a hospital-by-hospital basis with a number of employers, including the State Governments of Haryana, Punjab & Himachal Pradesh; government enterprises like Bharat Petroleum Corporation Ltd., Steel Authority of India Ltd., National Thermal Power Corporation Ltd. and National Fertilizers Ltd.; the Army Group Insurance Fund; Northern Railways; and large corporations such as RLL, ICICI Prudential Life Insurance Co. Ltd., Hindustan Lever Ltd., Reliance Industries Ltd., Citibank and HSBC to provide healthcare services to their employees at negotiated or preferential rates, typically at discounts of 5% to 15% to our published rates.1 We also provide healthcare services to veterans of the armed forces under the government-run Ex-Servicemen Contributory Health Scheme and to employees of the Indian central government under the Central Government Health Scheme. We believe that these strategic relationships help increase our occupancy rates and provide an important source of patients. We have also entered into strategic relationships with international insurers such as Aetna, CIGNA, HTH Worldwide and Vanbreda International to provide healthcare coverage to their subscribers who are living, working or traveling in India at discounted rates, which are typically 5% lower than our customary rates. Because the fees for many of the patients who are covered by these arrangements are paid by the

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patient’s employer or insurer, our days’ sales outstanding has increased as the number of arrangements has increased. We also receive hospital management fees from the owners of our O&M contract hospitals and income from rent or access fees paid by third-party vendors that are on-site at our hospitals, such as pharmacies, gift shops, banks and ATMs and cafeterias. In addition, we generate income from the retail sales of pharmacies we operate at our owned, Fortis-branded hospitals. Further, at Fortis Hospital, Mohali, we also maintain the Fortis Inn rehabilitation center to provide “step-down” care to patients, as well as accommodations for visitors, which generates additional income. Supplies and Sourcing In order to ensure that we maintain our high service standards, we source our medical and nonmedical supplies and equipment from major suppliers with international reputations for high quality products. We also insist that our third-party providers of services such as diagnostic laboratory services and imaging services adhere to recognized international protocols. For example, the SRL Ranbaxy diagnostic laboratory located in Mumbai is accredited by the College of American Pathologists and the National Accreditation Board for Testing and Calibration Laboratories. We believe the SRL Ranbaxy laboratories located on-site at our owned, Fortis-branded hospitals follow similar international operating procedures and standards. In addition, as a large hospital network with centralized procurement for medical consumables and equipment for many of our owned hospitals, we believe we are able to negotiate favorable terms with these suppliers and third-party service providers. Accreditation and Certification We have applied for accreditation of EHIRC (and intend to do so in the near future for accreditation of Fortis Hospital, Noida and Fortis Flt. Lt Rajan Dhall Hospital, Vasant Kunj) by the newlyestablished National Accreditation Board for Hospitals and Healthcare Providers, an autonomous body set up in 2005 under the Quality Council of India for setting benchmarks in the healthcare industry in India. In fiscal 2007, we also intend to apply for international accreditation of our Fortis Hospital, Mohali and EHIRC facilities by the Joint Commission International. The Joint Commission International is part of the Joint Commission on Accreditation of Healthcare Organizations, a non-profit corporation that is the largest accreditor of healthcare organizations in the United States. The internal protocols at our Fortis Hospital, Noida, EHIRC and EHRC facilities have also been ISO 9001:2000-certified. Even without formal accreditation, we seek to follow international protocols in all key functions, patient care, and nursing activities at all our hospitals. Future Plans Expansion in new locations is an important element of our growth strategy. We are continuously evaluating existing hospitals for acquisitions and O&M contract opportunities, as well as greenfield sites for new hospitals. When evaluating the viability of a new opportunity we examine the location, including the population base in the area, the available talent pool at that location, the cost and, for existing facilities, the quality of the infrastructure and specialties at the facility and the work culture of the institution. Although to date we have focused on north India, we intend to develop a pan-India presence in the future. In addition to the projects detailed in the section titled “Objects of the Issue” on page [ ] of this Draft Red Herring Prospectus, we have identified a number of other projects to expand our national presence. Many of these projects remain in their early stages and we have not received all the necessary approvals to implement them. These projects may not be undertaken at all or, if undertaken, may be altered or take longer than anticipated to complete or may exceed our cost expectations. In addition, as we are continuously evaluating new opportunities, we may acquire additional sites and hospitals or enter into new O&M contracts at any time. Below is a discussion of three of our proposed projects which are in advanced stages of development and certain other plans which are still in initial stages of development.
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Jaipur We own EHSSHL, which is a 100% subsidiary of EHIRCL, in which we hold a 90% interest. EHSSHL owns our planned hospital in Jaipur, Rajasthan which will be a super-specialty hospital owned by us and operated under the Escorts Hospital brand, with specialization in cardiac care, orthopedics, neuro-sciences, renal care and gastroenterology. The hospital will have capacity for up to 150 beds in the first phase, which is expected to be completed by March 2007. We estimate that the capital expenditures for the first phase of the hospital will be approximately Rs. 1,100 million. The hospital site and plans were part of the Escorts acquisition and the planning/construction of the hospital had already commenced at the time of the Escorts acquisition. Northwest Delhi Our planned hospital in Shalimar Bagh, northwest Delhi will be a super-specialty hospital, with specialization in cardiac care, orthopedics, neuro-sciences, renal care, mother and child care and gastroenterology. The hospital will have 258 beds in the first phase, which is expected to be completed by March 2008. We estimate that the capital expenditures for the first phase of the hospital will be approximately Rs. 2,000 million. We have already entered into a perpetual lease of the land for the hospital from the DDA and have paid a premium of Rs. 130.20 million to the DDA in connection therewith. Gurgaon Our planned super-specialty hospital in Gurgaon in the NCR will focus on trauma, oncology, mother and child care, cardiac care, orthopedics, organ transplants and neuro-sciences. The hospital will have 350 beds in the first phase, which is expected to be completed during the first half of fiscal 2010. We estimate that the capital expenditures for the first phase of the hospital will be approximately Rs. 3,500 million. The plans for the hospital also contemplate expanding its capacity to 800 beds in the future with additional capital expenditure. We have entered into an agreement to acquire approximately 10.81 acres of land for the planned hospital at a cost of Rs. 185.82 million, of which we have already paid Rs. 110.93 million. In addition to our planned hospital in Gurgaon, our Promoters have also announced plans for the building of the Fortis International Institute of Medical & Bio-Sciences, a “Medicity” in Gurgaon with a medical college, dental college, nursing college and other educational programs. The Medicity will be owned by a non-profit affiliate of FHL and will not be owned by us. Other We entered into a memorandum of understanding in July 2006, for the operation and management of an existing hospital in the state of Maharashtra in west India and for the construction of another hospital which would have specialized services adjoining the existing hospital. The memorandum of understanding provides that we will prepare a business plan for upgrading and developing the hospital and enter into definitive agreements, including an exclusive O&M contract and a guarantee for the purpose of financing the project. The memorandum of understanding is non-binding and subject to on-going due diligence. The memorandum of understanding is valid until October 6, 2006, unless extended by the parties. We are presently in discussions with certain real estate developers, inter alia, regarding the joint development of hospitals, medical centers and teaching facilities. We have entered into confidentiality and non-disclosure agreements with such parties. In addition, we are currently in various stages of negotiations with a number of other parties to assume O&M contracts and acquire greenfield sites for hospitals outside our core regions, as well as to undertake a joint project with a state government and manage a hospital in a rural area as part of
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our corporate social responsibility initiative, some of which are larger in scale than any project we have attempted to date. Some or all of these projects may not be undertaken. Strategic Relationships FHL has a scientific association with Partners Healthcare Systems Inc. (“PHS”), one of the leading hospital organizations in the world. The Massachusetts General Hospital and the Brigham & Women’s Hospital, both teaching affiliates of Harvard Medical School, are the founding members of PHS. In connection with this association, Fortis Hospital, Mohali hosts joint conferences and conducts joint clinical research trials with PHS. The association also facilitates faculty interaction. In prior years, FHL had a formal relationship with PHS pursuant to which PHS provided Fortis Hospital, Mohali with clinical protocols and procedures related to cardiac care, quality assurance, training of hospital personnel and criteria for accreditation in accordance with U.S. hospital standards, which we are continuing to implement at all the hospitals within our network. Under this formal relationship, PHS also provided protocols for cardiac surgeons and cardiologists based on U.S. teaching hospital standards. We have arrangements with a number of medical value travel agencies based in India, as well as the United States, the United Kingdom and Canada, among others, and expect to continue to increase the number of these arrangements in the future to facilitate our access to the growing medical value travel market. In addition, as mentioned above, we have entered into arrangements with international insurers such as Aetna, CIGNA, HTH Worldwide and Vanbreda International to provide healthcare coverage to their subscribers who are living, working or traveling in India. We believe that these arrangements provide us with additional access to international patients. Competition Although India faces a significant supply gap in terms of healthcare facilities, the healthcare industry is highly competitive. We compete with other hospitals and healthcare providers for, among other things, patients, doctors, nurses and strategic expansion opportunities. We currently operate primarily in north India. We compete with other for-profit hospitals, such as those forming part of the nationwide Apollo chain of hospitals, as well as regional operators such as Max Healthcare and, particularly in the case of secondary care facilities, independent clinics and small hospitals. We also compete with hospitals that are owned by government agencies or non-profit entities supported by endowments and charitable contributions, such as the All India Institute of Medical Sciences. As we expand our operations beyond north India, the group of hospitals that we count as our competitors will expand to include hospitals throughout India, such as Wockhardt Hospitals in south, west and east India and Manipal Hospitals in south India. Recent press reports have indicated that other entities have also planned to establish “Medicities” with hospital facilities and medical teaching institutions in India in the states of Orissa and West Bengal. The number and quality of doctors on a hospital’s staff are important factors in a hospital’s competitive advantage and help attract patients. We believe that doctors outside a hospital’s network refer patients to a hospital primarily on the basis of the quality of services it renders to patients, the quality of other doctors on the medical staff, the location of the hospital and the quality of the hospital’s facilities, equipment and employees. Other factors in a hospital’s competitive advantage include operational efficiency, the scope and breadth of services, brand recognition and the success rate for procedures. We believe that maintaining and strengthening our pool of highly-skilled doctors and nurses, as well as investing in advanced technology, will help us maintain and improve our competitive position. In addition, we seek to strategically locate our hospitals in areas with large populations that are seeking the super-specialty advanced care we provide.
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Relationships with Certain Affiliated Entities We purchase certain products and services from affiliated companies, such as RLL and SRL Ranbaxy Limited. The services and products we obtain from affiliated companies include diagnostic laboratory services and drugs and consumables for dispensing to patients and for retail sale in our pharmacies. The pharmacies at our Escorts hospital are operated by Medsource, a majority-owned subsidiary of Fortis Healthworld Private Limited (“FHPL”), a Promoter Group company. Other hospitals within our network may also outsource this function to FHPL in the future. We also receive access payments from RLL in respect of the laboratory facilities RLL maintains at certain of our hospitals, as well as bed-usage fees for hospital beds (which are not included in our total bed counts) at certain of our hospitals used by RLL in their clinical research. In addition, we also provide services to our affiliated trusts such as the Fortis School of Nursing through our nurse trainee program. For further details on our affiliated companies and the Promoters’ equity interests therein, see the section titled “Our Promoters and Promoter Group” and “Financial Statements- and the notes to our Consolidated Restated Financial Statements” beginning onpages [●] and [● ], respectively, of this Draft Red Herring Prospectus. Intellectual Property and Information Technology Intellectual Property Our intellectual property consists mainly of our rights to use the “Fortis” name and logo and the “Escorts” trademark. Our affiliate, Ranbaxy Holding Company, owns the rights to the “Fortis” name and logo, but has provided us with an exclusive license to use the name and logo in connection with our healthcare delivery business until April 2015, after which period the license is automatically renewable for a subsequent 10-year period on the same terms and conditions, unless terminated earlier with the consent of both parties. The license fee is Rs. 100,000 per year. At the end of the license period, it is possible that we may no longer be able to use the “Fortis” name in connection with our business. In connection with the Escorts hospitals acquisition, Har Parshad Company Private Limited (“HPCPL”), a company affiliated with the Escorts Limited, the former majority-owner of the Escorts hospitals, granted EHIRCL and its existing subsidiaries a perpetual, royalty-free license to use the “Escorts” trademark as a part of the corporate name of EHIRCL and its subsidiaries, so long as neither EHIRCL nor any of its subsidiaries seeks to register the trademark with the trademark authorities or transfer, assign or sub-license the trademark. Although broad use of the Escorts trademark was contemplated in the acquisition agreement relating to the Escorts hospitals acquisition, the license does not permit EHIRCL and its subsidiaries to use the trademark for any other activities or to sub-license or register the trademark, including in connection with the names of the Escorts hospitals. To date, HPCPL has not objected to our use of the “Escorts” trademark in connection with our hospitals. Information Technology Our IT infrastructure system allows us to maintain electronic patient records and imaging that can be quickly transmitted throughout a hospital, to hospitals within our network and to offsite locations for quick diagnoses and treatment, and also assists us with monitoring and coordinating procurement, stocking, billing, housekeeping, staffing and patient treatments. Our integrated system simplifies scheduling and billing for our patients and doctors, improves our inventory management and results in efficiencies across our operations. Our IT infrastructure systems have won a number of awards, including the “Best IT User” award for “Infrastructure in Healthcare” at the 2005 NASSCOM India IT User Awards and the “Best IT Implementation of the Year 2005” award for hospital implementation systems from PC Quest. In addition, our former chief information officer won the Champion CIO prize for mid-sized enterprises at the 2004 CIOL - Dataquest Enterprise Connect
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Awards. To date, we have invested over Rs. 20.7 million in IT infrastructure, including cable plant within our hospitals, servers and personal computers, and plan to spend a total of Rs. 10.5 million on IT infrastructure during fiscal 2007. Professional Activities Research Our doctors across various departments are engaged in a broad spectrum of research, including therapeutic trials, investigation of disease pathogenesis and discovery-oriented basic science. We conduct research on a number of topics, including cardiology, cardiac surgery, diabetes, infectious diseases, oncology, nephrology and neuro-surgery, and our doctors regularly publish papers in scholarly journals. Current clinical research includes studies on “Multi-vessel Beating Heart (OPCAB) vs. Conventional Coronary Artery Bypass (CCAB) Surgery”, “Percutaneous bronchoscopic guided trachestomy” and “Echocardiographic evaluation of school going children in Northern India”. Community Outreach We are committed to being active in the communities in which we operate and have initiated several outreach programs. For instance, our key specialist doctors hold regular, offsite outpatient clinics in more than 50 rural towns in north India, and many of our surgeons visit former patients located in remote areas to offer follow-up advice as part of our “Friends of Fortis” initiative. We also host free public lectures on healthcare issues and offer free health camps and clinics in outlying areas as part of our effort to extend the benefits of specialist treatment to a broader patient base. Through our telemedicine initiative, the doctors at our Fortis Hospital, Noida facility are able to provide consultations via teleconference to patients in 13 smaller cities throughout north India. At Fortis Hospital, Mohali and Fortis Hospital, Noida, we also maintain a “Fortis Golden Age Club” for senior citizens, which permits them to receive free consultations and discounts on investigations for a nominal annual fee. For fiscal 2006, the program served approximately 850 senior citizens. During fiscal 2006, our community outreach initiatives reached approximately 200,000 people. We believe these initiatives are an important tool in carrying out our responsibilities to provide healthcare in our local communities, serving to provide our doctors with an outlet for reaching out to patients in need and raising the profile of our hospitals and reputation throughout the country. Professional Development We believe that in order to maintain the quality of care we offer to our patients, our doctors and other medical staff must pursue a rigorous program of continuing education. We offer a wide range of health education sessions and seminars on-site at our hospitals to our medical staff, as well as to healthcare professionals outside our network. The sessions are led by expert physicians and other healthcare professionals from our hospitals who have first-hand knowledge of the latest clinical developments and research. These sessions provide an important forum to discuss recent developments to improve patient care and serve as a vehicle to teach doctors new techniques. In addition, they also provide an important opportunity for us to showcase our facilities and for our doctors to grow their referral networks. During fiscal 2006, approximately 12,000 doctors and other healthcare professionals attended educational sessions at our hospitals. During that period, our doctors also attended, and in some cases also presented research papers, at approximately 500 conferences and seminars at leading hospitals around the world. Ethics and Compliance Programs The operational and procedural protocols we have implemented at each of our hospitals were designed taking into account international standards and the particular needs of our local communities. The department heads at each of our hospitals are responsible for ensuring compliance with these protocols across their departments. In addition, we regularly send teams from our “hub” hospitals to
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visit our “spoke” hospitals to monitor their compliance with protocols. For example, at Fortis Hospital, Noida, we have an independent review board composed of practicing senior doctors, pharmacologists, academics and a jurist who review all clinical research studies before they are carried out. We have also implemented rigorous training programs for all new employees and existing employees who are assigned to new jobs, regardless of their prior experience. We will not assign an employee to a new job until such employee has met the requirements of the training program. Insurance We maintain liability insurance for our owned hospitals in amounts we believe are appropriate for our operations. Fortis Hospital, Noida, Fortis Hospital, Mohali and Fortis Hospital, Amritsar maintain professional and general liability coverage for the hospital and staff (including doctors) up to Rs. 50 million in the aggregate. In addition, the Escorts hospitals maintain the following professional and general liability insurance coverage for the hospital and staff (including doctors): Rs. 100 million for EHIRC and EHCR under the same policy, Rs. 6 million for EHRC and Rs. 10 million for EHSSI. EHIRC and EHCR also separately maintain professional liability policies for each of its doctors in amounts generally ranging from Rs. 1 million to Rs. 2 million, with a Rs. 100 million policy for Dr. Naresh Trehan and a Rs. 20 million policy for another senior doctor. In addition, we maintain policies covering risks related to loss of profit, fire and special perils, burglary and theft extension, legal liability to third parties, expenses incurred due to damage to medical equipment, machinery breakdown, fidelity insurance and other losses in amounts we believe are sufficient. We also maintain personal accident policies for permanent personnel and group medical insurance policies for our personnel and families of our employees. Each of our insurance policies is renewable annually. In prior periods, EHIRCL maintained a key man insurance policies for Dr. Trehan, but this has now all expired. The cost and availability of insurance coverage has varied in recent years and may continue to vary in the future. While we believe that our insurance policies are adequate in amount and coverage for our operations, we may experience unanticipated issues or incur liabilities beyond our current coverage and we may be unable to obtain similar coverage in the future. Personnel We believe that our success depends significantly on our ability to attract, develop and retain highlyskilled doctors, nurses and other personnel at our hospitals. The vast majority of the personnel at the hospitals we operate on an O&M contract basis are compensated by the applicable hospital owners. In addition, we outsource a number of responsibilities at our hospitals, such as housekeeping, security, grounds maintenance and various medical support services at certain of our hospitals. The people onsite at our hospitals who perform these functions are employees of the outsourcing firms and are not our employees. Approximately 11% of the employees (all of which are non-medical employees) at our EHRC hospital belong to a trade union. Certain employees of the Fortis Jessa Ram Hospital are also unionized. We believe that our relationship with our employees and other personnel is good and we have not experienced any work stoppages as a result of labor disagreements at any of our facilities since we began operations. Total personnel compensated directly by us and our subsidiaries (including doctors and other personnel who act as independent contractors) numbered 615 at March 31, 2004, 671 at March 31, 2005 and 4,535 at March 31, 2006. We expect that the number of our hospital personnel will increase as we expand. The table below summarizes the number of personnel at each of our hospitals as at March 31, 2006 (or, in the case of Fortis Flt. Lt. Rajan Dhall Hospital, Vasant Kunj and Khyber Medical Institute,

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June 30, 2006) (including personnel at our O&M hospitals compensated by the O&M hospital owners, but excluding employees of outsourcing firms).2 Location Doctors Nurses Other Medical Personnel 409 142 Total Medical Personnel 695 Other Personnel 129 Total Personnel 824

Fortis Hospital, Mohali EHIRC Fortis Hospital, Noida Fortis Flt. Lt. Rajan Dhall Hospital, Vasant Kunj3 EHRC EHSSI Fortis Hospital, Amritsar Fortis Jessa Ram Hospital Jeewan Mala Hospital Fortis La Femme Khyber Medical Institute4 EHCR Corporate Office
2 3

144

254 103

1,306 279

187 92

1,747 474

345 106

2,029 580

68

113

34

215

112

317

87 26 6

248 106 34

54 42 11

389 174 51

92 47 10

481 221 61

33

74

22

129

64

193

32

163

15

210

43

253

11 10

35 16

14 7

60 33

65 31

125 64

6 -

67 -

9 -

82 -

13 276

95 276

NTD: Numbers to be updated through June 30, 2006 for the RHP. Commenced operations in May 2006. 4 Commenced operations in April 2006. 86

Location

Doctors

Nurses

Other Medical Personnel

Total Medical Personnel

Other Personnel

Total Personnel

Doctors Recruitment: All of our doctors, from residents who have recently concluded their training at a teaching hospital to our most senior consultants and department heads, must meet strict hiring criteria, such as specified performance levels in medical college, during training and, for more senior doctors, at their prior hospitals. Once a doctor has passed this initial threshold, we conduct a series of interviews with the candidate and make inquiries about him or her within the medical community to determine whether the candidate will be suitable for our hospitals. We find most of our younger doctors through application submissions. For more senior doctors, our senior management team maintains a database of both “up and coming” and prominent doctors in various fields who we may approach for positions at our hospitals in the future. Compensation: Doctor compensation is the largest component of our personnel expenses. Compensation for an individual doctor can vary quite substantially based on seniority, specialty, reputation and demand for such doctor’s services. Our doctors are either our employees or serve as independent contractors and provide their services to us for a retainer payment. In general, each of our doctors practicing in the core specialties at one of our hospitals is required to work exclusively at our hospitals, but in certain cases may maintain a position at a local clinic or an affiliation with a teaching hospital. Doctors in non-core specialties (e.g., ENT specialists, dentists and dermatologists) have only a part-time presence at our hospitals, are permitted to maintain their own private practices and positions at a limited number of other hospitals and are compensated on a fee for service basis. The majority of the doctors on staff at our owned hospitals, as well as EHCR and several of our O&M contract hospitals, are compensated on a salary or retainer basis. In addition to a fixed salary, doctors who are our employees also have a variable component to their salaries. The variable component is based on a formula that we believe provides incentives to doctors to maximize the quality of care they deliver to our patients. The formula includes points for the success rate of various procedures, number of procedures, rapport with patients, referrals, local, national and international publications and other public recognition. Nurses and Other Personnel Recruitment: All of the nurses we hire must meet specified hiring criteria, including specified performance levels at nursing school and on a written test we administer to all nursing candidates. Many of our nurses submit applications to us either on an unsolicited basis or in response to advertisements we have placed. In addition, we have a number of student nurses at our hospitals who work under the supervision of a senior nurse. When these trainees finish their coursework, many of them return to our hospitals to work full time. We focus on recruiting nurses with strong skill sets who work well with both our doctors and patients. Similarly, our other medical and non-medical personnel must meet the hiring criteria we have established for their positions and undergo a number of interviews and background inquiries. Compensation: All of the nurses and other staff members at our hospitals are compensated on a salary basis. We offer competitive salaries to our employees and a comprehensive package of benefits, including health insurance, personal accident insurance and discounts on services at our hospitals.

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Outsourcing As mentioned above, a number of people who work at our hospitals, such as housekeeping attendants, groundskeepers and security personnel, are employees of third-party outsourcing firms for whom we provide extensive training. Although we are not directly involved in the hiring of such individuals, our outsourcing partners are required to comply with hiring criteria we specify to them. We pay a set fee to our outsourcing partners who are responsible for compensating their employees and paying their other expenses, including insurance. Retention For fiscal 2006, on a pro forma basis taking into account the Escorts hospitals acquisition and the IHL acquisition, our doctor retention rate at our owned hospitals was approximately 95%, with the attrition concentrated at the resident and senior resident levels. We believe we have been able to control attrition rates by developing and implementing programs, policies and practices like diversified training and career planning for executives, recognition in various forms and mentoring programs. In addition, although our attrition rate for nurses for fiscal 2006, on a pro forma basis taking into account the Escorts hospitals acquisition and the IHL acquisition, was approximately 15% and is much higher than that for our doctors due primarily to nurses leaving to pursue more lucrative overseas or government positions, we have not experienced a shortage of nurses. We believe the worldwide nursing shortage is not as acute in India and that even in the face of a nursing shortage, we are well-positioned in the market to retain our nurses due to our strong reputation and competitive compensation packages. Legal Proceedings We and our subsidiaries are subject to numerous significant claims and legal proceedings. We also expect new claims and legal proceedings to be instituted or asserted against us and our subsidiaries from time to time. The results of these claims and legal proceedings cannot be predicted and it is possible that the ultimate resolution of these claims and legal proceedings, individually or in the aggregate, may have a material adverse effect on our business (both in the near- and long-term), liquidity, financial position or results of operations. Currently, pending claims and legal proceedings that are not in the ordinary course of business are principally related to the subject matters set forth below. See also the section titled “Outstanding Litigation and Material Developments” on page [ ] of this Draft Red Herring Prospectus for additional details on our material litigation. Land Use Matters EHIRCL’s predecessor was a charitable society and subsequently merged with a non-charitable society in the nature of a joint stock company, which was thereafter incorporated as a company with limited liability under Part IX of the Companies Act. The validity of the initial merger of the societies and the subsequent incorporation as a company are now being challenged in the Delhi High Court. The Delhi Development Authority (the “DDA”), the owner of the land on which the EHIRC hospital is located, has treated both the initial merger of the societies and the subsequent conversion to a company as prohibited transfers of property under the terms of its lease of the land and, accordingly, has terminated the lease deeds and allotment letters in respect of the land on which the EHIRC hospital is located by its order dated October 6, 2005 (the “DDA Order”). EHIRCL has filed an original miscellaneous petition (the “OMP”) and a civil suit in the Delhi High Court seeking both a declaration that the DDA Order is illegal and a permanent injunction restraining the DDA from dispossessing EHIRCL without due process of law. The High Court has granted a stay restraining DDA from recovering physical possession of property in both the OMP and the civil suit, and the stay is still in operation. EHIRCL has also filed a letters patent appeal in the Delhi High Court against an order dismissing its writ petition seeking to quash the DDA Order and stay the eviction proceedings
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the trust may not have sufficient funds to compensate us in full or at all. EHIRCL) and. See the section titled “Outstanding Litigation and Material Developments” beginning on page [ ] of this Draft Red Herring Prospectus for additional information regarding these proceedings. and even if such a claim were successful. in which the trust represented to us that it was operating in compliance with all agreements and deeds. 2005 and for which application for renewal was made on January 23. based in part on the cancellation of the lease deed by the DDA. 470.26 million we have spent on improvements to the hospital building and preoperative expenses. leaving the property vacant for a number of years. should be renewed. we may lose the EHIRC hospital facility and our entire investment in the fixed assets therein. If the DDA’s termination of our leases and its eviction proceedings are upheld. by implication. The society filed a suit in the Delhi High Court for declaration and permanent injunction against the DDA. Although we may have a breach of warranty claim under our O&M contract with the trust that owns the hospital. and the subsequent incorporation of the amalgamated society as a limited company (i. In the order terminating the lease. Rajan Dhall Hospital. The Delhi High Court has granted a stay and has restrained the L&DO from giving effect to the termination order and from recovering physical possession of property from the trust.. Vasant Kunj is located. The Land & Development Office of the Ministry of Urban Development of the Government of India (the “L&DO”). Appropriate replies to the DHS notice have been sent. has terminated the lease deed in respect of such land. which owns approximately 12% of the land on which Fortis Jessa Ram Hospital is located. which expired on March 31. void the Escorts hospitals acquisition and (b) to restrain Escorts Limited from transferring or creating any third party rights with respect to its shares in EHIRCL. EHIRCL has recently received a show cause notice from the Directorate of Health Services (the “DHS”) requiring EHIRCL to show cause why its nursing license. The trust has filed a suit in the Delhi High Court for declaration and permanent injunction against the L&DO. See the section titled “Outstanding Litigation and Material Developments” beginning on page [ ] of this Draft Red Herring Prospectus for additional information regarding these proceedings. Lt. 350 million investment in respect of the license fee we paid to obtain the O&M rights for this hospital and the Rs. inter alia. 2006. we may not be successful in bringing any such claim. 29. These matters are currently pending in the Delhi High Court. as well as the portion of the Rs. the L&DO alleges. If this matter is resolved in a manner adverse to the hospital. among others. our O&M contract for the hospital would no longer be effective. the land allotted by the L&DO has been lying vacant and has been taken over by us as a result of our entry into the O&M contract with the trust that owns the hospital. In the order terminating the lease.e. has terminated the lease deed in respect of such land. The DDA thereafter filed an application with the Delhi High Court seeking a restraining order against the entry by the trust into agreements with third parties. inter alia. which owns the land on which Fortis Flt. for a declaration and permanent injunction against EHIRCL. The High Court 89 . our O&M contract for the hospital would no longer be effective.before the Estate Officer of the DDA. in the Delhi High Court seeking. Although the society that owns the hospital is required under the O&M contract to reimburse us for all amounts invested with interest. the DDA alleges that the society that owns the hospital did not use the property in accordance with the terms of the lease. and we could lose our entire Rs. sufficient funds to do so.17 million we have spent on medical and other equipment and other hospital infrastructure that is not movable. These matters are currently pending in the Delhi High Court. The DDA. Anil Nanda Matter A civil suit has been filed by Anil Nanda. If this matter is resolved in a manner adverse to the hospital. a member of the former Delhi Society. (a) to void the amalgamation of EHIRCL’s predecessors. These matters are currently pending in the Delhi High Court. Alternatively. including our O&M contract. The Delhi High Court has granted a stay restraining DDA from recovering physical possession of property. In addition. we may also be required to make substantial compensatory payments to DDA. Delhi Society and Chandigarh Society. the society does not currently have. and we could lose all or some of our investment in the infrastructure of the hospital. and in the future may not have (even if it were successful in claiming compensation from the DDA for the hospital building).

we may be required to provide free or discounted healthcare services to additional patients. If. The hospital filed a scheme of compliance with the High Court to provide free medical care to residents of Faridabad who are below the poverty line. Delhi Society and Chandigarh Society. we may be required to provide free or discounted healthcare services to additional patients. We have filed appeals with the Commissioner of Income Tax (Appeals) . see the section titled “Outstanding Litigation and Material Developments” beginning on page [ ] of this Draft Red Herring Prospectus. amounts found to be due under 90 . The matter is currently pending before the High Court. and we have not made any further attempts to contact the DDA. We believe we have complied with all free bed requirements in the allotment applicable to us. The High Court directed the State of Haryana to examine the hospital's scheme of compliance with the terms of the allotment letter. The matter is currently pending in the Delhi High Court. Income Tax Matters The Central Government’s Income Tax Department has re-opened certain tax assessments of EHIRCL’s predecessors. however. the merger and incorporation which made EHIRCL a for-profit limited company in April and May 2000. An additional Rs. The assessing officer has also initiated penalty proceedings in respect of the re-opened assessments. Although a portion of the consideration we paid in connection with the Escorts hospitals acquisition remains in an escrow account pending the resolution of the income tax matters. For further details. see the section titled “Outstanding Litigation and Material Developments” beginning on page [ ] of this Draft Red Herring Prospectus. 2005. 42. we are unsuccessful in our attempts to defend this litigation. could be annulled. The Supreme Court has directed a stay in the proceedings at the High Court pending final disposal of the matter. Although we may have a claim against the sellers in the Escorts hospitals acquisition for breach of warranty in the event the litigation challenging our corporate existence is resolved in a manner adverse to us. The Income Tax Department has assessed additional income tax payments in an aggregate amount of Rs. If. For further details. 3. including the re-opening of tax assessments and the raising of certain tax demands. however. we attempted to initiate settlement discussions with the DDA but the DDA did not respond to our initial correspondence.II. Free Treatment Matters In March 2004. we are unsuccessful in our attempts to defend this litigation.40 million has been assessed for fiscal 2003 for EHIRCL. We have also filed a writ petition in the Delhi High Court seeking to quash orders passed by the Assessing Officer. and to make suitable corrections in operations. A private plaintiff has filed a writ petition against us in the High Court of Punjab and Haryana in 2000 alleging that EHRC at Faridabad was being operated in violation of the condition in the allotment of land to provide free medical treatment.044. as could our acquisition of EHIRCL. If the plaintiff in this matter is successful. we may not be able to recover amounts paid by us in connection therewith from the sellers. We filed a special leave petition in the Supreme Court on March 8. New Delhi and the Income Tax Appellate Tribunal and the matters are currently pending. including EHIRC. we may be unable to recover the consideration we paid in respect of the Escorts hospitals acquisition. For further details. We believe we have complied with all free bed requirements applicable to us. 2002 against the interim order of the High Court. the Delhi High Court made EHIRC party to a public interest litigation (“PIL”) filed in July 2002 regarding the applicability of conditions regarding the provision of free treatment to indigent patients in hospitals located on certain plots of land allotted by DDA at concessional rates. If either the merger or the incorporation is annulled. In 2004. see the section titled “Outstanding Litigation and Material Developments” beginning on page [ ] of this Draft Red Herring Prospectus.has ordered the parties to maintain the status quo as of September 30. and the High Court is presently reviewing the status report filed by a court-appointed independent committee in respect of the compliance with free treatment conditions by 26 hospitals to which land has been allotted at concessional rates.30 million for periods ranging between fiscal 1997 and fiscal 2001. respectively.

should be renewed. We and our personnel in control positions and. Escorts Limited has recently taken action in the courts to enjoin the tax authorities from unilaterally attaching any of the escrow amounts and has added us as a party in the proceedings. The existing nursing license expired in March 2006 and the hospital is currently operating without a valid nursing license.00 million of such liability. If the hospital fails to obtain a nursing license. For further details.17 million we have spent on medical and other equipment and other hospital infrastructure that is not movable. 2006. as well as the portion of the Rs. Operating Licenses As described above. We expect the indemnity in the Escorts hospitals acquisition agreement and the escrow of a portion of the purchase price to cover approximately 47. the owners of such hospitals and their personnel in control positions could also face civil and criminal sanctions in connection with the operation of these hospitals in the absence of a nursing license. see the section titled “Outstanding Litigation and Material Developments” beginning on page [ ] of this Draft Red Herring Prospectus. 29. EHIRCL has recently received a show cause notice from the DHS requiring EHIRCL to show cause why its nursing license. believes that a nursing license is deemed granted upon receipt of an application therefor by the DHS unless it is refused by the licensing authorities. 350 million investment in respect of the license fee we paid to obtain the O&M rights for this hospital and the Rs. If this matter is resolved in a manner adverse to the hospital. and we could lose our entire investment in respect of the hospital. Lt. Although the society that owns the hospital is required under the O&M contract to reimburse us for these amounts with interest in such an event. the hospital would be banned from performing inpatient procedures at the hospital. and the indemnity covers one-third of any amounts actually assessed in excess thereof. and we could lose our entire Rs. the society does not currently have. If this matter is resolved in a manner adverse to the hospital.the income tax proceedings may exceed the escrow amount. sufficient funds to do so. Vasant Kunj applied for a nursing license in March 2006 and commenced operations in May 2006 prior to obtaining the nursing license based on a deemed registration.37% of the total potential tax assessment for previous periods as described above. The escrow will cover the first Rs. an application for renewal of the Fortis Jessa Ram Hospital's nursing license was filed in January 2006. and in the future may not have (even if it were successful in claiming compensation from the DDA for the hospital building). the hospital would be banned from performing inpatient procedures at the hospital. Rajan Dhall Hospital. but to date. Without a nursing license. in the case of the matters relating to O&M contract hospitals. The society that owns the hospital has filed appropriate replies to the show cause notice and order and. it would no longer be able to perform inpatient procedures at the hospital.26 million we have spent on improvements to the hospital building and preoperative expenses. The hospital has received a show cause notice from the DHS that it is operating in violation of the licensing requirement. as well as an order from the DHS to cease operations of its inpatient department. which expired on March 31. based in part on the cancellation of the lease deed by the DDA. our O&M contract for the hospital would no longer be effective. Fortis Flt. 650. 470. 91 . 2005 and for which application for renewal was made on January 23. based on an independent legal opinion. our O&M contract for the hospital would no longer be effective. and we may not be able to recover amounts due to us under the indemnity arrangements in the acquisition agreement relating to the Escorts hospitals acquisition. Without a nursing license. the hospital has not received a renewal. Appropriate replies to the DHS notice have been sent. In addition.

We and our subsidiaries are currently subject to 117 claims filed by or on behalf of patients seeking damages aggregating approximately Rs. The largest category of these proceedings relates to medical negligence.99 million. While we believe that these medical negligence or malpractice claims. to the extent that we are held liable in any or all of them. such claims individually or in the aggregate may exceed our coverage Properties The following table sets forth the significant properties owned or leased by FHL and its subsidiaries as of the date hereof: 92 . we are subject to claims and legal proceedings in the ordinary course of business. are fully covered under our professional and general liability insurance policies. 5 million. with 10 claims seeking damages of more than Rs. 404. The claims are at various stages of litigation and the outcomes of these claims are uncertain.Medical negligence matters In addition to the matters described above.

22. 14 years from March 2003.34 Perpetual . Srinivas Puri. Plot No.Lessee/ Owner Location Address Nature of Property Rights Leasehold FHL New Delhi Piccadily House. Punjab Freehold 3. Five years from January 2006 . “Nagpal Towers”. New Delhi 110065 Fortis Hospital. Phase II.71 EHRCL Faridabad.54 EHIRCL Leasehold 7. Okhla Road.11 IHL Noida. Haryana New Delhi Freehold Leasehold 10. SCO 128. Madhya Marg. Shalimar Bagh 93 Area (in acres unless otherwise stated) 0. Mohali 160062 Fortis City Center. Sector 62. Ranjit Nagar.22 Chandigarh . Malviya Nagar. SCO 56-58. Noida 201301 Escorts Heart Institute & Research Centre. Sector 9D. Punjab Leasehold 8. Block B.19 EHSSHL Jaipur. Amritsar. Punjab Leasehold 0. Sector 62. Capt. Haryana Leasehold 5. X3 Majitha Verka Bypass Road Amritsar 143004 Escorts Hospital and Research Centre Neelam Bata Road.09. 275-276. Faridabad 122001 Sector 44. New Industrial Township.81 7. Fortis Hospital. Gaur Marg. 4th Floor. Gurgaon 122001 Block A.60 99 years from December 1999 - EHSSIL Amritsar. SAS Nagar. Uttar Pradesh New Delhi Leasehold 5. subject to renewal 90 years from January 1996 Perpetual Mohali. District Shopping Centre. Rajasthan Leasehold 6. Amritsar 143001 Fortis Hospital. Chandigarh 160069.17 Term Three years from February 2006 Ten years from October 2003 . New Delhi 110025 Jawaharlal Nehru Marg. Phase VIII. Institutional Area. Punjab Leasehold 0. Khasra No. Urban Estate. Jaipur 302017 Escorts Heart and SuperSpeciality Institute Plot Private 21.03 Perpetual OBPL Gurgaon.

Tehsil Sohna. Haryana New Delhi 110088 Village Gwalpahari. District Gurgaon 122001 Freehold Freehold 10. Haryana Gurgaon.35 2.Gurgaon.41 - In addition. Tehsil Sohna. 94 . District Gurgaon 122001 Village Gwalpahari. For further details see the section titled “—Our Facilities” under this section titled “Our Business” beginning on page [●] of this Draft Red Herring Prospectus for a summary of the number of beds at each facility. we also manage six hospitals and 16 satellite and heart command centers which we do not own.

The BMW Rules further require such person to submit an annual report to the prescribed authority and also to maintain records related to the generation. Delhi Nursing Home Registration Act. private hospitals and clinics need government approval and authorization (certification) to provide medical termination of pregnancy services. training and experience in performing medical termination of pregnancy and only at a place which has facilities that meet the standards specified in the rules and regulations issued under the MTP. Drugs and Cosmetics Act. The certificate of registration under the DNHR is issued by the Director of Health Services. at various stages. 1953 (“DNHR”) The DNHR provides for the registration and inspection of nursing homes in Delhi. It further mandates that every person holding a licence must keep and maintain such records. sale or distribution of any drug or cosmetic. treat. Contravention of the provisions of the DNHR is punishable with fine and/or imprisionment. disposing and/or handling bio-medical waste to take steps to ensure that such waste is handled without any adverse effect to human health and environment and to apply to the prescribed authority for grant of authorization. the DCA regulates the import. etc. distribution and sale of drugs for the proper protection of drugs and medicines and prohibits the manufacture and sale of certain drugs and cosmetics which are misbranded. The DCA specifies the requirement of a license for the manufacture. The registration under the DNHR is required to be renewed annually. adulterated. storage. As per Section 3 of the DNHR. including sanitary and safety standards and conformity with conditions of allotment of land. nursing homes and hospitals in Delhi are prohibited from carrying on business without valid registration. 1971 (“MTP”) The MTP regulates the termination of pregnancies by registered medical practitioners and permits termination of pregnancy only on specific grounds and for matters connected therewith.REGULATIONS AND POLICIES IN INDIA The Company is engaged in the business of operating and managing hospitals and we are governed by a number of central and state legislations that regulate our business. disposal. Under the rules framed pursuant to the MTP. Medical Termination of Pregnancy Act. 1998 (“BMW Rules”) The BMW Rules apply to all persons who generate. 1940 (“DCA”) In order to maintain high standards of medical treatment. Government of Delhi. transport. registers and other documents as may be prescribed which may be subject to inspection by the relevant authorities. Under the MTP. and/or any form of handling of bio-medical waste in accordance with rules and guidelines issued. collecting. The following discussion summarises certain significant laws and regulations that govern our business. transportation. Additionally. our functioning requires. collection. It stipulates that abortion can be carried out only in certain stipulated circumstances by a registered medical practitioner who has the necessary qualification. treatment. Bio-Medical Waste (Management and Handling) Rules. treating. private clinics can receive their certification 95 . dispose or handle bio-medical waste in any form and regulate the mode of treatment and disposal of bio-medical waste. The BMW Rules mandate every occupier of an institution generating. transporting. manufacture. spurious or harmful. the sanction of the concerned authorities under the relevant legislations and local bye-laws. on being satisfied that the nursing home or hospital conforms to the standards laid down in the DNHR and the rules framed hereunder.

The THOA prohibits the removal of any human organ except in situations provided therein. drawings and other documents as regards any prescribed substance in the AEA that can be a source of atomic energy and further states that the Central Government may prohibit among other things the acquisition. disposal. 1962 (“AEA”) In order to ensure safe disposal of radioactive wastes and secure public safety and safety of persons handling radioactive substances. The PDT makes it mandatory for all genetic counselling centers. 1971 (“RPR”) The RPR provides that all persons handling radioactive material need to obtain a license from a competent authority. production. The RSPR mandates an employer to appoint a “Radiological Safety Officer” with the approval of the competent authority for the implementation of the radiation protection programme including all in-house radiation surveillance measures and procedures and to discharge the functions as specified under it. and the clinic has the requisite infrastructure and instruments in place. export or import of any prescribed equipment. 2001 (“Code”) 96 . use. genetic clinics. No hospital can provide services relating to the removal. possession. storage and transplantation of human organs for therapeutic purposes and for the prevention of commercial dealings in human organs and for matters incidental thereto. the AEA mandates that no minerals. laboratories and all bodies utilising ultrasound machines to register with their respective appropriate authorities failing which penal actions could be taken against them. It stipulates that no person is to use any radioactive material for any purpose. the employer is also required to obtain prior permission from the competent authority for undertaking any decommissioning operation. Code No. for matters connected therewith or incidental thereto. Pre-Natal Diagnostic Techniques (Regulation and Prevention of Misuse) Act. 1994 (“THOA”) The THOA provides for the regulation of removal. storage or transplantation of any human organ therapeutic purposes unless such hospital is duly registered under the THOA. and. Further. or substance. in any location and in any quantity. AEA provides that the Central Government may require a person to make periodical and other returns or such statements accompanied by plans. excepting under a license granted by it to that effect. Transplantation of Human Organs Act. Radiation Surveillance Protection Rules 1971 (“RSPR”) The RSPR provides that every employer required to handle radiation equipment or radioactive material must obtain the prior permission of the competent authority. other than in a manner otherwise specified in the license and that every employer must designate a “Radiological Safety Officer” and maintain records with respect to every such radiation worker in the manner prescribed under the RPR.only if the government is satisfied that termination of pregnancies will be done under safe and hygienic conditions. 1994 (“PDT”) The PDT regulates the use of pre-natal diagnostic techniques for the purposes of detecting genetic or metabolic disorders or chromosomal abnormalities or certain congenital malformations or sex-linked disorders and for the prevention of the misuse of such techniques for the purposes of pre-natal sex determination leading to female foeticide. Radiation Protection Rules. The Atomic Energy Act. AERB/SC/MED-2 (Rev-1) dated October 5. concentrates and other materials which contain prescribed substances be disposed of without the previous permission in writing of the Central Government.

1948 (“PA”) The PA provides that all pharmacists require a registration under the PA. the Employees’ Provident Funds and Miscellaneous Provisions Act. and further to carry out quality assurance performance test of the X-ray unit and to employ qualified staff. 1970. The Code mandates that only those medical X-ray machines which are of the type approved by Atomic Energy Regulatory Board (“AERB”) are to be installed for use. and (e) such further particulars as may be prescribed. the name of such person. 1985. 1936. (d) his professional address. 1948. the Payment of Wages Act. (c) his qualifications for registration. (b) the date of his first admission to the register. 1955 are also applicable to us. the Employees State Insurance Act. Pharmacy Act. the Shops and Commercial Establishments Act. It further provides among other things. 97 . the Dangerous Drugs Act. the Trade Unions Act. 1972. 1948. which registration process includes providing: (a) the full name and residential address of the pharmacist. 1930 and the Medical and Toilet Preparations Act. Non-compliance with the regulatory requirements set forth in the Code could result in closure of the defaulting X-ray installations. that the owners of medical X-ray installations in India be registered with AERB. 1965. the Payment of Bonus Act. 1922. Certain other legislation such as the Narcotic Drugs and Psychotropic Substances Act. and the Workmen’s Compensation Act. including the Contract Labour (Regulation and Abolition) Act.The Code stipulates that all medical X-ray machines are required to be operated in accordance with the requirements outlined therein and that it is the responsibility of the owner/user of medical X-ray installation equipment to ensure compliance with the statutory provisions. 1926. and if he is employed by any person. the Payment of Gratuity Act. A wide variety of labour laws are also applicable to the nursing and hospital sector. the Minimum Wages Act. 1952.

in the ratio of 1:4 (i. Subsequently on June 20. 2005 in respect of the company petition (C. Pursuant to the Scheme. 1996. the date on which a certified copy of the order of the High Court of Delhi was filed with the RoC) became the employees of the Company without any break or discontinuity in service and on conditions not less favourable than those subsisting at FMCHL. approvals. the Company allotted 520. 2004 (“Scheme”). liabilities and obligations.HISTORY AND CERTAIN CORPORATE MATTERS The Company was incorporated on February 28. 275. as sanctioned by the High Court of Delhi. and which at the time of amalgamation was our board controlled subsidiary. In consideration of the transfer and vesting of the undertaking and the assets and liabilities of FMCHL and in consideration of the mutual covenants agreed to in the Scheme. tangible and intangible assets including trademarks. tax benefits. with effect from April 1. design. All the staff. 4th Floor. the transfer of the aforesaid was subject to the existing charges or hypothecation in respect of the assets of FMCHL. New Delhi 110 065. all properties. New Delhi 110 019. Captain Gaur Marg. No: 240/2005 and 241/2005) approved the scheme of amalgamation/merger between the Company and Fortis Medical Centre Holdings Limited (“FMCHL”). Amritsar. India. Pursuant to a Board resolution dated September 16. Amritsar was transferred to the Company.e. 2003 the registered office was shifted to B9. 1996 our name was changed to our present name-Fortis Healthcare Limited. pursuant to Board resolution dated February 10. However.276. one Equity Share in exchange of every four equity shares of FMCHL of Rs.e. Executed an agreement with Seth Jessa Ram and Bros Charitable Hospital 98 . 1996 as Rancare Limited under the Companies Act. Changes in Registered Office: The registered office of the Company was initially situated at 25. Maharani Bagh. Subsequently. Inauguration and commissioning of Fortis Hospital.. licenses. New Delhi 110 065.P. In compliance with the Scheme. through its order dated October 7. copyrights. the Company agreed to allot the Equity Shares to the existing shareholders of FMCHL. Scheme of merger/amalgamation between Fortis Medical Centre Holdings Limited and the Company dated October 7. India. are set forth below: The entire undertaking and business. 2005: The High Court of Delhi. Nehru Place. 2006. debts. 2006 the registered office of the Company was shifted to Piccadily House. patents. investments. Mohali. pending projects. which is the current Registered Office. India. including income tax liabilities accrued or to accrue in FMCHL was transferred to the Company with effect from April 1. 10 each).. 2004. The Company received the certificate of commencement of business on July 1. Major Events: Year June 2001 August 2003 October 2003 Event Commissioning of Fortis Hospital. workmen and employees of FMCHL in employment on the date immediately preceding December 23. Srinivas Puri. Fortis Hospital. Salient features of the Scheme: The principal terms of the Scheme.000 Equity Shares to the shareholders of erstwhile FMCHL on February 10. 2005 (i.

Year August 2004 September 2005 October 2005 January 2006

January 2006 March 2006 March 2006

Event Trust for the operation and management of Jessa Ram Hospital, New Delhi. Commissioning of Fortis Hospital, Noida. Acquired 90% of the equity share capital of Escorts Heart Institute and Research Centre Limited resulting in the acquisition of EHCL, EHSSIL, EHSSHL and EHRCL. Signed an agreement with Jeewan Mala Hospital Private Limited for the operation and maintenance of Jeewan Mala Hospital, New Delhi. Signed an agreement with Sunrise Medicare Private Limited for the operation and management of Fortis La Femme, New Delhi, and acquisition of 5% equity interest in Sunrise Medicare Private Limited, with an option to acquire additional equity shares. Signed an agreement with Khalil Public Welfare Trust for the operation and maintenance of Khyber Medical Institute, Srinagar. Acquired 99.99% of the paid up equity share capital of International Hospital Limited resulting in the acquisition of Fortis Hospital, Noida. Acquired 100.00% of the paid up equity share capital of Oscar Bio-Tech Private Limited.

Acquisition of Escorts Heart Institute and Research Centre Limited The Company has purchased 1,800,300 equity shares of EHIRCL (“Purchase Shares”), constituting 90% of the share capital of EHIRCL, pursuant to a share purchase agreement dated September 25, 2005 (“Share Purchase Agreement”) executed among Escorts Limited, AAA Portfolio Private Limited, Big Apple Clothing Private Limited, Charak Ayurvedic Institute, Escorts Employees Welfare Trust, Diamond Leasing and Finance Limited (collectively referred to as the “Sellers”) and the Company for a total consideration of Rs. 5,850.10 million. There was no valuation of the equity shares of EHIRCL by an independent valuer prior to the acquisition of EHIRCL. Further, pursuant to the Share Purchase Agreement, the parties also entered into an escrow agreement dated September 27, 2005 (“EHIRC Escrow Agreement”) with HDFC Bank Limited (“Escrow Agent”) whereby the Company deposited the entire sale consideration with the Escrow Agent (“Escrow Amount”) and the Sellers deposited the relevant documents including the delivery instruction slips and share transfer forms (“Escrow Documents”) relating to the Purchase Shares. Under the Share Purchase Agreement and the EHIRC Escrow Agreement, the Escrow Agent was directed to release the Escrow Amount and the Escrow Documents in the following manner: a. Upon receipt of joint instructions from Escorts Limited and the Company, the Escrow Agent is directed to release Rs. 2,021.95 million in favour of the lenders (i.e., Life Insurance Corporation of India, Housing Development Finance Corporation Limited and Industrial Development Finance Corporation Limited) with whom 1,600,000 equity shares of EHIRCL held by Escorts Limited are pledged, and to release Rs. 155 million in favour of EHIRCL in respect of an inter-corporate deposit placed by EHIRCL with Escorts Limited, pursuant to which the Company will become the beneficial owner of 1,600,000 equity shares of EHIRCL. The aforesaid amounts aggregating to Rs. 2,176.95 million have been released in favour of the lenders and EHIRCL by the Escrow Agent. Upon receipt of instructions from the Company, the Escrow Agent is directed to, after retaining Rs. 850 million (“Heldback Amount 1”) and Rs. 649.90 million (“Heldback Amount 2”), release Rs. 324,951 each in favour of Charak Ayurvedic Institute, Escorts Employees Welfare Trust and Diamond Leasing and Finance Limited and further release a sum of Rs. 2,172.27 to Escorts Limited against the simultaneous release of the Escrow Documents in favour of the Company. The aforesaid amounts aggregating to Rs. 2,173.25 million have been released by the Escrow Agent against the release of the Escrow Documents to the Company.
99

b.

c. d.

Subject to (a) and (b) above, the Heldback Amount 1 shall be released by the Escrow Agent to Escorts Limited upon receipt of instruction from Escorts Limited, the Company and/or the lender. Heldback Amount 2, being sale consideration payable to AAA Portfolio Private Limited and Big Apple Clothing Private Limited, is to be retained by the Escrow Agent and such amount is to be invested in capital gains and tax saving bonds in their names in equal proportions. The securities are to be kept in the custody of the Escrow Agent as security towards final settlement of the income tax claim/demand (including interest, penalty thereon and legal expenses incurred by Escorts Limited in defending the claim) of EHIRCL. Escorts Limited has a right to substitute the securities with cash or other securities as may be acceptable to the Company. Accordingly, the Heldback Amount 2 is to be utilised in the following manner upon receipt of opinion from the named accounting firms certifying that the demand pertains to the income tax demand: i. In the event the income tax claim is equal to Heldback Amount 2, the entire Heldback Amount 2 is payable to the Company. ii. In the event the income tax claim exceeds is in excess of the Heldback Amount 2, the entire Heldback Amount 2 is payable to the Company and the remaining amount between the income tax claim and the Heldback Amount 2 is to be borne by Escorts Limited and the Company in the ratio of 1/3 and 2/3 respectively, in accordance with the Share Purchase Agreement. iii. In the event the income tax claim is less than the Heldback Amount 2, the Escrow Agent shall pay to Escorts Limited and/or AAA Portfolio Private Limited and/or Big Apple Clothing Private Limited the remaining amount after the payment of the income tax claim amount to the Company. On the income tax claim/demand being paid to the Company, Escorts Limited and/or AAA Portfolio Private Limited and/or Big Apple Clothing Private Limited shall stand discharged of all its obligations.

EHIRCL (formerly a charitable society, which subsequently merged with a non charitable society and thereafter incorporated as company with limited liability under the Companies Act), is involved in a litigation (Suit No: C.S. (OS) 1372/ 2005) regarding the validity of such merger of a charitable society with a non charitable society and subsequent incorporation into a company. Pursuant to the order of the High Court of Delhi dated September 30, 2005 whereby the court has ordered the parties, including EHIRCL, to maintain status quo, Heldback Amount 1 and Heldback Amount 2 are currently being held in escrow. For further details, see the sections titled “Our History and Certain Corporate Matters-Subsidiaries of the Company” and “Outstanding Litigation and Material Developments” beginning on pages [●] and [●] of this Draft Red Herring Prospectus. Acquisition of International Hospital Limited The Company and IHL entered into an agreement in December 20, 2002, pursuant to which IHL became a board controlled subsdiary of the Company. Subsequently, the Company purchased 3,014,930 equity shares in IHL on March 20, 2006 from Fortis Healthcare Holdings Limited, Oscar Investments Limited, Ranbaxy Holding Company and Fortis Financial Services Limited, constituting 99.86% of the issued share capital of IHL for a total consideration of Rs. 301.49 million. On March 23, 2006 the Company also subscribed to 1,006,000 equity shares of IHL for a total consideration of Rs. 100.60 million. As a result of these acquisitions, the Company holds 4,021,090 equity shares of IHL, constituting 99.99% of the issued share capital of IHL. There was no valuation of the equity shares of IHL by an independent valuer prior to the acquisition of IHL. Acquisition of Oscar Bio-Tech Private Limited The Company purchased 3,050,000 equity shares in OBPL on March 20, 2006, from Mr. Shivinder Mohan Singh, Mr. Malvinder Mohan Singh and Ranbaxy Holding Company for a total consideration
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of Rs. 30.50 million constituting 100%. On March 22, 2006, the Company subscribed to 32,950,000 equity shares of OBPL for consideration of 329.50 million. Subsequently, on March 30, 2006, the Company subscribed to 9,000,000 equity shares of OBPL for a consideration of Rs. 90.00 million to OBPL. Pursuant to the above, OBPL became a wholly owned subsidiary of the Company. There was no valuation of the equity shares of OBPL by an independent valuer prior to the acquisition of OBPL Our Main Objects The main objects of the Company as contained in our Memorandum of Association are follows: a. To purchase, lease or otherwise acquire, establish, maintain, operate, run, manage or administer hospitals, medicare, health care, diagnostic, health aids and research centres. b. To provide medical relief to the public in all branches of medical schemes by all available means. c. To carry out medical and clinical research by engaging in the research and development of all medical sciences and therapies. d. To undertake, promote or engage in all kinds of research including clinical research and development work required to promote, assist or engage in setting up hospitals, health care centres and facilities for manufacturing medical equipment etc. e. To provide, encourage, initiate or promote facilities for the discovery, improvement or development of new methods of diagnostic, understanding and prevention and treatment of disease. Changes in Memorandum of Association Since our incorporation, the following changes have been made to our Memorandum of Association: Date of Amendment June 20, 1996 November 9, 1998 June 28, 2000 July 10, 2001 September 27, 2002 September 30, 2004 March 8, 2006 August 30, 2006 September 25, 2006 Amendment The name of the Company was changed from Rancare Limited to Fortis Healthcare Limited. The authorised share capital of the Company was increased from Rs.10 million to Rs. 150 million. The authorised share capital of the Company was increased from Rs.150 million to Rs. 550 million. The authorised share capital of the Company was increased from Rs.550 million to Rs. 750 million. The authorised share capital of the Company was increased from Rs.750 million to Rs. 775 million. The authorised share capital of the Company was increased from Rs.775 million to Rs. 890 million (divided in to 87,000,000 Equity Shares of Rs. 10 each and 200 Preference Shares (Class A)) The authorised share capital of the Company was increased from Rs.890 million to Rs. 2,000 million (divided into 198,000,000 Equity Shares of Rs. 10 each and 200 Preference Shares (Class A)). The authorised share capital of the Company was increased from Rs.2,000 million to Rs. 3,000 million (divided into 298,000,000 Equity Shares and 200 Preference Shares (Class A)) The authorised capital of the Company was re-classified as Rs. 3,000 million, divided into 272,000,000 Equity Shares and 200 Preference Shares (Class A) and 260,000,000 Preference Shares (Class B).
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Subsidiaries of the Company: The following are the subsidiaries of the Company: a. b. c. d. e. f. g. a. Escorts Heart Institute and Research Centre Limited; Escorts Heart and Super Speciality Institute Limited; Escorts Heart Centre Limited; Escorts Hospital and Research Centre Limited; Escorts Heart and Super Speciality Hospital Limited; International Hospital Limited; and Oscar Bio-Tech Private Limited. Escorts Heart Institute and Research Centre Limited (“EHIRCL”)

EHIRCL was incorporated under Part IX of the Companies Act on May 30, 2000 as a company engaged to promote and conduct research in cardiology, thoracic surgery and other medical fields and to maintain and run necessary infrastructure, including hospitals. The assets owned by EHIRCL were initially vested in a charitable society registered with the Registrar of Firms and Societies, New Delhi on October 21, 1981 under the name of ‘Escorts Heart Institute and Research Centre’ in Delhi (“Delhi Society”) under the Societies Registration Act, 1860 (“SRA”). Subsequently, the Delhi Society was amalgamated with a non charitable society in the nature of a joint stock company, registered on November 11, 1999 under the SRA with the Registrar of Society, Chandigarh under the name ‘Escorts Heart Institute and Research Centre’ in Chandigarh (“Chandigarh Society”). The amalgamation was approved by the boards of governors of the Chandigarh Society and the Delhi Society on January 6, 2000 and December 18, 1999, respectively, subject to adoption by the members of the respective societies. Thereafter, pursuant to resolutions passed by the members of the Delhi Society on January 15, 2000 and February 26, 2000 and the members of the Chandigarh Society on February 7, 2000 and March 17, 2000, all the properties, rights, liabilities, suits and claims of the Delhi Society were to vest in the Chandigarh Society with effect from April 1, 2000 (“Scheme of Amalgamation”). Subsequently, pursuant to special resolution dated May 5, 2000, the Chandigarh Society made an application to the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh for the conversion of the Chandigarh Society into a company by registration of the Chandigarh Society as a company with limited liability under Part IX of the Companies Act with a nominal capital of Rs. 25 million. The Chandigarh Society was registered under Part IX of the Companies Act and the certificate of incorporation incorporating Escorts Heart Institute and Research Centre Limited (“EHIRCL”) was granted on May 30, 2000, pursuant to which all the assets and liabilities of the Chandigarh Society stood vested in EHIRCL with effect from May 30, 2000. Pursuant to the conversion of EHIRCL into a company under Part IX of the Companies Act, the Chandigarh Society applied to the Registrar of Societies, Chandigarh for de-registration. The Chandigarh Society was deregistered on November 27, 2000. Subsequently, pursuant to the share purchase agreement dated September 25, 2005, executed between certain erstwhile shareholders of EHIRCL and the Company, the Company purchased 1,800,300 equity shares of EHIRCL, constituting 90% of the share capital of EHIRCL (“Share Purchase Agreement”) for a total consideration of Rs. 5,850.10 million. For further details, see the section titled “History and Certain Corporate Matters- Acquisition of Escorts Heart Institute and Research Centre Limited” beginning on page [●] of this Draft Red Herring Prospectus.

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The equity shares of EHIRCL are not listed on any stock exchange. Shareholding Pattern The shareholding pattern of EHIRCL as of September 26, 2006, is as follows:
S.No. 1 2. 3. 4. 5. 6. 7. Name Fortis Healthcare Limited Dr. Naresh Trehan International Hospital Limited Malav Holdings Private Limited Shivi Holdings Private Limited Oscar Bio-Tech Private Limited Fortis Healthcare Holdings Limited Total Number of equity shares of Rs. 10 each 1,800,260 200,000 10 10 10 5 5 2,000,300 Percentage of Shareholding 89.99 9.99 0.00 0.00 0.00 0.00 0.00 100.00

Board of Directors The board of directors of EHIRCL currently comprises Mr. Harpal Singh, Mr. Shivinder Mohan Singh and Mr. Malvinder Mohan Singh. Financial Performance The audited financial results of EHIRCL for Fiscal 2004, 2005 and 2006 are set forth below: (In Rs.millions, unless otherwise stated)
Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.) Book Value per share ( Rs.) Fiscal 2005 Fiscal 2006 2,330.12 69.38 20.00 2,155.86 34.68 1,087.77

2,178.90 178.60 20.00 1,946.60 89.29 983.17

2,265.00 134.90 20.00 2,086.50 67.43 1,053.09

b.

Escorts Heart and Super Speciality Institute Limited (“EHSSIL”)

EHSSIL was incorporated on December 22, 1998 under the name “Amritsar Hospitals Limited” as a company engaged in the business of establishing, maintaining and running hospitals and nursing homes, among others. Subsequently, on December 19, 2001, its name was changed to its present name. The equity shares of EHSSIL are not listed on any stock exchange. Shareholding Pattern The shareholding pattern of EHSSIL as of September 26, 2006, is as follows:
S. No. 1. Name EHIRCL Number of equity shares of Rs. 10 each 12,970,000 103 Percentage of Shareholding 82.61

2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Dr. Praveen Kumar Sareen Dr. Ram Murthi Kaushal Dr. Harinder Pal Singh Mr. Rupinder Dhillon Mr. Pran Nath Khindri Dr. Ashwani Duggal Dr. Ashok Mahajan Mr. Ram Prakash Mahajan Dr. Ashok Mahajan (HUF) Dr. Kanchan Mahajan Dr. Uma Sood Dr. Maganjit Kaur Ms. Renu Sarin Dr. Ram Murti and Sons EHIRCL jointly with Dr. Yatin Mehta EHIRCL jointly with Mr. Anil Khubchandani EHIRCL jointly with Dr. Naresh Trehan Dr. Tarlochan Singh Kler EHIRCL jointly with Mr. Sriram Khattar Total

434,700 371,425 302,700 290,000 240,000 240,000 226,100 180,000 132,000 120,100 69,830 66,100 32,700 24,895 100 100 100 100 100 15,701,050

2.77 2.37 1.93 1.85 1.53 1.53 1.44 1.15 0.84 0.76 0.44 0.42 0.21 0.16 0.00 0.00 0.00 0.00 0.00 100.00

Board of Directors The board of directors of EHSSIL currently comprises Dr. Naresh Trehan, Dr. Ram Murthi Kaushal, Dr. Ashok Mahajan and Dr. Tarlochan Singh Kler. Financial Performance The audited financial results of EHSSIL for Fiscal 2004, 2005 and 2006 are set forth below: (In Rs.millions, unless otherwise stated)
Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.) Book Value per share ( Rs.) Fiscal 2005 Fiscal 2006 183.67 (44.67) 157.01 (149.84) (2.85) 0.45

131.90 (60.50) 139.50 (47.50) (0.04) 6.60

150.40 (57.70) 157.01 (105.2) (0.04) 3.30

c.

Escorts Heart Centre Limited (“EHCL”)

EHCL was incorporated on April 27, 2000 under the name “Satellite Heart Institute and Research Centre Private Limited,” as a company engaged in the business of managing, developing and operating hospitals and improving research in cardiology and other medical fields. Subsequently, the company changed its name to “Satellite Heart Hospital and Research Institute Private Limited”. On November 27, 2001, the company changed its name to “Satellite Heart Hospital and Research Institute Limited,” and on November 28, 2001, its name was changed to its present name. The Escorts Heart Centre hospital at Kanpur was operationally closed with effect from August 1, 2005 and the assets were transferred to EHIRCL and Dr. R.N. Dwivedi, a promoter. EHCL currently has no operations.

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The equity shares of EHCL are not listed on any stock exchange. Shareholding Pattern The shareholding pattern of EHCL as of September 26, 2006, is as follows:
S. No. 1. 2. 3. 4. 5. 6. 7. Name EHIRCL EHIRCL jointly with Fortis Healthcare Holdings Limited EHIRCL jointly with Fortis Healthstaff Private Limited EHIRCL and Mr. Shivinder Mohan Singh EHIRCL and Mr. Harpal Singh EHIRC and Fortis Healthworld Private Limited EHIRCL and Mr. Malvinder Mohan Singh Total Number of equity shares of Rs. 10 each 1,969,300 200 100 100 100 100 100 1,970,000 Percentage of Shareholding 99.99 0.01 0.01 0.01 0.01 0.01 0.01 100.00

Board of Directors The board of directors of EHCL currently comprises Mr. Harpal Singh, Mr. Shivinder Mohan Singh, Mr Vinay Kaul and Dr. P.S. Joshi. Financial Performance The audited financial results of EHCL for Fiscal 2004, 2005 and 2006 are set forth below: ( Rs.millions, unless otherwise stated)
Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.) Book Value per share ( Rs.) 23.07 (6.90) 19.70 (20.01) (3.50) (0.16) Fiscal 2005 20.09 (10.26) 19.70 (30.26) (5.21) (5.3) Fiscal 2006 3.40 (4.10) 19.70 (34.37) (2.08) (7.45)

d.

Escorts Hospital and Research Centre Limited (“EHRCL”)

EHRCL was incorporated under the name “Escorts Hospital and Research Centre Private Limited” on December 16, 1997, as a company engaged in the business of operating nursing homes and medical centres, among others. The word “Private” was subsequently deleted and the company became a deemed public company with effect from March 25, 1998 under the then existing provisions of the Companies Act. The equity shares of EHRCL are not listed on any stock exchange. Shareholding Pattern

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The shareholding pattern of EHRCL as of September 26, 2006, is as follows:
S. No. 1. 2. 3. 4. 5. 6. 7. Name EHIRCL EHIRCL jointly with FHHL EHIRCL jointly with Mr. Shivinder Mohan Singh EHIRCL jointly with Fortis HealthStaff Private Limited EHIRCL jointly with Fortis HealthWorld Private Limited EHIRCL jointly with Mr. Fortis Clinical Research Limited EHIRCL jointly with OBPL Total Number of equity shares of RS. 10 each 21,999,968 10 6 4 4 4 4 22,000,000 Percentage of Shareholding 99.99 0.00 0.00 0.00 0.00 0.00 0.00 100.00

Board of Directors The board of directors of EHRCL currently comprises Mr. Sunil Godhwani, Dr. P.S. Joshi, Dr, Naresh Trehan, Mr. Harpal Singh, Mr. Shivinder Mohan Singh, Mr. Malvinder Mohan Singh and Mr. Vinay Kaul. Financial Performance The audited financial results of EHRCL for Fiscal 2004, 2005 and 2006 are set forth below: (Rs.millions, unless otherwise stated)
Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.) Book Value per share ( Rs.) 275.60 (65.79) 220.00 187.80 (2.99) 18.54 Fiscal 2005 337.50 (20.49) 220.00 167.40 (0.93) 17.61 Fiscal 2006 407.84 3.00 220.00 170.33 0.14 17.74

e.

Escorts Heart and Super Speciality Hospital Limited (“EHSSHL”)

EHSSHL was incorporated on April 24, 2003 as a company engaged in the business of managing research in cardiology and cardio vascular sciences among other medical fields. The equity shares of EHSSHL are not listed on any stock exchange. Shareholding Pattern The shareholding pattern of EHSSHL as of September 26, 2006, is as follows:
S.No. 1. 2. 3. Name EHIRCL EHIRCL and Mr. Harpal Singh EHIRCL and Mr. Shivinder Mohan Singh Number of equity shares of Rs. 10 each 9,149,400 100 100 Percentage of Shareholding 99.99 0.00 0.00

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4. 5. 6. 7.

EHIRCL Limited EHIRCL Singh EHIRCL Limited EHIRCL Limited Total

and Fortis Healthcare Holdings and Mr. Malvinder Mohan and Fortis HealthStaff Private and Fortis HealthWorld Private

100 100 100 100 9,150,000

0.00 0.00 0.00 0.00 100.00

Board of Directors The board of directors of EHSSHL currently comprises Mr. Shivinder Mohan Singh, Mr. Vinay Kaul, Mr. Malvinder Mohan Singh, Dr. Naresh Trehan and Dr. P.S. Joshi. Financial Performance The audited financial results of EHSSHL for Fiscal, 2004, 2005 and 2006 are set forth below: (Rs.millions, unless otherwise stated)
Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.) Book Value per share ( Rs.) Fiscal 2005 Fiscal 2006 91.50 10.00

0.50
-

91.50
-

10.00

10.00

f.

International Hospital Limited (“IHL”)

IHL was incorporated on March 8, 1994 as “International Hospital Private Limited” as a company engaged in the business of establishing, maintaining and running hospitals, nursing homes and clinics among others. Subsequently, on January 3, 2005 its name was changed to its present name. IHL became a board controlled subsidiary of the Company from December 20, 2002. Subsequently, the Company purchased 4,020,930 equity shares in IHL on March 20, 2006 and March 23, 2006 constituting 99.99% of the issued share capital of IHL. The equity shares of IHL are not listed on any stock exchange. Shareholding Pattern The shareholding pattern of IHL as of September 26, 2006, is as follows:

S. No. 1. 2. 3.

Name of the Shareholders Fortis Healthcare Limited Dr. Syed Farooq Mr. Sirajuddin Quereshi 107

Number of equity shares of Rs. 100 each 4,021,090 3,010 1,010

Percentage of Shareholding (%) 99.90 0.10 0.03

4. 5. 6. 7.

Mr. Khalilulla M Mr. Harpal Singh Mr. Shivinder Mohan Singh Mr. Malvinder Mohan Singh Total

10 1 1 1 4,025,123

0.00 0.00 0.00 0.00 100

Board of Directors The board of directors of IHL currently comprises Mr. Harpal Singh, Mr.Vinay Kaul, Mr. Shivinder Mohan Singh, Mr. Malvinder Mohan Singh and Mr. V.M. Bhutani. Financial Performance The audited financial results of IHL for Fiscal, 2004, 2005 and 2006 are set forth below: (Rs.millions, unless otherwise stated)
Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.) Book Value per share ( Rs.) 146.91 99.97 Fiscal 2005 149.05 (116.91) 301.91 (116.91) (79.12) 61.28 Fiscal 2006 504.73 (38.67) 402.51 (155.58) (12.70) 61.35

g.

Oscar Bio-Tech Private Limited (“OBPL”)

OBPL was incorporated on January 23, 1990 as a company engaged in the business of operating hospitals manufacturing and dealing in diagnostic reagents, surgical equipment, clinical kits/equipment, industrial/technical drugs, among other things. OBPL became our subsidiary on March 20, 2006, pursuant to the acquisition of 3,050,000 equity shares in OBPL constituting 99.99% of the paid up capital of OBPL. The equity shares of OBPL are not listed on any stock exchange. Shareholding Pattern The shareholding pattern of OBPL as of September 26, 2006, is as follows:
S. No. 1. 2. 3. 4. 5. 6. 7. Name of the Shareholders Fortis Healthcare Limited Fortis Healthcare Holding Limited as a nominee of FHL Malav Holding Private Limited as a nominee of FHL Shivi Holding Private Limited as a nominee of FHL International Hospital Limited as a nominee of FHL Mr. Shivinder Mohan Singh as a nominee of FHL Mr. Malvinder Mohan Singh as a nominee Number of equity shares of Rs. 10 each 44,999,900 50 10 10 10 10 10 Percentage of Shareholding (%) 99.99 0.00 0.00 0.00 0.00 0.00 0.00

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the Company has the sole option and right to increase its shareholding from 26% to 51% by acquiring an additional 25% stake in the equity share capital of the SMPL any time between the expiry of the second anniversary of the Sunrise Shareholders Agreement and before the end of the fifth anniversary of the Sunrise Shareholders Agreement (“Option Period”) at a price which is equivalent to the face value of the equity shares of SMPL in addition to an interest thereon at the rate of 12% p.27 1.of FHL Total 45.50 6. Umesh Talwar. 2005 whichever is earlier. Sumita Juneja. City Establishments Limited. Mr. 25.22 million which is outstanding). the principal loan amount would be immediately convertible into equity shares of SMPL aggregating to 21% of the paid up equity share capital of SMPL.000. Shashi K. calculated from the date of the Sunrise Shareholders Agreement hereof or the date of infusion of the first tranche of the loan. Ms. Anil Panwar and Mr.04 12.a. Beacon Sales Private Limited and Mr.) 105.88 450.61 10. Holdings Private Limited. S. Krinshaw Holdings Limited. Subsequently.73 3. upon receipt of a written notice from the Company. 28. representing 5% of the paid up share capital of SMPL.61 0.e September 1. Pursuant to the Sunrise Shareholders Agreement. NGP Industries Limited. Pentlow Investments and Holding Pte Limited. i. whichever is earlier.21 Fiscal 2006 63.17 1.05 30. Bhushan Chaddha (collectively called “Existing Shareholders”) and such agreement.95 12.B. the Company subscribed to 509. In the event SMPL does not receive the conversion notice by the expiry of two years. the “Shareholders Agreement”.51 5.50 6. Financial Performance The financial results of OBPL for Fiscal.T. Further. Rohan Talwar.) Book Value per share ( Rs.92 12. Pursuant to the terms of the shareholders agreement. Mr. the loan would automatically be converted into equity aggregating to 21% of the paid up share capital of SMPL.00 Board of Directors The board of directors of OBPL currently comprises Mr. Allied Mortgage Incorporated. Subash Chaddha. Daljit Singh. the Company has agreed to advance a loan to SMPL aggregating to Rs.909. 2004.000 100. the Company entered into a shareholders agreement dated January 3. Gyan Enterprises Private Limited. within a maximum period of two years from the date of Sunrise Shareholders Agreement or from the date of infusion of the first tranche of loan.19 Shareholders Agreement with Sunrise Medicare Private Limited and Others (“Sunrise Shareholders Agreement”) Pursuant to the terms of the share subscription agreement dated January 3.millions. Vinay Kaul. 2006.05 Fiscal 2005 110.00 8. Mr. unless otherwise stated) Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. 2006 with SMPL and Mr. Mr.84 30. Shantanu Roy Chowdhury. 2005 and 2006 are set forth below: (In Rs. Mr.366 equity shares of Sunrise Medicare Private Limited (“SMPL”).980 (including an amount of Rs. the Existing Shareholders undertake to do the following: 109 . Chaddha. In the event the above option is exercised by the Company.

The agreement may be terminated by the Company 110 . charge.• • Should SMPL require additional funds. management and marketing the services of the medical and healthcare facilities at the respective hospitals and clinics. New Delhi. 110 005. in the event the Company increases its shareholding to 51% as described above. Under the terms of the agreement. the parties shall be responsible for their respective compliance obligations under law pursuant to the agreement. it would offer the Existing Shareholders an option to participate in such new project on such terms as are communicated to the Existing Shareholders by us. Charitable Hospital. Operation and Management Agreements: The Company and its subsidiary OBPL and EHIRCL have entered into various exclusive operation and management (“O&M”) agreements with hospitals and clinics. the Company typically has the right to. encumber or dispose any of their shares in the SMPL for a period of five years from the effective date of the Sunrise Shareholders Agreement agreement. at any of its own hospitals or as a stand alone site. the Existing Shareholders have an option to sell their entire equity shareholding in SMPL to the Company within a period of one year from the date on which the Company acquires 51% equity stake in SMPL and the Company shall buy the same at the face value of the equity shares plus an interest of 12% p. the Company and the Existing Shareholders shall not take any action or pass any resolution in respect of certain specified matters unless such matter has been approved by the majority of the board. the management fee payable shall be reduced by an amount equivalent to such net cash loss. However.a. Further. mortgage. transfer. whichever is earlier. cause SMPL to make a preferential issue of such number of shares to the Company as will have the effect of increasing the equity stake of the Company in SMPL to 51%. The details of the O&M agreements are as follows: a. in the event the Company plans to start a similar high end facility exclusively for obseterics and gynaecology as the hospital currently has. The Company has entered into an exclusive O&M agreement dated October 29. manage the operations and infrastructure. inter alia. 2003 with Seth Jessa Ram and Bros. Under the terms of the Sunrise Shareholders Agreement. 15 per share and the Company shall buy the same within 30 days from the expiry of the Option Period subject to receipt of written notice from the Existing Shareholders. select and install new technologies. Karol Bagh. Pursuant to the terms of the O&M agreements. except in the manner provided for therein. sell and transfer such number of equity shares to the Company. appoint and terminate the services of employees and key persons and determine the usage of equipment and has the authority to make day to day decisions with respect to the O&M services. the Existing Shareholders shall have the option to sell their entire (not part) equity shareholding in SMPL to the Company at a price of Rs. Charitable Hospital Trust (“Jessa Ram Trust”) with respect to Fortis Jessa Ram and Bros. the affirmative vote of one nominee director representing the Existing Shareholders would also be required in respect of the specified matters. Further. in the event the audited accounts show a net cash loss. Upon the shareholding of the Company in SMPL increasing to 51%. calculated from the date of theSunrise Shareholders Agreement hereof or the date of infusion of the first tranche of the loan. the Existing Shareholders have agreed not to sell. pledge. or Should no additional funds be required by SMPL. The terms of our O&M contract provide that the Company is to receive a specified percentage of the hospital’s gross income less the amount of any cash loss at the hospital. In the event the Company does not exercise its option to increase its equity stake in SMPL to 51% within the Option Period. renewable for a further period of 20 years unless terminated in accordance with the agreement. which majority will include the affirmative vote of at least one Director of the Company with respect to specified items. to provide services for the operation. as will result in increasing the shareholding of the Company in SMPL to 51%. India for a period of 20 years. Notwithstanding the above lock-in provision.

In the event either party wishes to terminate the O&M agreement (“Terminating Party”) for reasons other than material breach. employee or professional consultant of the O&M Hospitals. b. the Company shall be entitled to claim from the other party an amount of Rs. New Delhi 110 048. breach of contract. The O&M agreement dated January 3. the O&M Hospital owners are responsible for all present and future investments and for all expenses (revenue and capital) in respect of the O&M Hospitals owners including all tax payments. goodwill. specialists or professionals in the course of rendering services at the applicable O&M Hospitals. strict liability in tort or otherwise. collectively the “O&M Hospitals”). including loss of profits. or loss or corruption of data. late delivery. the Company has entered into exclusive O&M agreements with Sunrise Medicare Private Limited. liabilities. Further. the O&M Hospital owners have undertaken that all approvals have been obtained from the appropriate governmental bodies for the operation and management of the respective hospitals and that they shall renew the same during the subsistence of the agreement. Further. in the event of termination of the agreement by the Company for the use of the Company’s intellectual property by the other party or its affiliates in violation of the terms of these agreements. pertaining to the operations of the respective hospitals and clinics. the Terminating Party may terminate the O&M agreement without further notice. or of anticipated savings or business. respectively. indirect. judgments. Further the O&M Hospital owners have the right and license to use the Fortis trademark with regard to the applicable O&M Hopsitals in the manner contemplated in the respective agreements. S 549. indemnify and hold Jessa Ram Trust harmless from any actual losses. liabilities. each of the O&M Hopsital owners has agreed to keep the Company indemnified from and against all claims. Further. Further. Jeewan Mala Hospital Private Limited and Khalil Public Welfare Trust (collectively the “O&M Hospital owners” concerning Fortis La Femme. settlements and expenses resulting from the breach by the Company of any representation or warranty contained in the O&M agreement for a period of three years from the date of the agreement. Under the terms of the O&M agreements. or relating to any failure to supply or delay in supplying the services contemplated under the O&M agreement. the Company has agreed to defend. costs and charges incurred by the Company which may be filed by any person.by providing three months written notice to Jessa Ram Trust. Further. either party to the agreement may terminate the agreement upon material breach of any obligation under the agreement. and a percentage of child and birth- 111 . Addtional provisions of the O&M agreements are as follows: i. the Terminating Party shall at first instance approach the other party to resolve the reason for the proposed termination. The terms of our O&M contract provide that we are to receive a percentage of gross income relating to all child and birth-related services if a target threshold of monthly income is met. or incidental loss. In the event the parties are unable to resolve the issue within the period contemplated in the relevant O&M agreement. indemnify and hold the other party harmless from any losses. business opportunities. Jeewan Mala Hospital and Khyber Medical Institute. suits. or of any undertakings or obligations contained in the respective O&M agreements. the procedures and treatments that cannot be performed at the applicable O&M Hospitals shall be referred to the Company and our affiliates. negligence. India and Apollo Clinic in Faridabad is valid for a period of 10 years and renewable for a further period of five years. under the respective O&M agreements. settlements and expenses arising out of any breach by the defaulting party of any representation and warranty. Additionally. Under the terms of these agreements. Further. 2006 with Sunrise Medicare Private Limited (“SMPL”) for Fortis La Femme. judgments. neither party is liable to the other for any consequential. Greater Kailash II. each party to the respective agreements has agreed to defend. Additionally. whether arising out of claims for breach of warranty. 5 million as liquidated damages. against the Company or our Directors in any court in respect of any act of negligence or omission on the part of the doctors. proceedings.

India. goodwill and reputation caused by any act of the Dhall Society. JNM Memorial College. financial and/or criminal liability arising out of any financial. EHIRCL has entered into an agreement dated August 29. New Delhi 110 005. The terms of our O&M contract provide that in addition to reimbursement for all expenses incurred by the Company. manage and operate a heart command centre within the premises located at the campus of Pt. 1860 to develop. . All profits and 112 d. The Dhall Society shall not be financially liable towards any civil or criminal liability of OBPL to any third party. depreciation and amortization. 1998. India. Further. is valid for a period of 10 years and renewable for a further period of five years. Rajan Dhall Charitable Trust (“Dhall Society”) and Vaitalik. 2002. fees for services rendered and medicines. Lt. without any limitation. even if it is for the purpose of managing the hospital and OBPL shall indemnify the Dhall Society from any financial or civil liability fastened on the Dhall Society as a result of its activity. c. manage and run this hospital.related gross income less the professional fees paid to non-full-time doctors if the target is not met. a registered societies formed under the Societies Registration Act. Accordingly OBPL has the absolute right to provide services to develop. Pursuant to this agreement. Lt. 2005 with Flt. New Delhi 110 070. Chhattisgarh. managing. Further. The O&M agreement dated October 31. Under the terms of the agreement. Under the terms of this agreement. has entered into an agreement dated May 12. India. 350 million and assumed all of its rights and obligations of building. 2005 with Jeewan Mala Hospital Private Limited (“Jeewan Mala”) for Jeewan Mala Hospital. 2006 with Khalil Public Welfare Trust (“KPWT”) for Khyber Medical Institute. 190 001. Raipur. Under the terms of our O&M contract. our subsidiary. Under the terms of the agreement. Khayam Chowk. food and other materials supplied to patients. 67/1. manage. renewable by mutual consent of the parties for a further period of five years. Pocket 1. the Government of Chhattisgarh. group companies or holding companies. pursuant to which the Government of Chhattisgarh has granted EHIRCL the right and licence to establish. the Dhall Society is to repay the entire amount spent by OBPL in developing the hospital including the amount paid by OBPL to Vaitalik along with an interest of 12% per annum and also deliver all goods. we are entitled to a significant share of the hospital’s operating profits. EHIRCL is entitled to bill and collect in EHIRCL’s name. However. the Dhall Society shall be liable to OBPL for loss and damages towards its investments. the parties have the right to determine and terminate the agreement only upon breach of any obligation by any of the parties. maintaining and running this hospital under an earlier agreement dated August 7. tax. which it may have with any third party. Srinagar. contractual or other dealing. through its associates. OBPL. with the Government of Chhattisgarh. equipment. for a period of five years. iii. Rajan Dhall Hospital situated at Sector B. Aruna Asaf Ali Marg. New Rohtak Road. is valid for a period of 10 years and renewable for a further period of five years. The terms of our O&M contract provide that we are to receive a specified percentage of the hospital’s gross income plus a specified percentage of the hospital’s profit before interest. ii. OBPL is responsible and liable for any civil. the Government of Chhattisgarh has agreed to provide all medical equipment and supporting infrastructure at its cost. fixation of schedule/tariffs by. or any other interference from. The O&M agreement dated January 28. the Company is also entitled to receive a specified percentage of the hospital’s gross income above a target threshold. and EHIRCL has agreed to manage and operate the heart command centre. upon termination of the agreement or if the agreement is declared unenforceable or if the rights of OBPL to run the hospital cannot be exercised. properties and assets in use in the hsopital to OBPL. and we are currently earning fees under this contract. OBPL has paid Vaitalik an amount of Rs. maintain and operate Fortis Flt. Nowpora.

losses from the management and operation of the heart command centre shall be to the account of EHIRCL. however. The Government of Chhattisgarh has deposited an amount of Rs. capital expenditure and working capital requirements of the heart command centre. EHIRCL has also undertaken to make available without charge. Under the terms of the agreement. Under the terms of the agreement. shall be borne either by the Government of Chhattisgarh. including for the renovation. as the Government of Chhattisgarh may specify in each particular case. 15% of the beds at this heart command centre to patients who are below the poverty line. either party may terminate the agreement by giving six month’s notice in writing to the other party. EHIRCL has assumed the responsibility for maintaining the quality and standard of service at the heart command centre. The costs of each such patient’s medicines. consumables and disposables. 55 million in a separate bank account for the implementation of the project. and have been referred by the Government of Chhattisgarh. or the patient himself. and for any and all legal actions instituted or claims made in relation to services rendered at the heart command centre. Strategic Partners 113 .

Escorts Hospital and Research Centre Limited. Ranbaxy Holding Company. Religare Enterprises Limited. New Delhi 110 038. Ranbaxy Portugal. The following table sets out the current details regarding the Board of Directors: Name. Fortis Financial Services Limited. . and Fortis Clinical Research Limited. Escorts Heart Centre Limited. Late Mr. Ranbaxy Inc. Religare Securities Limited. Western Green Farms. India. Fortis Financial Services Limited. Malav Holdings Private Limited. India. Late Dr. Malvinder Mohan Singh S/o.A. Anand Niketan. SRL Ranbaxy Limited. • • • • • • • • • Mr. Ranbaxy Laboratories Limited. Rajokri. Ranbaxy Laboratories Limited. International Hospital Limited. Harpal Singh S/o. The Company currently has 12 Directors. Designation and Occupation Mr.. Basics GMBH.OUR MANAGEMENT Board of Directors Under the Articles of Association the Company is required to have not less than three Directors and not more than 12 Directors. New Delhi 110 021. A-1 Book Company Private Limited. Shimal Research Laboratories Limited. Parvinder Singh Designation: Non-Executive Director Occupation: Executive Business 34 Vistas 26. International Hospital Limited. Escorts Heart Institute and Research Centre Limited. Fortis Healthcare Holdings Limited.P. Ranbaxy Hungary Pharmaceuticals KFT. Escorts Heart and Super Speciality Hospital Limited. Maulsari Avenue. Oscar Investments Limited. Religare Commodities Limited. Religare Securities Limited. Chetak Pharmaceuticals Private Limited. Escorts Heart Institute and Research Centre Limited. Luxury Farms Private Limited. • • • • • • • • • • • • • • • • • • • • • • • • • 114 Other Directorships SRL Ranbaxy Limited. Fortis Clinical Research Limited. Vistas Realtors Private Limited. Father’s Name. Escorts Hospital and Research Centre Limited. Ranbaxy Italia S. Hardayal Singh Designation: Chairman Occupation: Executive Sardar Executive Business Age (years) 57 Address B-10.

Late Mr. Oscar Investments Limited. Religare Securities Limited. Oscar Investments Limited. Ranbaxy (Guangzhou China) Limited.. Parvinder Singh Designation: Director Occupation: Executive Managing Business 31 1. New Delhi 110027. A–1 Book Company Private Limited. R.L. Alpana Properties Private Limited. Shimal Research Laboratories Limited. Fortis HealthWorld Private Limited. Liquid Investment and Financial Services India Private Limited. Fortis Financial Services Limited. Father’s Name. RC Nursery Private Limited. Ranbaxy Laboratories Limited. Bhutani S/o. Chetak Pharmaceuticals Private Limited. Religare Commodities Limited. Ranbaxy Holding Company. Escorts Heart and Super Speciality Hospital Limited. Escorts Hospital and Research Centre Limited. Limited. V. Ranbaxy Australia Proprietary Limited. Ranbaxy Healthcare Private Limited. Escorts Heart Centre Limited.C. Fortis Healthcare Holdings Limited. Fortis HealthStaff Private Limited. Shivaji Enclave. Fortis Clinical Research Limited. SRL Ranbaxy Limited. Bhutani Fiscal Management Limited. C. International Hospital Limited. India • • • • • • • • • • • • • • • • • • • • • • • Mr. and Checon Shivalik Contact Solutions Private Limited. India • • • • • • • • • • • • 115 . Designation and Occupation Age (years) Address • • • • • Other Directorships Ranbaxy (Netherlands) B. Late Dr. Nursery Private Limited.M. A-1 Book Company Private Limited. Shivinder Mohan Singh S/o. Ranbaxy Pharmacie Generiques. and Ranbaxy Mexico Limited. Ranbaxy Healthcare Private Limited. Religare Enterprises Limited. Nihon Pharmaceuticals Industry Co. Escorts Heart Institute and Research Centre Limited. Greenview Buildtech Private Limited. Southend Lane. New Delhi 110011.Name.V. and Federation of Indian Chambers of Commerce and Industry. International Hospital Limited. Fortis Healthcare Holdings Limited. Bhutani Designation: Director Occupation: Accountant Independent Chartered 60 GC -6. • Mr. Ranbaxy Holding Company.

New Delhi 110 070. Occupation: Former Chief Justice. Ranbaxy Laboratories Limited. Jorbagh. Gurcharan Das S/o Mr.R. Religare Enterprises Limited. Hauz Khas.S. Late Mr.51. Religare Securities Limited. Singh Kashyap 63 House No. Oscar Bio-Tech Private Limited. Religare Commodities Limited. New Delhi 110003. Ranbaxy Holding Company. IDBI Capital Market Services Limited. • Occupation: Service Mr. Designation and Occupation Mr.131. Karam Singh Sodhi Designation: Director Independent 73 House No. Chandigarh 160 116 Nil . India • • • • • • • • • • • • • • • • • • • Other Directorships Ranbaxy Laboratories Limited. 8202 and 8204. Mastek Limited. Rajan Kashyap S/o. • • • • • • • • • • Justice S. Fortis Clinical Research Limited. Barkat Ram Designation: Director Occupation: consultant Independent Author and 63 124. Fidelity Trustee Company Private Limited.Name. SKS Microfinance Private Limited. International Hospital Limited. and Ranbaxy Laboratories Limited. Sector 10. Adige Designation: Director Independent 56 C-12. Malav Holdings Private Limited. Father’s Name.N. Mr. Late Mr. Fortis Financial Services Limited. India. Religare Finvest Limited. Vinay Kaul S/o. First Floor. Adige S/o. Escorts Heart and Super Speciality Hospital Limited. Sector-9. Sodhi S/o. Oscar Investments Limited. M. India. L. Ramesh L. Chandigarh 160 009. Luxury Farms Private Limited. Vasant Kunj. M. Mr. New Delhi 110 016. Late Mr. India. Berger Paints India Limited. Fortis Healthcare Holdings Limited. SRL Ranbaxy Limited.K. Allahabad High Court Mr. Gurcharan Das Consultants Private Limited. Escorts Hospital and Research Centre Limited. Crest Communications Limited. Birla Sun Life Trustee Company Private Limited. and Escorts Heart Centre Limited. ANR Securities Private Limited. Kaul Designation: Director Occupation: Accountant Independent Chartered Age (years) 62 Address B-XI. Ankar Capital Private Limited.

A.S. Vil Chauki.S degree in Economics and a Master’s degree in public affairs from the University of California at Hayward. Hindustan Motors Limited. Harpal Singh. Further. Mr. P. London. England.A. Designation and Occupation Designation: Director Independent IAS Tidu Age (years) Address 009. SW10 9NR. Mr. U. Mahindra and Mahindra Limited and Shaw Wallace. Delhi and holds an MBA degree from the Fuqua School of Business.Dhaulas. Redcliffe Road. India. Father’s Name. Duke University.S. Harpal Singh has had diverse experience of over 30 years in the corporate sector and has held senior positions in various TATA group companies. He was also a member of the 8th India-UK Round Table. and is a member of the Senate of Baba Farid University of Health Sciences. Via Ganghora. graduated in Economics from St.Name. Malvinder Mohan Singh. and Fortis Financial Services Limited. Harpal Singh is presently a member of the Confederation of Indian Industries (“CII”) National Committee on Healthcare and the CII National Committee on Primary and Secondary education. Escorts Heart Centre Limited. Stephen’s College. S/o Mr. U. Mr. Faridkot. SBL Private Limited Occupation: Service Dr. Mr. 1999. Mr. • • Imperial Innovations Group Plc. (Hones. Escorts Heart and Super Speciality Hospital Limited. Dehradun 248 141. and InforSensense Limited. Punjab. Escorts Hospital and Research Centre Limited. Amar Nath Maini Designation: Director Independent Occupation: Service Lt. Malvinder Mohan Singh is the chief executive officer and managing director of Ranbaxy 117 . • • • • • Ranbaxy Laboratories Limited.S. He joined our Company on August 12. Beas. Stephen’s College. Joshi S/o Justice Mohinder Singh Joshi (Retired) Designation: Director Occupation: Professional Independent Medical 59 Maharaj Sawan Singh Charitable hospital. Delhi and holds a B. Amritsar. and Vice-Chairman of the CII Punjab State Council.A.) degree in economics from St. graduated with a B. Punjab 143 201. India. Yoginder Nath Maini 63 11. India. Harpal Singh has also been a member of several Government Committees and is presently a member of the Punjab Chief Minister’s Advisory Committee on Industrial Growth and Development of Relevant Infrastructure. Brief Profile of the Directors Mr. Rajinder Singh Designation: Director Independent 63 Godspalm. Harpal Singh is on the board of the Doon School and the Shriram School. Other Directorships Occupation: Retired Officer Dr. General Tejinder Singh Shergill S/o Late Mr. one of the Promoters. Executive Chairman of the Company. Mr.

Adige graduated with honours in Bachelor of Engineering from BITS.S. He is closely associated with RLL and its promoters and serves on the Boards of Directors of Ranbaxy Holding Company. Mr. commercial taxation. (Hons. Vinay Kaul graduated with a B. He joined our Company on June 29. Kaul is a retired Executive Vice President-Finance and Corporate Services and Member of the Board of Directors of Ranbaxy Laboratories Limited. Malvinder Mohan Singh joined Ranbaxy Laboratories Limited in 1998 and worked through various functions of general management. Stephen’s College. Duke University. Bhutani is a member of The Institute of Chartered Accountants of India. University of Delhi. He is RLL’s representative in the Executive Committee of the Indian Pharmaceutical Alliance and an active participant in the Confederation of Indian Industry (“CII”). Malvinder Mohan Singh is a member of the Young Global Leaders Forum.A. Amritsar and Fortis Hospital. Research and Development. 2000. Mr. He held the position of Chief Operating Officer of the Fortis Hospital. he has been responsible for the completion of the construction of a Fortis Hospital. he was responsible for RLL’s global operations. as President Pharmaceuticals. Further. Mohali for two years. Noida. Bhutani graduated with an honors degree in Commerce from Delhi University. Gurcharan Das graduated with honours in Bachelor of Arts cum laude in Philosophy and Government from Harvard University and holds an MBA degree from Harvard Business School.) degree in mathematics from St. Plain and has a post graduate degree from the Faculty of Management Studies. Mr. Malvinder Mohan Singh is also a member of the National Council for the CII and is co-chairman of the CII National Committee on Intellectual Property Rights. U. He has an experience of over 37 years in the field of Finance.S. Shivinder Mohan Singh. and public affairs. Mr. Ramesh L. during which he led his team in developing a strong work culture. with a super-specialty focus on cardiac sciences and Fortis Hospital. strategic and perspective planning and external relations.Sc. Mr. Mr. finance and business development. Mr. Mr.Laboratories Limited. Mr. Duke University. Harvard University. Technology and Innovation. He is a member of the Advisory Committee on Mutual Fund of SEBI. He held the position of the Chief Executive Officer.A. Das is an author and a management consultant and advises a number of companies on global corporate strategy. V. Adige heads the corporate affairs team at RLL and works in the area of corporate policy. sales and marketing. Federation of Indian Chambers of Commerce and Industry and Premier Industry Chambers of India. legal and corporate matters. public policy. Mr. M. which is an initiative of the World Economic Forum. Subsequently. Mr. Noida. SRL Ranbaxy Limited and several other promoter group companies. He has over 29 years of experience with expertise in the field of marketing. Singh is on the board of directors of RLL. He has also led the acquisition of EHIRCL. Banking. (Hons. Delhi and holds an MBA degree with specialization in health sector management from the Fuqua School of Business. He was with Fiat India Limited as a whole-time Director (Corporate Affairs) and has been the President of the Governing Council of the Automotive Research Association of India.) degree in Physics from Rajas College at Delhi University. Singh has led us in setting up and running a state of the art hospital at Mohali. He has also been an executive committee member of the Society of Indian Automobile Manufacturers of India. 118 . He has also served a member of various boards and a committee related to the automobile industry and is a member of the Development Council for Automobile and Allied Industries of the Government of India. Mr. fellow of Aspens India Leadership Initiative and board of visitors of Fuqua School of Business. Mr. He is a Fellow Member of the Institute of Chartered Accountants of India. He was the Chief Accounts Officer of the Bhaskar Group of Industries and the controller of Taxation of Ranbaxy Laboratories Limited. the Managing Director and a Promoter of the Company. having over 28 years of experience in finance. U. Taxation and Capital Markets. graduated with a B. Prior to being appointed as chief executive officer and managing director of Ranbaxy Laboratories Limited. Fortis Healthcare Limited. as the Director of Projects of the Company.A. Mr.

119 . Further. He holds a PhD and BSc in Engineering from Imperial College and was a Post Doctoral Fellow of the University of California Berkeley. Justice S. Maini’s other board memberships include the Joint Advisory Board of Texas A & M Qatar University. he has been decorated for gallantry during his years in the military. Asia and the Middle East. Yoginder Nath Tidu Maini graduated with a B. He served on juries of the Mc Kinsey award for the best Harvard Review Article for 2005 and $500. United Kingdom. and chairman and managing director of Richardson Hindustan Limited from 1981 until 1985.S. Director. (Hons. Sodhi graduated with a B. Dr. Additionally. where he is responsible for technology transfer.S. Rajan Kashyap graduated with the first position in M. Justice S. Justice S. he has been a practicing advocate at the High Court of Punjab and Haryana for 10 years and a Member of the Punjab Superior Judicial Service. Main Board Member of Sema Group plc. He has 40 years of experience in the military and has experience in teaching assignments and as a diplomat. India. including the Foreign Investment Promotion Council in India.S.K. he was Senior Vice President of Schlumberger Inc. Maini has over 30 years of experience in managing technology companies across Europe. Lt. and during his various appointments with the Punjab Government he promoted the adoption of various forms of public-private partnership. Maini is also advisor to the Mubadala Development Company. Mr. U. in English from Punjab University. He has served as the managing director of the Punjab State Co-operative Supply and Marketing Federation Limited. London. He is a regular columnist for the Times of India and the Dainik Bhaskar and he contributes occasional articles to the Wall Street Journal and other newspapers. Sodhi has also held the positions of Registrar (Research) at the Supreme Court of India.Sc. the United States. senior command wing of Jammu and Kashmir. and has a Masters of Philosophy degree in Development Economics from the University of Cambridge. India. London. He was also the ex-general officer commanding in North East India and excommander.A and is an operating advisor and investor in Chrys Capital LLC. Justice S. Prior to joining Imperial College.A. Dr.Procter and Gamble India from 1985 to 1992. Additionally Dr. the India-U. He was also appointed the Chairman of the Punjab Public Service Commission. He is pro rector of the Imperial College in London. Deputy Chairman GEC Marconi and Managing Director of GEC Software Systems. where he was awarded the President’s Gold Medal and has two masters’ degrees from the University of Madras and the United States Command and General Staff College. S. Sodhi has been a Judge of the High Court of Punjab and Haryana. Further.D. Centre of Leadership Excellence of the Indian School of Petroleum and member of the board of SBL Private Limited. Dr Maini is a also a member of the International Advisory Board of Thorium Power in the US. Tejinder Singh Shergill graduated with a M. Chandigarh. He has a PhD and BSc in Engineering from Imperial College and was a Post Doctoral Fellow of the University of California Berkeley. and is currently a member of the board of governors of the University of Petroleum and Energy Studies. United Arab Emirates. in Engineering from the Imperial College. He has over 30 years of experience working in six countries.000 Milton Friedman Prize. Mr. Dr. Khadakwasla. Chief Justice of the High Court of Allahabad and an ombudsman.) degree in economics from Punjab University and is a Barrister at Law from Lincolns Inn.) degree and holds an ACGI. Roundtable and the Advisory Board of CSC Europe.A. He has been a member of the Indian Administrative Service for 38 years and the Chief Secretary to the Government of Punjab. Sodhi was the Chairperson of the Telecom Regulatory Authority of India from 1997 until2000. (Hons. Gen.Sc. Legal Remembrancer to the Government of Punjab and Registrar of the High Court of Punjab and Haryana. He has also served in the Ministry of Home Affairs. He is also a Board Member of the Emirates Foundation chaired by His Highness the Crown Prince of Abu Dhabi and Chairman of the London 2012 Olympic Technology Board. Kansas. He is also the author of the “India Unbound”. He is on a number of boards including RLL and Citibank N. Das has served on several government boards.A. DIC and a Ph. in Defence Studies from the National Defence Academy. He was also the Principal Secretary to the Government of Punjab.S. consulting services and strategic business alliances.

M. 1999 Up to September 30. Harpal Singh under the terms of the Board resolution dated September 23. 2008. Medical Superintendent of Kidarnath Charitable Clinic and Laboratories.D (Cardiology and General Medicine) from Maulana Azad Medical College. 2006. Delhi. 2001 Liable to retire by rotation. Bhutani July 28. provided that the money or monies to be borrowed together with the monies already borrowed by the Company (apart from the temporary loans obtained from the Company’s bankers in the ordinary course of business) shall not exceed. Details of Remuneration of the Directors Mr. General Tejinder Singh April 21.S. Charitable Hospital. 1999 Liable to retire by rotation. He is also known for the pioneering work in the field of cardiology. V. United Kingdom. 200. 2006. 2006.S. 15. Lt. Mr. 2005 Liable to retire by rotation. Malvinder Mohan Singh August 12. petrol reimbursement and drivers salary per month. Registrar of Cardiology in the University Hospital of Wales and a consultant cardiologist and physician for various other hospitals. Mr. * Appointed as the Executive Chairman pursuant to Board resolution dated March 31. ** Appointed as the Managing Director pursuant to Board resolution dated February 10.R.S. Mr. leave travel allowance. Gurcharan Das June 29. Chandigarh and an M.000 million. 120 . 2000 Liable to retire by rotation. Medical reimbursement. 2004 Liable to retire by rotation. Justice S. 2005 passed by the shareholders of the Company in accordance with provisions of the Companies Act. 2005 for a period of three years. at any time. 2005. P. and Director for Escorts Heart Disease Prevention Programme and Research activity for EHIRCL. Vinay Kaul June 29.S degree from Medical College. Shivinder Mohan Singh** June 29. a sum of Rs. 2000 Liable to retire by rotation.Dr. Yoginder Nath Tidu Maini August 4. 2005 Liable to retire by rotation. Joshi July 28. Ramesh L. Mr.P degree from the Royal College of Physicians.000 per month House rent allowance. He is on the board of directors of Ranbaxy Laboratories Limited and the Director and Head of Department of medicine and cardiology in Maharaj Sawan Singh. Mr. 1998 Liable to retire by rotation. the Board has been authorised to borrow sums of money for the purpose of the Company upon such terms and conditions as the Board of Directors may think fit. Details of Appointment of the Directors Name of Directors Date of Resolution Term Mr.B. with effect from October 1. Mr. 2000 Up to November 12.B. He is also accredited with a M. P. Adige January 10. Mr. medical director for the Chief Division of Cardiology and Internal Medicine in Escorts Medical Centre. 2005 Liable to retire by rotation. Harpal Singh* August 12. is as follows: Salary: Perquisites: Rs. annual performance bonus and hard furnishing. Shergill Dr.C. He was the medical advisor for Escorts Medical Centre Escorts Employees Welfare Trust. Mr. 1998 Liable to retire by rotation. Rajan Kashyap April 21. He was the Project Director of Birla Centre for Medical Research. Harpal Singh The remuneration payable to Mr. Beas. Joshi graduated with a M. Borrowing Powers of the Directors in the Company Pursuant to a resolution dated August 29. Sodhi May 21.

half yearly. including appointment of independent Directors and constitution of the following committees of the Board: Committees of the Board of Directors Audit Committee: The Audit Committee comprises Mr. minimum guaranteed bonus. Mr.Company maintained car. The Audit Committee further reviews the internal control systems with the auditors. as authorised by Board resolution dated September 16. Shivinder Mohan Singh The remuneration payable to Mr. quarterly and annual financial results.S. The Company pays its non-whole time Directors sitting fees of Rs. with effect from November 13. 2003 for a period of three years. is as follows: Salary: Perquisites: Rs. leave travel allowance. and Rs. Except the whole time Directors who are entitled to statutory benefits upon termination of their employment in the Company. Vinay Kaul. Joshi. The Audit Committee oversees the Company’s financial reporting process and disclosure of its financial information. V. Corporate Governance Corporate governance is administered through the Board and the committees of the Board.M Bhutani and Lt. Dr. telephones. Mr. Company maintained car. P. encashment of leave. considers and discusses observations of the statutory and internal auditors.000 for every meeting of our audit committee. Shivinder Mohan Singh under the terms of the Board resolution dated October 23. we will be required to enter into listing agreements with the Stock Exchanges. hospitalisation and personal accident insurance. Company’s contribution to provident fund and payment of gratuity. Chairman. Mr Harpal Singh. annual performance bonus and hard furnishing. telephones. 2003. hospitalisation and personal accident insurance. 121 . investigates any matter referred to it by the Board and reports to the Board on its recommendations on areas for attention. The Company is in compliance with the applicable provisions of listing agreements pertaining to corporate governance. investor grievance securities allotment and share transfer committee. medical reimbursement. In connection with the listing of the Equity Shares. Company’s contribution to provident fund and payment of gratuity.S. 10. primary responsibility for upholding high standards of corporate governance and providing necessary disclosures within the framework of legal provisions and institutional conventions with commitment to enhance shareholders’ value vests with the Board. Shergill. 2003. General T. no other Director is entitled to any benefit upon termination of their employment with the Company.000 for every meeting of its Board. encashment of leave. 100. remuneration committee and other committees of the Board. 15. However. House rent allowance.000 per month.

Mr. including the Managing Directors. shareholder and investor complaints. such other committees. and future plans. Harpal Singh. Vinay Kaul.000 25. Harpal Singh is the Chairman of the Management Committee. Gurcharan Das Mr. Mr.S. Dr.102 10. Vinay Kaul is the Chairman of the Remuneration Committee. Other Committees: In addition. Justice S. The Remuneration Committee has been constituted to determine the Company’s policy on specific remuneration packages for managerial personnel. pursuant to the Issue. V.Issue) 50.394 6. Yoginder Nath Tidu Maini. Ramesh L. Gurcharan Das.M. non. Mr. as may be required. P. Mr. Shivinder Mohan Singh.Shareholders/Investors’ Grievance Committee The Shareholders/Investors’ Grievance Committee currently comprises of Mr. Management Committee The Management Committee currently comprises Mr. from time to time. Shareholding of Directors in the Company The Articles of Association do not require our Directors to hold any qualification Shares. Gurcharan Das.003 6. The Remuneration Committee has been constituted in accordance with Schedule XIII of the Companies Act and Clause 49 of the listing agreement. Joshi Number of Equity Shares (Pre. Rajan Kashyap. Harpal Singh.receipt of annual reports and other shareholder issues. Sodhi and Dr. Mr. Bhutani Mr. Harpal Singh Mr. Mr. members. Vinay Kaul Mr. for efficient functioning and smooth operations of the Company. All of the Directors may also be deemed to be interested 122 . Chairman. trusts in which they are interested as directors. Remuneration Committee The Remuneration Committee currently comprises Mr.S.394 103 5. Vinay Kaul. Mr. The following table details the shareholding of the Directors: Interest of the Directors Name of Directors Mr. Joshi and Mr. Mr. Whole Time Directors. trustees and promoters. non-receipt of declared dividends. Shivinder Mohan Singh. The Management Committee overseas the working of the Company in relation to reviewing business strategies. issue of duplicate share certificates.000 The Directors are interested in the Equity Shares held by them or that may be subscribed by or allotted to Company’s firms. Vinay Kaul. partners. the Board constitutes. Malvinder Mohan Singh Mr. The Shareholders/Investors’ Grievance Committee has been constituted to address inter alia. P. Shivinder Mohan Singh Mr.S. Adige and Mr. The Management Committee further reviews the revenue and capital budget of the Company and its recommendation to the Board for approval. policies. and Executive Chairman.

2004 Reason for Change Resignation Appointment Appointment Appointment Appointment 123 . 2. The Directors do not have any interest in any property acquired by the Company within two years of the date of this Draft Red Herring Prospectus. if any. No. 2005 August 4. 1. Yogindra Nath Tidu Maini Date of Appointment September 29. Rajan Kashyap Lt. 2003 January 10. Gen. 2005 April 21. Name of Director Mr. Tejinder Singh Shergill Dr. 3. payable to them for attending meetings of the Board or a committee thereof.K. to the extent of reimbursement of expenses payable to them under the Articles of Association as well as to the extent of commission payable to them as detailed in the section titled “Our Management – Details of Remuneration of our Directors” beginning on page [●] of this Draft Red Herring Prospectus. V. 5. 4.to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. 2004 April 21. All the Directors may be deemed to be interested to the extent of fees. Singhal Mr. Ramesh L. 2005 Date of Cessation January 10. Adige Mr. Changes in the Board of Directors during the last three years S.

Management Organisation Structure Chairman Managing Director President Finance Director Corporate Affairs Vice.President Centre for Community/ Initiatives CEO Chief ExecutiveProjects Executive DirectorEHIRCL Delhi Vice PresidentFocus Program EHRCL EHSSIL EHCL Chief Operating Officer. Lt. Rajan Dhall HospitalVasant Kunj Jeewan Mala Fortis La Femme 124 . Amritsar Fortis Flt. Mohali Regional Director Fortis Hospital. Fortis Hospital. Noida Jessa Ram South Delhi Medical Operations Group (MOG) Growth Quality PublicPrivate Partnership HR Finance IT Marketing Fortis Hospital.

He has over four years of experience in the healthcare industry. Prior to joining the Company in June 3. he was the Head of the Corporate Treasury and Financial Resources of Escorts Limited in the years 1986-2002.43 million in the Fiscal 2006. Mr. Harpal Singh Mr. Harpal Singh and Mr. Changes in our Key Managerial Employees during the last three years There have not been any changes in the key managerial employees of the Company during the last three years. our President. Mr. 8. For details relating to the profiles of Mr. officers or employees. Shivinder Mohan Singh Mr. New Delhi. He has worked with DCM Limited. 2002 he worked as the director of the human relations. Shivinder Mohan Singh.003 10. Daljit Singh Mr.Com degree from Punjab University and is a qualified chartered accountant with over 30 years of experience. Daljit Singh received a gross remuneration of Rs.Tech degree in chemical engineering from the Indian Institute of Technology. Mr. Employess Share Purchase and Stock Option Scheme The Company does not have any stock option scheme or stock purchase scheme for its employees. Daljit Singh. Harpal Singh and Mr. Panwar received a gross remuneration of 4.Brief Profile of our Directors” beginning on page [●] of this Draft Red Herring Prospectus.Key Managerial Employees In addition to Mr. Prior to joining the Company on September 16. Finance. communications. Payment or benefit to officers of the Company Except as stated otherwise in this Draft Red Herring Prospectus. 125 . external relations and Safety Health and Environment divisions of ICI India Limited for 30 years. has a B. has a B.394 5. Shareholding of the Key Managerial Employees None of the key managerial employees of the Company hold any Equity Shares. Britannia Industries Limited and Nikitasha India Private Limited.000 6. Shivinder Mohan Singh see the section titled “Our Management. He has over four years of experience in the healthcare industry. Anil Panwar. except as stated below: Name of Key Managerial Employee Mr. the following are the key managerial employees of the Company. our Chief Executive Officer. since the incorporation of the Company. Mr. All of our key managerial employees are permanent employees of the Company. no amount or benefit has been paid or given or is intended to be paid or given to any of the officers except the normal remuneration for services rendered as Directors. 2002.500 Number Preference Shares (PreIssue) Nil Nil Nil Nil Bonus or Profit Sharing Plan of the Key Managerial Employees There are no bonus or profit sharing plan for the key managerial employees of the Company. Anil Panwar Number of Equity Shares (Pre-Issue) 50.93 million in Fiscal 2006.

none of the beneficiaries of loans and advances and sundry debtors are related to the Directors.Except as stated in the section titled “Financial Statements .Related Party Transactions” beginning on page [●] of this Draft Red Herring Prospectus. 126 .

Singh has over six years of experience in the healthcare industry. Together with the individual promoters.OUR PROMOTERS AND PROMOTER GROUP Our Promoters The individual promoters are : a. Delhi and holds a masters degree in business administration from the Fuqua School of Business. Technology and Innovation. Singh is a member of the Young Global Leaders Forum. Mr. Stephen’s College.S. finance and business development. graduated with a B. Driving license number: P02052006139359. Mr. sales and marketing. graduated in Economics from St. the Managing Director and a Promoter of the Company. Further. (Hons. Voter ID Number: Not Available. (Passport Number: Z-1403006. Mr. Malvinder Mohan Singh. Prior to being appointed as chief executive officer and managing director.A. b. He joined RLL in 1998 and worked through various functions of general management. He has over eight years of experience in the pharmaceutical sector. PAN: AABPS2552G) one of our Promoters. as President Pharmaceuticals. Mr. Duke University. 34 years old.) degree in mathematics from St. The corporate promoter is: a. Mr. Delhi and holds an MBA degree with specialization in health sector management from the Faqua School of Business.S. he was responsible for RLL’s global operations.A. during which he led his team in developing a strong work culture. Singh is on the board of directors of RLL. Subsequently. U. Fortis Healthcare Holdings Limited. 31 years old. Driving license number: 93081197NDDUP. Mr. Duke University. U. with a super-specialty focus on cardiac sciences and Fortis Hospital. which is an initiative of the World Economic Forum.A. Singh is the chief executive officer and managing director of Ranbaxy Laboratories Limited. (Passport Number: E7095142. as the Director of Projects of the Company. Shivinder Mohan Singh. and Mr. fellow of Aspens India Leadership Initiative and board of visitors of Faqua School of Business. He held the position of Chief Operating Officer of the Fortis Hospital. Mr. Shivinder Mohan Singh. PAN: AAKPS4318M). Noida. Mohali for two years. he has been 127 . Stephen’s College. Research and Development. Duke University. Singh has led us in setting up and running a state of the art hospital at Mohali. Mr. Malvinder Mohan Singh. He is also a member of the National Council for the CII and is Co-Chairman of the CII National Committee on Intellectual Property Rights. Voter ID Number: Not Available. the “Promoters”.

is as follows: S. The equity shares of FHHL are not listed on any stock exchange.40) 23. 2.00 100.00 Board of Directors The board of directors of FHHL currently comprises Mr. V. 1.99% of the equity share capital of FHHL.04 Fiscal 2004 31. 3. Mr. At the time of incorporation. Patawari Mr. FHHL is promoted by Mr. 2001 as an investment company. Malvinder Mohan Singh.174.millions. Shareholding Pattern The shareholding pattern of FHHL as of September 26. Malav Holdings Private Limited and Shivi Hodlings Private Limited acquired 99.62) 23. Bhutani.00 0.350.M.) Book Value per share (Rs.700 100 100 100 100 100 100 2.27 (8. V.37) (3.00 0.56 (0. K. M.0 (1. S. Financial Performance The financial results of FHHL for Fiscal 2003.15) 9. Name of Shareholder Malav Holdings Private Limited Shivi Holdings Private Limited Mr.18 128 . Sunil Godhwani Total Number of equity shares of Rs.00 0.97) (0.) 4.34) (0.98) Fiscal 2005 26. the Takeover Code is not applicable to FHHL. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. Amritsar and Fortis Hospital.29 (1. No.34) 23. 10 each 1.50 (10. Subsequently. Malvinder Mohan Singh and Mr. Fortis Healthcare Holdings Limited (“FHHL”) FHHL was incorporated on December 27.174.700 1.50 (0. 4. Shivinder Mohan Singh.69) (16. Hemant Dhingra Mr. 6. Vinay Kaul and Mr.000 % of Issued Capital 49.99 0. 7. Bhutani Mr. 2006. 2006. He has also led the acquisition of EHIRCL. Sanjeev Singhal Mr. As FHHL is an unlisted company. Mr.58) 5. 5.00 0. 2004 and 2005 are set forth below: (In Rs. Noida. Chander Dang Mr. Shivinder Mohan Singh. 8.99 49. Ranbaxy Holding Company held a majority in FHHL.responsible for the completion of the contruction of a Fortis Hospital.00 0.

Japna Malvinder Singh. other than the Promoters named above. Malvinder Mohan Singh. Mr. Mr. c. g. Further. HUF’s and partnerships form a part of the Promoter Group. b.326. The Promoters confirm that they have no interest in any property acquired by the Company during the last two years from the date of filing of this Draft Red Herring Prospectus. The natural persons who are part of our Promoter Group (due to their relationship with our Promoters). h. Shivinder Mohan Singh and FHHL.394 Equity Shares. e. Connaught Place.940 Equity Shares. and 129 . including relatives of the Promoters. principal bank account number and the address of the RoC where it is registered are as follows: PAN Registration Number CIN Bank Account Address of the RoC AAACF6715A 16 024854 of 2001 U65993PB2001PLC24854 52205179246 at Standard Chartered Bank. registration number. Ms. Udayveer Parvinder Singh. Nimmi Singh. Shivinder Mohan Singh holds 6. Mr. bank account numbers and passport numbers of our Promoters will be submitted to the Stock Exchanges at the time of filing this Draft Red Herring Prospectus with the Stock Exchanges. Payment of benefits to the Promoters during the last two years Except as stated in the section titled “Financial Statements . Punjab. none of the Promoters. Aditi Shivinder Singh. Vivan Parvinder Singh. d. Mr. f. Registrar of Companies. have confirmed that they have not been detained as wilful defaulters by the RBI or any other governmental authority and there are no violations of securities laws committed by them in the past or are currently pending against them. there has been no payment of benefits to the Promoters during the last two years from the date of filing of this Draft Red Herring Prospectus. Additionally. New Delhi. Nanki Parvinder Singh Mr. companies. Interest in promotion of the Company The Company is promoted by Mr.The details of FHHL’s permanent account number. Ms. Ms. Nimrita Parvinder Singh. Promoter Group In addition to the Promoters named above. Mr. are as follows: a. Malvinder Mohan Singh holds 6. Himachal Pradesh and Chandigarh. the following natural persons.394 Equity Shares and FHHL holds 154. Anhad Parvinder Singh. Ms. the Promoters and Promoter Group entities. Other Confirmations The Company confirms that the details of the permanent account numbers. entities have been restrained from accessing the capital markets for any reasons by SEBI or any other authorities. Ms.Related Party Transactions” beginning on page [•] of this Draft Red Herring Prospectus.

g. b.71 1. Shivi Holdings Private Limited. j. Ranbaxy Holding Company. Malvinder Mohan Singh Mr.36 13. t. Nursery Private Limited. 11. Luxury Farms Private Limited. The partnership firms which are a part of our Promoter Group are as follows: a. c. Shareholding Pattern The shareholding pattern of FFSL as of September 26.999 2.539. h. Religare Commodities Limited. Malsh Healthcare. 10.22 0.000 2. a. Religare Enterprises Limited. Kabir Parvinder Singh. s.000 442. Religare Finvest Limited. 3. debentures and other securities. 7. Religare Securities Limited. Fortis Financial Services Limited.71 1.039. SRL Ranbaxy Limited.600 2. other than the Promoters named above. r.C.74 . R. 6. b.i. The companies which are a part of the Promoter Group. 5. f. Chetak Pharmaceuticals Private Limited. Vistas Realtors Private Limited. 2. k. Religare Insurance Broking Limited.650 353. Oscar Investments Limited. Fortis Financial Services Limited (“FFSL”) FFSL was incorporated on March 23. with its other objects being to engage in business of leasing and hiring moveable and immovable properties.300 130 % of Issued Capital (approximated) 23. and Greenview Buildtech Private Limited. are as follows: a. 1994 as an investment company. Fortis HealthStaff Private Limited.600 192. The equity shares of FFSL are listed on the BSE. 8. 4.40 2. n. e.13 10. etc. l. i. Mr.69 11. m. Fortis HealthWorld Private Limited.878. Malav Holdings Private Limited. 1. No. 10 each 6. stock. d. p. Shivinder Mohan Singh Vidyut Investments Limited Oscar Investments Limited Oscar Holding Private Limited Number of equity shares of Rs.37 1. and Oscar Traders. Name of Shareholder Ranbaxy Holding Company Oscar Pharmaceuticals Private Limited Modland Wears Private Limited Shivi Holdings Private Limited Malav Holdings Private Limited Abhineet Pesticides Private Limited Mr. 9. o.969.150 316.700 3.000 686.690.650 441.48 11. acquisition of shares. 2006 is as follows: S. Ranbaxy Laboratories Limited.65 1.

00 100. The objects of the issue were to augment resources to meet its planned growth. 2006. 13.000. Mr. Mr.15 0.04 0. 2006.489.000 5% convertible preference shares of Rs.55 per share on August 16. Information about Share Price The highest market price of the equity shares of FFSL during the six-month period ending September 15.356 25.819 3. by FFSL are normally attended and replied to within 7-10 days of receipt by the company. Delta Aromatics Private Limited Ms. Details of public issue/rights issue of capital in the last three years There has been no public/rights issue of capital by FFSL in the three years preceding the date of this Draft Red Herring Prospectus. if any.60 (287. The authorised capital of FFSL has in the last six months.M.60 (366.12. Mr.47 4.73 258. No projections were made in connection with the issue. Malvinder Mohan Singh. 2005 and 2006 are set forth below: (In Rs. Shivinder Mohan Singh.30 258.000 equity shares of Rs.91 . Nimmi Singh Ranbaxy Laboratories Limited Private Corporate Bodies Indian Public NRIs/OCBs FIIs Total 26.951 1.800 100 707. Bhutani. 15. 10 each and 26. unless otherwise stated) Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share 227.16 Fiscal 2006 262. 2006 on the BSE was Rs.000 equity shares of Rs.36 4.00 2. Vinay Kaul.60 (225. 17. Mr.700 11. 1995 to the public. There are no complaints currently pending against FFSL as of September 15. 10 each on February 16. 10 each to 47.12 258. strengthen its equity base and net worth and obtain listing with the stock exchanges.50) 0.40) 0.76 13.10 each.375 0. V. Harpal Singh.000 equity shares and 5. 68.15 per share on March 15.30 26. 18. 2006 and the lowest was Rs. 16. Promise v/s Performance FFSL issued 750.41 52. 40.00 Board of Directors The board of directors of FFSL currently comprises Mr.32) 2.04 131 Fiscal 2005 77.073.000 1.860.000.000 preference shares of Rs.000. Sunil Godhwani and Mr.10 0.250. Mechanism for redressal of investor grievance The investor complaints received. 14.millions. Mr. increased from 21. Umesh Kumar Khaitan. Financial Performance The financial results of FFSL for Fiscal 2004.

126.190. 6.301. 1978 as an investment company. 2004. 55. 1.849 2. Promise v/s Performance OIL issued 9. Bhutani. 2.00 Board of Directors The board of directors of OIL currently comprises Mr.41 4. Details of public issue/rights issue of capital in the last three years There has been no public/rights issue of capital by OIL in the three years preceding the date of this Draft Red Herring Prospectus.48 100.68 1. Name of Shareholder Ranbaxy Holding Company Malav Holdings Private Limited Shivi Holdings Private Limited Oscar Bio-Tech Private Limited Oscar Pharmaceuticals Private Limited Tripoli Investment and Trading Company Vitoba Cosmetics Private Limited Other Promoters and persons acting in concert holding less than 1% of the paid up capital Private Corporate Bodies Public Total Number of equity shares of Rs. Vinay Kaul and Mr. 148.720 on a rights basis to the shareholders of OIL on August 26. Aditi Shivinder Singh.04 12. 2006 is as follows: S.779 equity shares of Rs. 3.17) 1. Oscar Investments Limited (“OIL”) OIL was incorporated on January 25. The equity shares of OIL are listed on the BSE and the Delhi Stock Exchange Limited.160 2. Ms.000 555.(diluted) (Rs. 10 each and 2.95 3. V. 5.11) (4.886.41 3. 7. 70 each for cash at par aggregating to Rs.280.145. 4. There has been no change in capital structure of OIL in the last six months.M.596 unsecured zero coupon fully convertible debentures of Rs.304 709.) (1. 2006. Shivinder Mohan Singh.200 636.40 b. The objects of the issue were to increase OILs scale of operations and to augment its long term resources. 132 . 10 each 5.703 17. No projections were made in connection with the issue.620 % of Issued Capital 30.21 12. No. Japna Malvinder Singh.30 12. 9. Mr.000 337.10 per equity share on December 20. Ms.118.193.304 2. The last traded price of the equity share of OIL was Rs. 1996.144.000 3. Shareholding Pattern The shareholding pattern of OIL as of September 26. 8.41 18.100 243.10 1. Malvinder Mohan Singh. Mr. Information about Share Price There has been no trading in the equity shares of OIL during the six month period ending September 26. 10.) Book Value per share (Rs.

6.Mechanism for redressal of investor grievance OIL has appointed Intime Spectrum Registry Limited as its Registrar and Share Transfer Agent for redressing investor grievances. The complaints received.31 151. 1973 it changed its name to its present name.73 35. P. Subsequently on August 24. There are no complaints currently pending against OIL.44 172.44 Fiscal 2006 1.68 7. 1.03 8. Ranbaxy Laboratories Limited (“RLL”) RLL was incorporated on June 16. are normally attended replied to within 10 days of receipt by OIL. 4. Vinay Kaul.682.) Book Value per share (Rs. Insurance Companies FIIs NRIs/OCBs Public GDRs Total Number of Equity Shares of Rs. 5.431.454. Financial Performance The financial results of OIL for Fiscal.291.S. Mr.394.00 1.649 51. 5 each 102. Nimesh N.192.74 44.270.874 21. Shareholding Pattern The shareholding pattern of RLL as of June 30.212.43 4.18 64.598 77.68 125. 1970 it changed its name to “Ranbaxy Laboratories Private Limited”. Dr. Mr.844 6.millions.47 1.288 372.73 18. unless otherwise stated) Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. 133 .583. Vivek Bharat Ram. 2 3.525. 2004. 8. The GDR’s issued by RLL have been listed on the Luxembourg stock exchange.728.00 Board of Directors The board of directors of RLL currently comprises Mr.) 189. No.20 1.56 13.00 1. is as follows: S. Kampani.523 76.74 20. On September 27.53 5. Mr. 7. Name of Shareholder Ranbaxy Holding Company Oscar Investment Limited Other Promoters and persons acting in concert holding less than 1% of the paid up capital Mutual Fund and UTI Banks Financial Institutions.89 Fiscal 2005 202.510 10.654.954 17. 1966 it changed its name to “Ranbaxy Laboratories Limited” and on October 28.92 2.97 3. Gurcharan Das. 1961 under the name “Lepetit-Ranbaxy Laboratories Limited”.924 9. 2005 and 2006 are set forth below: (In Rs.06 172. Mr.80 597. Mr. 2006. Mr. Tejendra Khanna.991. RLL is engaged in the business of manufacturing and marketing of pharmaceuticals dosage forms bulk drugs and intermediaries.30 80.24 c. The equity shares of RLL are listed on the BSE and the NSE.82 100.80 445.533. Joshi. 9.164 % of Issued Capital 27. Vivek Mehra. if any.

) Book Value per share (Rs.706.00 1.00 635.00 3. 2004 55.025. 858.millions.150. Surendra Daulet Singh.090. 300 each for cash at par aggregating to Rs. Series 2.00) 244.000. 772.00 4.2574305 12% fully convertible debentures of Rs. RLL’s requirement of funds for capital expenditure in facilities for manufacture of drugs at Dewas and Paonta Sahib.00 4.) 48. and Series 3.00 1. 25.00 770.717.594. 300 each for cash at par aggregating to Rs.15 2.83 7.250.00 140.104.00 3.00 1.33 Financial year ending December 31.00 300.00 580.24 20. Mr.225. unless otherwise stated) Sales -Domestic -Exports -Interdivisional transfer Operating Surplus Interest Depreciation Profit before Tax Profit after Tax Fiscal 1994 Projection Actuals 7.00 1.000 12% fully convertible debentures of Rs.61 1.800.451.320.550.00 5. Shivinder Mohan Singh. Adige.645.556.552.750. Brian W. Tempest and Mr.84 6.4290507 15% secured non-convertible debentures of Rs. investments in joint ventures/subsidiaries and for working capital purposes.00 700.00 860.00 1.00 (37. Ramesh L.32 1.00 143.432.00 2. in part. 1993: • • • Series 1.00 480. The further objects of the issue were to finance.00 7.304.580.886.50 million with a warrant for each fully convertible debenture to the specified entities of the management group.00 480.00 1.03 65. Harpal Singh.00 2.500. Himachal Pradesh and an research and development centre at Gurgoan.00 (273. 2005 53.900.00 Fiscal 1995 Projection Actuals 8. Mr. Mr.218.Ravi Mehrotra.00 2.350.85.21 22.00 229.49 18.00 134 1.00 952. A comparison of the projections made in the letter of offer along with the actual performance is as follows: (In Rs.44 19. Malvinder Mohan Singh.00 6.00 786.00 620.00 .30 million to the equity shareholders and employees of RLL. in part.00 210.10 million with a warrant for each non-convertible debenture to the equity shareholders and employees of RLL.00) 184.780.79 67.00 1.00 240.43 57.121.104.500.00 4.00 795. 200 each for cash at par aggregating to Rs. 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. Mr.00 170.019.07 1.917. Dr. One of the objects of the issue was to finance.320.858.00 340. unless otherwise stated) Financial year ending December 31. employees and specified entities of the management group on November 6.00 1.300.00 4.00 3.00 654.855. 2004 and 2005 are set forth below: (In Rs.710.89 Financial year ending December 31.69 Promise v/s Performance RLL made an issue of three simultaneous but linked offers to equity shareholders.00 3.00 1.862.00 9.985.617.91 23.00 1. Financial Performance The financial results of RLL for financial year ending December 31.03 7. 2003.00 1585. Haryana.605.00 Fiscal 1996 Projection Actuals 10.millions.

No. There five complaints currently pending against RLL as on August 30. d.490 3.) -Book Value (Rs.00 1. There has been no change in the capital structure of RLL in the last six months. 10 each 361.00 26.Dividend Equity Shares Capital Reserves and Surplus Per Equity Share: -Earnings (Rs.00 200.477.63 1. 2006 is as follows: S. 2006 on the BSE was Rs. The equity shares of MHPL are not listed in any stock exchange. 530. Japna Malvinder Singh. 10 each and 3.00 57.57 133.26 75.586. 1981 as an investment company under the name “Montari Containers Private Limited”. except in case of disputes over facts or other legal contraints. MHPL has issued 12.00 30. Malvinder Mohan Singh.00 0.00 444. if any. 317.00 347.20 13.76 380.00 per share on May 2.000 10% non cumulative redeemable preference shares (non voting) of Rs. Vinay Kaul and Mr.09 0.00 7. by RLL are normally attended and replied to within 15 days of receipt by the company.00 430. 3.13 2. 135 .000 A equity shares (non voting) of Rs. 2006.11 Information about Share Price There highest market price of the equity shares of RLL during the six month period ending August 30.10 2.770.48 200. Name of Shareholder Mr.666. Mr.850.44 0.00 18.50 1.26 13. 1.40 18.010 5.86 12. Rana Ranbir Singh Grewal.00 0. on January 27. 2006 and the lowest was Rs.00 on July 17. 2000 it changed its name to its present name. Japna Malvinder Singh Mr.83 353.00 0. 4.00 149.00 6.657.10 3044. Board of Directors The board of directors of MHPL currently comprises Mr.58 54.79 100.000.42 90.40 15.000 380.87 0. 10 each.30 380.37 237. Malvinder Mohan Singh and Ms. 2006. Details of public issue/rights issue of capital in the last three years There has been no public/rights issue of capital by RLL in the three years preceding the date of this Draft Red Herring Prospectus.500 10.00 * In addition. Shareholding Pattern The shareholding pattern of MHPL as of September 26. Malav Holdings Private Limited (“MHPL”) MHPL was incorporated on December 14.) Term Debt: Equity 11. Ms. 2. Shivinder Mohan Singh Abhineet Pesticides Private Limited Total Number of equity shares of Rs. Subsequently. Mechanism for redressal of investor grievance Investor complaints and grievences received.000 % of Issued Capital* 95. Malvinder Mohan Singh Mr.18 0.

2006 is as follows: S.millions.17 132.38 1.30 (4.88 3.500 13.80) 7.22 (0. 2.35 (5.29 (0.010 5.79 0.29 (0. Chander Dang and Mr.) 0. 10 each 366. 2004 and 2005 are set forth below: (In Rs.16) Fiscal 2004 5.51) Fiscal 2005 0. Jasbir Grewal.30 (6. 10 each and has issued 4.57) 126. 1984 as an investment company under the name “Oscar Medical Enterprises Private Limited”.490 385.Financial Performance The financial results of MHPL for Fiscal 2003. The equity shares of SHPL are not listed in any stock exchange. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.15) (1.23) e. 1.77 132. Hemant Dhingra. Mr.54) 0.) Book Value per share (Rs. Subsequently. Shivi Holdings Private Limited (“SHPL”) SHPL was incorporated on April 28.000 12% non cumulative redeemable preference shares (non voting) of Rs. 10 each.03 2.77) 136 Fiscal 2004 4. No.05) 126.000 % of Issued Capital* 95.365.35 (6.89 126.45) . on November 18.000 ‘A’ Equity shares (non voting) of Rs. Malvinder Mohan Singh Total Number of equity shares of Rs. Board of Directors The board of directors of SHPL currently comprises Mr. Financial Performance The financial results of SHPL for Fiscal 2003.24) (1.250.19 3.30 (3. SHPL has issued 12. Shareholding Pattern The shareholding pattern of SHPL as of September 26. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation 0. 3. 2004 and 2005 are set forth below: (In Rs. Aditi Shivinder Singh Mr.00 *In addition.millions.43 100. 1999 it changed its name to its present name. Name of Shareholder Mr.44) 132.46 (8.35 (9.87) Fiscal 2005 (0. Shivinder Mohan Singh and Ms. Shivinder Mohan Singh Mr.

250 Mr.73) (1.76 Fiscal 2004 0.04 2.49) (6.50 (0.03 0.80) f. Board of Directors The board of directors of CPPL currently comprises Mr. buying. No. Shareholding Pattern The shareholding pattern of CPPL as of September 26.00 Ms.750 Mr.5 100. 6. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.14 0. Malvinder Mohan Singh and Ms.50 0.)* 4. Financial Performance The financial results of CPPL for Fiscal 2003. 1984 to carry on the business of inter alia manufacturing. The equity shares of CPPL are not listed in any stock exchange. medicines.reserves) Earnings/(Loss) per share (diluted) (Rs. 10 each.5 12.000 * In addition CPPL has issued 200. 2004 and 2005 are set forth below: (In Rs. Singh 18.millions. Chetak Pharmaceuticals Private Limited (“CPPL”) CPPL was incorporated on January 30.750 Ms. Shivinder Mohan Singh and Ms.01) 0.14) (16.250 Total 50.33 Book Value per share (Rs. selling and dealing in drugs. 10 each* % of Issued Capital 37. 3. 10 each have not been taken into account. Indira Brar.) (0. Name of Shareholder Number of equity shares of Rs. Indira Brar and Ms.02 2. Indira Brar and Ms. Indira Brar 6.04 2. Luxury Farms Private Limited (“LFPL”) 137 . pharmaceuticals.000 Class A non voting Equity Shares of Rs. 1.14 0.02) 10. Shivinder Mohan Singh and Ms.)* 0.5 12.5 37.000 Class A Equity Shares of Rs. Mr.14 0. Aditi Shivinder Singh 18. Japna Malvinder 2.88 9. Indira Brar 4. Malvinder Mohan Singh.86 9.76 Fiscal 2005 0. 2006 is as follows: S.95 * For the purpose of calculation of EPC and book value per share the 200.10 (5.03) 0.) Book Value per share (Rs. g.50 (0.

98 100. Shareholding Pattern The shareholding pattern of FHSPL as of September 26. 2003. promoting and managing the business of providing healthcare staffing and personnel in India and overseas.) Book Value per share ( Rs.) 1. The equity shares of LFPL are not listed in any stock exchange.90 (38.49) Fiscal 2004 0. On March 22. Malvinder Mohan Singh Total Number of equity shares of Rs. Japna Malvinder Singh Mr.040 45.040 % of Issued Capital* 50.27) (428. 1988 as a company engaged in the business of social.16 (3. 2004 and 2005 are set forth below: (In Rs. Malvinder Mohan Singh. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. 1. LFPL has issued 10.02 49. Rana Ranbir Singh Grewal. 100 each.90 (41. Shareholding Pattern The shareholding pattern of LFPL as of September 26. 1.000 14% non cumulative redeemable preference shares of Rs.90 (34. 10 each 149.08 (3. No.LFPL was incorporated on November 7. The equity shares of LFPL are not listed in any stock exchange. Vinay Kaul and Mr.01) (457.80) (43. Mr.92) h. 1984 as “Hemkunt Pharmaceuticals Private Limited” and subsequently on August 27.49) (38.36) (487. Ms. 2006 is as follows: S.90) 0. Financial Performance The financial results of LFPL for Fiscal.04) (36. 1987 it changed its name to “Ranbaxy Pharmaceuticals Private Limited”. 2006 it changed its name to its present name.45) 0. No.900 138 % of Issued Capital* (approximated) 99. 10 each 45. Board of Directors The board of directors of LFPL currently comprises Mr.000 90.00) Fiscal 2005 (3. Name of Shareholder Fortis Healthcare Holdings Limited Number of equity shares of Rs.93 . Name of Shareholder Mr. Japna Malvinder Singh. farming and poultry. Malvinder Mohan Singh and Ms.00 * In addition. industrial and commercial forestry. 2006 is as follows: S.millions. Fortis HealthStaff Private Limited (“FHSPL”) FHSPL was incorporated on January 31.24) 0. FHPL is engaged in the business of establishing. 2.

2.000 % of Issued Capital 36. No. Financial Performance The financial results of FHSPL for Fiscal 2003.26 i.50 0.000 6.2. The equity shares of REL are not listed in any stock exchange. Mr.06 0. 4. Aditi Shivinder Singh Total Number of equity shares of Rs. 3.02 10. FHSPL has also issued 90. Name of Shareholder Mr.249.900 6. 5.04 (0. 7.000 1. 1. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. Subsequently. Daljeet Singh and Ms.000. Gurkirat Singh Dhillion Mr. 6. Shivinder Mohan Singh Mr.249. Malvinder Mohan Singh Mr.) Book Value per share (Rs.00 * In addition.00 Board of Directors 139 .00 0.250.50 12.) 0.000-10% non cumulative redeemable preference shares of Rs. 1984 under the name “Vajreshwari Cosmetics Private Limited”.50 0. Anil Panwar. Japna Malvinder Singh Ms.01) 1.00 1.50 2. 2004 and 2005 are set forth below: (In Rs.000 0.02 0.01) 1. Board of Directors The board of directors of FHSPL currently comprises Mr. Shivinder Mohan Singh as nominee of FHHL.05) 10. 2006 it changed its name to Religare Enterprises Private Limited and on August 11. on January 31.50 0. Total 100 150. Mr. REL is an investment company.34 Fiscal 2004 0.250.00 0.000.50 12. Sunil Godhwani Ms. Mr.01 (0. Religare Enterprises Limited (“REL”) REL was incorporated on January 30. 10 each 18.06) 10.900 18. 2006. Gunita Hazuria. Shareholding Pattern The shareholding pattern of REL as of September 26.00 100. the word “private” was deleted and its name changed to its present name.07 100.millions.05 (0.000 100 100 50.30 Fiscal 2005 (0. 2006 is as follows: S.50 36. Gurpreet Singh Dhillon UG Shabnam Dhillon under the guardianship of Mr. 10 each. Shivinder Mohan Singh.

57 Fiscal 2005 0.25 0.millions.25 0. No. Bhagwan Hariram Bhojwani.00 0. 5. Yuvraj Narain Gorwaney and Mr. 6.75) 4. Mr. Mr. 2005 it changed its name to its present name.83 Fiscal 2004 0.000.000 % of Issued Capital* 99. Shivinder Mohan Singh jointly with REL Ms Japna Malvinder Singh jointly with REL Ms Aditi Shivinder Singh jointly with REL Total Number of equity shares of Rs. 2004 and 2005 are set forth below: (In Rs. Shivinder Mohan Singh and Mr.00 * RSL has also issued 5.The board of directors of REL currently comprises Mr. Shivinder Mohan Singh. Mr. Vinay Kaul. 1987 the word “Private” was deleted. 1.50% non cumulative redeemable preference shares of Rs.00 0.10 each.) Book Value per share (Rs. 2.31 4. Financial Performance The financial results of REL for Fiscal 2003. 3.00 100.00 0. On August 16. 10 each 19. 7.52) 9. Harpal Singh.25 (0.00 0. Shareholding Pattern The shareholding pattern of RSL as of September 26.400 100 100 100 100 100 100 20. 2006 is as follows: S.73 10. Malvinder Mohan Singh. Sunil Godhwani. Mr.) (0.000 12. 4. 140 . Board of Directors The board of directors of RSL currently comprises Mr. Vinay Kaul. Name of Shareholder Religare Enterprises Limited Ms. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. Sunil Godhwani jointly with REL Mr. Mr. 1996 it changed its name to “Fortis Securities Limited” and on December 22.99 0. Malvinder Mohan Singh jointly with REL Mr.76) 7. Sunil Godhwani.22) 4. The equity shares of RSL are not listed in any stock exchange.51 0. Mr. 1986 as “Empire Credit Private Limited”.47 (0.50) (1.000. Religare Securities Limited (“RSL”) RSL was incorporated as an investment company on June 26.999. Subsequently on November 11.25 (0.00 0.41 j.07) (0. Malvinder Mohan Singh. Gurpreet Singh Dhillon jointly with REL Mr. Mr.

71 18. 6. On April 4.90 40.00 33.00 0.73 31.05) 11. Yuvraj Narain and Mr.31 74.Financial Performance The financial results of RSL for Fiscal 2003.29 18.99 * RFL has also issued 25.) 32. 2004 it changed its name to “Fortis Finvest Limited”. 2006 it changed its name to its present name.000.999. 10 each* 24. Subsequently. 2. Aditi Shivinder Singh REL Mr.000 redeemable preference shares of Rs. 2006 is as follows: S.400 % of Issued Capital 99. 2004 and 2005 are set forth below: (In Rs.00 87.00 100.61 Fiscal 2004 169.42 (0.31 Fiscal 2005 460.000. on September 23.) Book Value per share (Rs. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.00 0.82 k. Gurpreet Singh Dhillon REL Mr. 4. Sunil Godhwani. No. Vinay Kaul. Board of Directors The board of directors of RFL currently comprises Mr. Financial Performance The financial results of RFL for Fiscal 2003. 7. 1995 as “Skylark Securities Private Limited”.18) 40.25 6. Japna Malvinder Singh REL Ms.86 40. Gurkirat Singh Dhillon REL Ms. 10 each to REL. 5.millions.00 0. Malvinder Mohan Singh REL Mr. 2004 and 2005 are set forth below: 141 . Name of Shareholder Religare Enterprises Limited Ms. Shivinder Mohan Singh REL Total jointly with 100 jointly with 100 jointly with 100 jointly with 100 jointly with 100 jointly with 100 25.00 Number of equity shares of Rs. 3. Religare Finvest Limited (“RFL”) RFL was incorporated as an investment company on January 6. Shareholding Pattern The shareholding pattern of RFL as of September 26. 1. The equity shares of RFL are not listed in any stock exchange.00 0.34 26. 2004 it changed its name to “Fortis Finvest Private Limited” and on October 7. Mr.34 (0.000 0.00 0.00 6.

1. 142 .00 10.400 100 100 100 100 100 100 750.07 0. 3.00 20.00 0. 2006 it changed its name to its present name. The equity shares of RCL are not listed in any stock exchange.02 10. Aditi Shivinder Singh jointly with REL Mr.26 Fiscal 2004 0. Mr.00 0. 5. RCL is engaged in the business of trading in agricultural products.(In Rs. Shivinder Mohan Singh jointly with REL Total Number of equity shares of Rs.95 0.00 Board of Directors The board of directors of RCL currently comprises Mr. 10 each 749.) 0. Name of Shareholder Religare Enterprises Limited Ms. petroleum and energy products.50 0.37 8. metals. 7.00 100. Gurkirat Singh Dhillon and jointly with REL Ms. Subsequently. Malvinder Mohan Singh. No.09 16. 2006 is as follows: S.00 0. Vinay Kaul.00 2.19 l.000 % of Issued Capital 99. Religare Commodities Limited (“RCL”) RCL was incorporated on November 25.50 0.07 0.28 Fiscal 2005 182.00 0. Sunil Godhwani and Mr.millions.00 15. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. 2.07 0.01 2. Shareholding Pattern The shareholding pattern of RCL as of September 26.00 0. Gurpreet Singh Dhillon jointly with REL UG Shabnam Dhillion under the guardianship of Mr. 2003 as “Fortis Comdex Limited”. Japna Malvinder Singh jointly with REL Ms. 4. Mr.) Book Value per share (Rs. 6.00 0. Shivinder Mohan Singh. 2006 it changed its name to “Religare Comdex Limited” and on June 2. on January 17. Malvinder Mohan Singh jointly with REL Mr.00 10.

500. RIBL is engaged in the business of a composite broker.50 (1.99 0. financial results for Fiscal 2003 are not available. 2. Yuvraj Narain.00 0.00 0. Financial Performance As RIBL has been incorporated in Fiscal 2006. Aditi Shivinder Singh jointly with REL Mr. Shachindra Nath and Mr. 2006 its name changed to its present name. The financial results of RCL for Fiscal 2004 and 2005 are set forth below: (In Rs. 2006 as “Religare Insurance Advisory Service Private Limited”.) 7. The equity shares of RIBL are not listed in any stock exchange.50 9.Financial Performance As RCL was incorporated in Fiscal 2004. 6. Mr. Sunil Godhwani jointly with REL Total Number of equity shares of Rs. 143 . Atul Gupta.00 Board of Directors The board of directors of RIBL currently comprises Mr. 2004 and 2005 are not available. 4. Bhagwan Hariram Bhojwani. [ ] each 2. 5. 2006 is as follows: S. Japna Malvinder Singh jointly with REL Ms. Mr.00 0.millions.72) 7. Name of Shareholder Religare Enterprises Limited Mr. Shareholding Pattern The shareholding pattern of RIBL as of September 26. insurance intermediary and insurance consultant.) Book Value per share (Rs.29) 7. Yuvraj Narain jointly with REL Mr.499. On August 4.50 m.47 (1.00 0. 2006 it changed its name to Religare Insurance Advisory Services Limited.72) (2. Religare Insurance Broking Limited (“RIBL”) RIBL was incorporated on January 10.00 100. Subsequently on May 17.000 % of Issued Capital 99. financial results for Fiscal 2003.22 Fiscal 2005 1. No.400 100 100 100 100 100 100 2. unless otherwise stated) Fiscal 2004 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. 7. 3. Shivinder Mohan Singh jointly with REL Mr.00 0. 1. Malvinder Mohan Singh jointly with REL Ms.

65) (2.50 (3. The equity shares of RCNPL are not listed in any stock exchange.) (0.87) o. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs. Subsequently. Shareholding Pattern The shareholding pattern of RHC as of September 26. fruits and fruit products and other agricultural products among others.21) (2. 1. Financial Performance The financial results of RCNPL for Fiscal 2003. Jasbir Grewal. No. 2. on May 22. Shivinder Mohan Singh Number of equity shares of Rs.540 1. Ranbaxy Holding Company (“RHC”) RHC was incorporated on May 24. Bhutani and Mr. 3.761 610. V. No.20) (0.M.000 % of Issued Capital 72.50 (2.50 2.millions. Aditi Shivinder Singh. Mr. 2006 is as follows: S. 1982 as “Ice Investment Company” as a private company with unlimited liability.n.) Book Value per share (Rs.56) 2. 2. 1994 as a company engaged in the business of cultivating and producing vegetables.000 70. Ms.55) 2. The equity shares of RHC are not listed in any stock exchange.94 49. 1987 it changed its name to “Shimal Investment and Trading Company” and on May 3. Shivinder Mohan Singh. Name of Shareholder Malav Holdings Private Limited Shivi Holdings Private Limited Mr.84 0.54 Fiscal 2004 (0.00 100. RHC is an investment company. Name of Shareholder Mr.24) (2.19) 1.16 144 . 2006 is as follows: S. 1.55) 2. Nursery Private Limited (“RCNPL”) RCNPL was incorporated on March 3.000 250.10 (2. Shivinder Mohan Singh Shivi Holdings Private Limited Total Number of equity shares of Rs.960 % of Issued Capital 49. 2004 and 2005 are set forth below: (In Rs. 100 each 611. 2000 it changed its name to its present name. R.65) Fiscal 2005 (0.00 Board of Directors The board of directors of RCNPL currently comprises Mr. 10 each 180.00 28.C. Shareholding Pattern The shareholding pattern of RCNPL as of September 26.

218. maintaining and managing clinical reference laboratories to provide testing.674. unless otherwise stated) 145 . Bimal K.4.046. Shareholding Pattern The shareholding pattern of SRL as of September 26. Mr. Mr.318 % of Issued Capital 50. Japna Malvinder Singh. V.918.349. Subsequently on December 13.) 546.496. Aditi Shivinder Singh.22 1.millions.millions.62 16. No. SRL is engaged in the business of establishing. Mr.29 8. Nimmi Singh.225. Ms.07 122.45 10.50 2. Financial Performance The financial results of RHC for Fiscal 2003.237.891 2.23 122. 10 each 6. The equity shares of SRL are not listed in any stock exchange.84 476.76 16.29 580. Shivinder Mohan Singh.57 122.93 2.935. 2004 and 2005 are set forth below: (In Rs. unless otherwise stated) Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.971. Vinay Kaul and Mr.659 2. 3.62 100.06 100. Mr.227.15 Fiscal 2005 1.218.87 710. Ms.384 13. 4.50 2.518. Purohit. Shivinder Mohan Singh. 2. Malvinder Mohan Singh Total 739 1. Arun K. Bhutani. Malvinder Mohan Singh.69 584. 2002 it changed its name to its present name.00 Board of Directors The board of directors of RHC currently comprises Mr.19 Fiscal 2004 835.000 0. Mr. Name of Shareholder Shimal Research Laboratories Limited Ranbaxy Holding Company Malav Holdings Private Limited Shivi Holding Private Limited Total Number of equity shares of Rs.M. Ms. Malvinder Mohan Singh. 1995 as “Specialty Ranbaxy Private Limited”.00 Board of Directors The board of directors of SRL currently comprises Mr. Harpal Singh. Mr. Financial Performance The financial results of SRL for Fiscal 2003. 1. Vinay Kaul.) Book Value per share (Rs. SRL Ranbaxy Limited (“SRL”) SRL was incorporated on July 7. 2004 and 2005 are set forth below: (In Rs. 2006 is as follows: S. diagnostic and prognostic monitoring services.00 16.50 3.384 2. Mr. Raizada and Dr.62 p.05 2.

39 5.00 50. Shivinder Mohan Singh Mr.00 25. The equity shares of VRPL are not listed in any stock exchange.27 0.000 % of Issued Capital 50. Shareholding Pattern The shareholding pattern of VRPL as of September 26.00 . Vinay Kaul Total Number of equity shares of Rs.) 358.21 (1.49 165. 2. Name of Shareholder Mr. Vistas Realtors Private Limited (“VRPL”) VRPL was incorporated on August 2. 2005 and 2006 are not available. J.33) q.08 79.00 25. 1.99 (2. 2006 is as follows: S. Nanki Parvinder Singh Total Number of equity shares of Rs. Nimrita Parvinder Singh Ms. Mr.000 10.000 146 % of Issued Capital 25. purchasing. Name of Shareholder Mr. Financial Performance As FHPL has been incorporated in Fiscal 2007.50) (18.00 25. 3. Japna Malvinder Singh Ms. developing and dealing in all kinds of properties.97 133.49 164. s. the financial results for the Fiscal 2004. 2006 is as follows: S. 2006 as a company engaged in the business of selling. Fortis HealthWorld Private Limited (“FHPL”) FHPL was incorporated on April 19.000 5.00 100.41) Fiscal 2004 558.00 Board of Directors The board of directors of FHPL currently comprises Mr. Shivinder Mohan Singh.01) 133. Daljit Singh.500 2. Mr.) Book Value per share (Rs.56 0. The equity shares of FHPL are not listed in any stock exchange. Shareholding Pattern The shareholding pattern of FHPL as of September 26. 10 each 5. No.06 (2. 2. Mr. No. 2006 as a company engaged in the business of manufacturing buying. 10 each 2.00 100.500 2.39) Fiscal 2005 523. Sunil Godhwani.Fiscal 2003 Sales and Other Income Profit/(Loss) after tax Equity Capital Reserves and Surplus (excluding revaluation reserves) Earnings/(Loss) per share (diluted) (Rs.500 2. 4.62 (20.83 133. Anil Panwar. Malvinder Mohan Singh Ms.49 379. selling and dealing with all types of pharmaceutical and chemical products of medicaments. 1. Puri.S.500 10. Mr.

purchasing. the financial results for the Fiscal 2004. Japna Malvinder Singh. 10 each 5. Shivinder Mohan Singh Ms.00 Board of Directors The board of directors of GBPL currently comprises Mr. 2006 as a company engaged in the business of selling. Financial Performance As GBPL has been incorporated in Fiscal 2007. t. see the section titled “Financial Statements-Related Party Transactions” beginning on page [●] of this Draft Red Herring Prospectus. Other Confirmations None of our Promoter Group companies have been become sick companies under the meaning of the Sick Industrial Companies Act and no winding up proceedings have been initiated against them.000 5. the financial results for the Fiscal 2004. The equity shares of GBPL are not listed in any stock exchange. No. Companies with which the Promoters have dissociated in the last three years The Promoters have not disassociated from any company in the last three years. Name of Shareholder Mr. Shivinder Mohan Singh and Ms. Shareholding Pattern The shareholding pattern of GBPL as of September 26. Financial Performance As VRPL has been incorporated in Fiscal 2007. 2005 and 2006 are not available.000 % of Issued Capital 50. 2. Greenview Buildtech Private Limited (“GBPL”) GBPL was incorporated on July 26.Board of Directors The board of directors of VRPL currently comprises Mr. Rajshree Singh. 1.00 100. developing and dealing in alls kinds of properties. Related Party Transactions For details of the related party transactions.000 10. Malvinder Mohan Singh and Ms. 2006 is as follows: S. Rajshree Singh Total Number of equity shares of Rs. 2005 and 2006 are not available. 147 .00 50.

148 . Any future dividends declared would be at the discretion of the Board of Directors and would depend on the financial condition. the terms of our credit facilities and other financing arrangements of the Company at the time a dividend is considered. Pursuant to the terms of the Company’s loan agreements with certain banks and financial institutions. results of operations. the Company cannot declare or pay any dividend to its Shareholders during any Fiscal year unless the Company has paid all the amounts remaining outstanding under such loan agreements to the respective lenders or made satisfactory provisions therefor or if the Company is in default of the terms and conditions of such loan agreements. contractual obligations. capital requirements.DIVIDEND POLICY The Company has not paid any cash dividends on its Equity Shares in the past and anticipates that any earings will be retained for development and expansion of its business and does not anticipate paying any cash dividends in the foreseeable future. and other relevant factors.

1. GAAP and IFRS have significant projects ongoing that could affect future comparisons such as this one. Potential investors should consult their own potential advisors for an understanding of the principal differences between Indian GAAP. 2. The following is a general summary of certain significant differences between Indian GAAP. no attempt has been made to identify future differences between Indian GAAP. cash flow statements. cash flow statement. nor has a complete reconciliation of Indian GAAP to U. GAAP AND IFRS Our financial statements are prepared in conformity with Indian GAAP. U. S. First time adoption First-time adoption of Indian GAAP requires retrospective application. GAAP or Indian GAAP to IFRS been undertaken by our management. Particulars Contents of financial statements Indian GAAP Balance sheet.S. accounting policies and notes are presented for the current year. Had any such quantification or reconciliation been undertaken by our management. Therefore. other potential significant accounting and disclosure differences may have come to its attention. U. GAAP and IFRS as a result of prescribed changes in accounting standards. U. U. U.S. No attempt has been made to identify all disclosure. US GAAP Comparative two years’ balance sheets. cash flow statements. which differs in certain significant respects from U. U.SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP.S.S.S. Regulatory bodies that promulgate Indian GAAP. Such differences involve methods for measuring the amounts shown in the financial statements of the Issuer. GAAP and IFRS.S. However. GAAP and IFRS. Similar to Indian GAAP IFRS Comparative two years’ balance sheets. GAAP and IFRS. GAAP and IFRS that may affect the financial information as a result of transactions or events that may occur in the future. The differences identified below are limited to those significant differences that are appropriate to our financial statements. GAAP and IFRS and how these differences might affect the financial statements appearing in the section titled “Financial Statements” beginning on page [●] of this Draft Red Herring Prospectus. In addition. no attempt has been made to identify future differences between Indian GAAP. Further. which we have not made. Finally.S. which are not identified below. income statements. GAAP or IFRS. with comparatives for the previous year. changes in shareholders’ equity and accounting policies and notes. GAAP or IFRS on its results of operations or financial position. with some optional 149 . Three years are required for public companies for all statements except balance sheet where two years are provided.S.S.S. presentation or classification differences that would affect the manner in which transactions and events are presented in the financial statements and the notes thereto We have not prepared financial statements in accordance with U. the Company cannot presently estimate the net effect of applying U.No. changes in shareholders’ equity and accounting policies and notes. as well as additional disclosures required by U.S. income statements. particular standards specify treatment for first-time Full retrospective application of all IFRSs effective at the reporting date for an entity’s first IFRS financial statements. they should not be construed as exhaustive as no attempt has been made by our management to quantify the effects of those differences. profit and loss account.

Similar to Indian GAAP. Business Combinations Restricts the use of pooling of interest method to circumstances which meet the criteria listed for an amalgamation in the nature of a merger. Include effect in the income statement for the period in which the change is made except as specified in certain standards (transitional provision) where the change during the transition period resulting from adoption of the standard has to be adjusted against opening retained earnings and the impact needs to be disclosed. Disclose pro forma comparatives. Consolidation of such entities may be required if certain conditions are met. However. Particulars Changes in accounting policies Indian GAAP adoption of those standards. . business combinations involving businesses or entities under common control or involving two or more mutual entities and business combinations in which separate entities or businesses are brought together to form a reporting entity by contract alone without obtaining an ownership interest. 3. Business combinations are accounted for by the purchase method only (except as discussed below). the accounting for the combination is 150 IFRS exemptions and limited mandatory exceptions. Consolidation of Variable interest entities There is no specific guidance with respect to Variable Interest Entities. The new amendment is applicable to accounting changes that are made in fiscal years beginning after 15 December 2005. Revenue Revenue is recorded on the basis of services rendered. Several differences can arise in terms of date of combination. as defined by the standard. In all other cases. It however scopes out businesses brought together to form a joint venture. extensive guidance is there for accounting of specific transactions SIC 12 states that a special purpose entity (SPE) should be consolidated when the substance of the relationship between an entity and the SPE indicates that the SPE is controlled by that entity. 4. Restate comparatives and prior-year opening retained earnings. the purchase method is used. especially if the Indian GAAP method is ‘amalgamation’ or pooling. The use of Pooling of Interest Method is prohibited. IFRS 3 requires all Business combinations to be accounted for on the basis of the purchase method.S.No. Retrospective adjustments for specific items. However. Recent amendment requires restatement of comparatives and prior year opening retained earnings. calculation of share value to use for purchase price. extensive guidance is there for accounting of specific transactions Entities are required to evaluate if they have any interest in Variable Interest Entities. 6. 5. Similar to Indian GAAP. In the event of combinations of entities under common control. US GAAP Generally include effect in the current year income statement through the recognition of a cumulative effect adjustment.

which is a component of shareholders’ funds. The goodwill shall be recognized as an asset on the acquisition date by the acquirer. for impairment. Intangible assets are recognized if the specific criteria are met.S. tested for impairment annually. Goodwill is computed as the excess of the purchase price over the fair value of the net assets acquired. Assets with a finite useful life are amortized on a systematic basis over their useful life. liabilities and contingent liabilities recognized. Goodwill is not required to be amortized. liabilities and contingent liabilities recognized exceeds the cost of the business combination. Negative Goodwill (i. liabilities and contingent liabilities and the measurement of the cost of the combination. Intangible assets Intangible assets are capitalized if specific criteria are met and are amortized over their useful life. Goodwill is tested for impairment annually for listed entities and other specified categories of entities satisfying certain turnover/borrowings criteria. IFRS 7. Goodwill is computed at its cost. based on specific criteria. 9. If the acquirer’s interest in the net fair value of the identifiable assets. When allocating purchase price of a business combination. generally not exceeding 10 years. at least annually. the acquirer shall reassess the identification and measurement of the acquiree’s identifiable assets. An asset with an indefinite useful life and which is not yet available for use should be tested for impairment annually. Intangibles that have an indefinite useful life are required to be tested. The recoverable amount of an intangible asset that is not available for use or is being amortized over a period exceeding 10 years should be reviewed at least at each financial yearend even if there is no indication that the asset is impaired.No. 8. Particulars Indian GAAP US GAAP done on a historical cost basis in a manner similar to a pooling of interests for all periods presented. Any remaining excess is considered to be an extraordinary gain. and recognize immediately in the profit or loss.e. companies need to identify and allocate such purchase price to intangible assets. Intangible assets that have finite useful life are required to be amortized over 151 . the excess of the fair value of net assets acquired over the aggregate purchase consideration) Negative goodwill is allocated to reduce proportionately the fair value assigned to nonmonetary assets. Where a scheme of amalgamation/merger sanctioned by the Court specifies a different accounting treatment for goodwill. the goodwill acquired in a business combination shall be measured at cost less any accumulated impairment loss. that treatment is followed and disclosures made for impact of deviation from the treatment specified under the relevant accounting standard. After the initial recognition. being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets. any excess remaining after that reassessment. Goodwill Goodwill is computed as the excess of the purchase price over the carrying value of the net assets acquired. Negative goodwill is computed based on the book value of assets (not the fair value) of assets taken over/acquired and is credited to the capital reserve account. Goodwill is not amortized but..

entities carrying on insurance business and enterprises having turnover above Rs 50 crores or borrowings above Rs 10 crores. Reportable business segments are required to be identified based on specified criteria. Segmental disclosures are required to be made by all public business enterprises. Foreign exchange gains or losses relating to the procurement of property. Both business and geographical segments are identified and either of the two is classified as primary segment (with the other one being classified as the secondary segment). Particulars Segment Information Indian GAAP Segmental disclosures are required to be given by all public companies (listed or in the process of getting listed). If the approval is after year end.S. assets should be frequently revalued to match their carrying amount with their fair values. The residual value and the useful life of an asset and the depreciation method shall be reviewed at least at each 152 . IAS 14 prescribes detailed disclosures for primary segment and relatively lesser disclosure for secondary segments. 11. Fixed assets are recorded at cost or revalued amounts. Foreign exchange gains or losses relating to liabilities incurred in the procurement of property. The Company however is required to disclose the amount of dividends that were proposed or declared after the balance sheet date but before the financial statements were authorized for issue. when proposed or declared after the balance sheet date. banks.No. Dividends Dividends are accounted for when approved by the board/shareholders. Disclosures are required for both Business and geographic segments. Specific requirements govern the format and content of a reportable segment and the basis of identification of a reportable segment. the geographical areas in which it operates and its major customers. financial institutions. can be capitalized as part of the asset. Depreciation is recorded over the asset’s estimated useful life which maybe different from the useful life based on Schedule XIV. 10. should not be recognized as a liability on the balance sheet date. A Company is required to report information about its products and services. Schedule XIV of the Companies Act prescribes minimum rates of depreciation and typically companies use these as the basis for useful life. under very restrictive conditions. Both business and geographical segments are identified and either of the two is classified as primary segment (with the other one being classified as the secondary segment). Property. Dividends to holders of equity instruments. IFRS Segmental disclosures are required to be given by entities whose equity or debt securities are publicly traded or those entities that are in the process of issuing such publicly traded equity or debt securities. Revaluation of fixed assets is not permitted under US GAAP. Plant and Equipment Fixed assets are recorded at the historical costs or revalued amounts. Depreciation is recorded over the asset’s useful life. the dividend is not considered to be a subsequent event that needs to be reflected in the financial statements. Dividends are reflected in the financial statements of the year to which they relate even if proposed or approved after the year end. Depreciation is recorded over the asset’s estimated useful life. US GAAP their estimated useful lives. If carried at revalued amount. plant and equipment. 12. plant and equipment are recorded in the income statement. All foreign exchange gains or losses relating to the payables for the procurement of property. plant and equipment from outside India are required to be adjusted to the cost of the asset.

US GAAP An entity must capitalize borrowing costs attributable to the acquisition. Market value is defined as being current replacement cost subject to an upper limit of net realizable value (i. Reversal of a write down is 153 Measured at cost or net realizable value whichever is lower. Particulars Indian GAAP Interest cost on specified or identifiable borrowings is capitalized to qualifying assets during its construction period. estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal) and a lower limit of net realizable value less a normal profit margin. Net realizable value is the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale. Investments are categorized into• Held to maturity investments (measured at amortized cost using effective interest method) • Financial assets at fair value through profit or loss (where changes in fair value are taken directly to profit or loss) • Available for sale investments (where changes in fair value are accounted in equity and recycled to the profit or loss when realized) 13.No. in which case. Reversal (limited to the amount of original write down) is required for a subsequent increase in value of inventory previously written down. An entity has the option of capitalizing borrowing costs incurred during the period that the asset is getting ready for its intended use. a provision for diminution is required to be made by the entity. Investment in Securities Investments are categorized into• Current investments (where changes in fair value are taken directly to profit or loss) • Long Term investments which are carried at cost unless there is a permanent diminution in value. Net realizable value is the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale. construction or production of a qualifying asset. . Inventory Measured at cost or net realizable value whichever is lower. Measurement is done at lower of cost or market.e. • • 14. regardless of whether they are realized or unrealized are recognized as profit or loss) Available for sale (where unrealized gains or losses are accounted as a component of equity and recognized as profit or loss when realized) IFRS financial year end. Reversal (limited to the amount of original write down) is required for a subsequent increase in value of inventory previously written down.S. Investments are categorized into• Held to maturity (measured at amortized cost using effective interest method) Trading (where changes in fair value.

Actuarial gains or losses are recognized immediately in the US GAAP prohibited. The liability for defined benefit schemes is determined using the projected unit credit actuarial method. The discount rate for obligations is based on market yields of high quality corporate bonds. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Impairment loss is recorded in the income statement. An impairment analysis is performed if impairment indicators exist. If at the beginning of the year. The liability for defined benefit schemes is determined using the projected unit credit actuarial method. There is no defined method of expense determination. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). The plan assets are measured using fair value or using discounted cash flows if market prices are unavailable. The impairment loss is the difference between the asset’s/CGU’s carrying amount and its recoverable amount. as a write down creates a new cost basis. Annual service cost and defined benefit obligation is determined through actuarial valuation. Particulars Indian GAAP 15. The actuarial gains or loss are to be recognized using either . Pension / Gratuity / Post Retirement Benefits (Defined Benefit Plans) The standard requires the company to assess whether there is any indication that an asset is impaired at each balance sheet date. other than Goodwill. there has been a change in the estimates used to determine the asset’s/CGU’s recoverable amount since the last impairment loss was recognized. Impairment of assets. cash outflows or discount rates used to determine the asset’s/CGU’s recoverable amount since the last impairment loss was recognized. the actuarial gains or losses exceeds 10% of the 154 IFRS An entity shall assess at each reporting date whether there is any indication that an asset/CGU maybe impaired. Discount rate to be used for determining defined benefit obligations is by reference to market yields at the balance sheet date on high quality corporate bonds of a currency and term consistent with the currency and term of the post employment benefit obligations. intangible assets with indefinite useful lives and intangible assets not available for use 16. An impairment analysis is performed if impairment indicators exist. Recoverable amount is the higher of an asset’s/CGU’s selling price or its Value in use.S. the discount rate determination criteria. An impairment loss for an asset/CGU recognized in prior accounting periods should be reversed if there has been a change in estimates of cash inflows. An impairment loss recognized in prior periods for an asset shall be reversed if. The recoverable amount is the higher of the asset’s/CGU’s fair value less costs to sell and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset/CGU and from its disposal at the end of its useful life. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value (which is determined based on discounted cash flows). The reversal of impairment loss should be recognized in the income statement. Impairment loss (if any) is provided to the extent the carrying amount of assets/Cash generating units (CGUs) exceeds their Recoverable amount. Reversal of impairment loss recognised in prior period is prohibited. In this case.No. the carrying amount of the asset/CGU should be increased to its recoverable amount. and guidance for valuation of plan assets and the choice is left to the discretion of actuary. An impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The liability for defined benefit plans like gratuity and pension is determined as per actuarial valuation.

any profit or loss shall be recognised immediately except that. then such amount is not recognized immediately.S. If the present value of a reasonable amount of rentals for the leaseback period represents 10% or less of the fair value of the asset sold. If the sale price is below fair value. the excess over fair value shall be deferred and amortised over the period for which the asset is expected to be used. 17. the timing of the recognition of a gain on the sale depends on whether the seller has leased back a minor portion of the leased asset or more than a minor portion. The remaining gain on the sale is deferred and recognized as a 155 .No. any profit or loss shall be recognised immediately except that. US GAAP greater of the projected benefit obligation or the market-related value of plan assets. If the sale price is above fair value. if the transaction is established at fair value. If a sale and leaseback transaction results in an operating lease. any profit or loss shall be recognised immediately. Leases Leases are classified as finance or operating in accordance with specific criteria. IFRS the corridor approach or immediately in the profit or loss account or in the statement of recognized income and expenses. Sale and leaseback If the sale-leaseback transaction results in an operating lease. If the seller-lessee retains more than a minor portion. it shall be deferred and amortised in proportion to the lease payments over the period for which the asset is expected to be used. if the loss is compensated for by future lease payments at below market price. Gain on a sale and leaseback transaction where the leaseback is an operating lease is recognized immediately. 18. Judgment is required to determine if the criteria are met or not. If the sale price is below fair value. Judgment is required to determine if the criteria are met or not. the excess over fair value shall be deferred and amortised over the period for which the asset is expected to be used. Leases are classified as finance or operating in accordance with specific criteria. any gain in excess of the present value of a reasonable amount of rent should be recognized currently. but less than substantially all of the use of the property. the seller lessee has leased back a minor portion in which case the seller should recognize any gain on the sale of the asset at the time of sale. If the sale price is above fair value. if the loss is compensated for by future lease payments at below market price. Particulars Indian GAAP statement of income. The criteria to classify leases as capital or operating include specific quantitative thresholds. but amortized over the average remaining service period of active employees expected to receive benefits under the plan. and it is clear that the transaction is established at fair value. it shall be deferred and amortised in proportion to the lease payments over the period for which the asset is expected to be used.

when realised. Entities are only allowed to use the fair value approach. Deferred tax asset/liability is classified as long term. in which case they are capitalized. Start up costs and organization costs Requires costs of startup activities and organization costs to be expensed as incurred. Deferred tax is charged or credited directly to equity if the tax relates to items that are credited or charged directly to equity in the same or different periods. IFRS Deferred taxes are accounted for using the Balance sheet liability method. 22. Start up costs are required to be expensed unless attributable to bringing the asset to working condition for its intended use. which focuses on timing differences. The item is recognised as an asset when the realisation of the associated benefit such as an insurance recovery. Deferred tax is charged or credited directly to equity if the tax relates to items that are credited or charged directly to equity. Particulars Indian GAAP 19. The tax rate applied on deferred tax items is the enacted or the substantively enacted tax rate as on the balance sheet date. Start up costs relating to plant. Deferred tax assets/liabilities should be measured based on enacted or substantively enacted tax laws and tax rates that are expected to apply in the period they are realized/settled. A possible asset that arise from past events. Deferred tax asset/liability is classified as current and longterm depending upon the timing difference and the nature of the underlying asset or liability. deferred tax is always recognized in the income statement US GAAP reduction of rent expense over the term of the lease in proportion to the related gross rentals. generally upon receipt of consideration. A possible asset that arise from past events. may not be capitalized.S. Stock based compensation Entities have a choice of accounting methods for determining the costs of benefits arising from employees stock compensation plans. The item is recognised as an asset when the realisation of the associated benefit such as an insurance recovery. is virtually certain.No. Although the fair value approach is recommended. which focuses on temporary differences. and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the entity’s control. A loss on the sale is recognized immediately. Deferred Taxes Deferred taxes are accounted for using the income statements approach. 21. Contingent assets are recognised. is virtually certain. Except for deferred tax on certain expenses written off directly against equity which is required to be adjusted in equity. and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the entity’s control. 20. property & equipments. The tax rate applied on deferred tax items is the enacted tax rate. other than those related to bringing the asset to its working conditions. entities may use the intrinsic value method and give fair value disclosures. Contingent assets 156 . Entities are only allowed to use the fair value approach.

It can also be a present obligation that is not recognised because it is not probable that there will be an outflow of economic benefits. these disclosures could be required in order to present meaningfully the “elements” of the transaction. Indian GAAP does not allow fair valuation of financial assets/ liabilities except for current investment which are carried at lower of cost and market values The nature and extent of any transactions with all related parties and the nature of the relationship must be disclosed. If a loss is probable but the amount is not estimable. which is a disclosure requirement. Recognition and measurement of financial assets and liabilities Financial assets and liabilities are recorded at cost.S. together with the amounts involved. . Contingent assets. A possible obligation whose outcome will be confirmed only on the occurrence or nonoccurrence of uncertain future events outside the entity’s control. expense allowances and similar items) must be disclosed in the separate financial statements of whollyowned subsidiaries. 25. Related parties disclosures An accrual for a loss contingency is recognised if it is probable (defined as likely) that there is a present obligation resulting from a past event and an outflow of economic resources is reasonably estimable. Scope of related party is wider than the scope defined in Indian GAAP. However. as well as the balances for each major category of related parties. US GAAP IFRS 23. Contingent liabilities are disclosed unless the probability of outflows is remote. Similar to US GAAP. All material related party transactions (other than compensation arrangements. Financial assets and liabilities are initially recorded at cost and then restated on fair values except for held till maturity investments which are carried at amortized cost. Particulars Indian GAAP However. Contingent liabilities are disclosed unless the probability of outflows is remote.No. There is no specific requirement in IFRS to disclose the name of the related party (other than the ultimate parent entity). There is a requirement to disclose the amounts involved in a transaction. where an inflow of economic benefits is probable are not disclosed in financial statements. Contingent liabilities 24. unless these are presented in the same financial report that includes the parent’s consolidated financial 157 A possible obligation whose outcome will be confirmed only on the occurrence or nonoccurrence of uncertain future events outside the entity’s control. together with the amounts involved. Contingent liabilities are disclosed unless the probability of outflows is remote. The nature and extent of any transactions with all related parties and the nature of the relationship must be disclosed. Discounting of liability is not permitted and no provision is recognized on the basis of constructive obligation. the low end of a range of estimates is recorded. or the amount of the outflow cannot be reliably measured.

Amortisation should be done based on the interest method.S. Report primary and secondary (business and geographic) segments based on risks and returns and internal reporting structure. May be set off against the realised proceeds of 158 Similar to Indian GAAP 28. The transaction costs of an equity transaction should be . 26. Provisions Record the provisions relating to present obligations from past events if outflow of resources is probable and can be reliably estimated. IFRS Similar to US GAAP 27.No. Disclosing non-adjusting events. Discounting required only when timing of cash flows is fixed. Rules for specific situations (including employee termination costs. Use group accounting policies or entity accounting policy. Adjust the financial statements for subsequent events. 29. Similar to Indian GAAP. Use internal financial reporting policies (even if accounting policies differ from group accounting policy). Similar to Indian GAAP. Similar to Indian GAAP Similar to US GAAP 30. Discounting is not permitted. Segment reporting Report based on operating segments and the way the chief operating decisionmaker evaluates financial information for purposes of allocating resources and assessing performance.Nonadjusting events are not required to be disclosed in financial statements but are disclosed in report of approving authority e. Earning per share Debt issue cost Use weighted average potential dilutive shares as denominator for diluted EPS. Directors’ Report. US GAAP statements (including those subsidiaries). providing evidence of conditions at balance sheet date and materially affecting amounts in financial statements (adjusting events). 31. providing evidence of conditions at balance sheet date and materially affecting amounts in financial statements (adjusting events).26 requires to be expensed. Discounting is not permitted. but other methods may be used if the results are not materially different from the interest method.g. environmental liabilities and loss contingencies). Debt issue costs are expensed as incurred. Share issue expenses AS . Particulars Post balance sheet events Indian GAAP Adjust the financial statements for subsequent events. Similar to Indian GAAP Debt issue costs should be deferred as an asset and amortised as an adjustment to yield.

net of any related income tax benefit. The costs of a transaction which fails to be completed should be expensed. Correction of error/ omissions Include effect in the current year income statement.S. IFRS accounted for as a deduction from equity. Restatement of comparatives is mandatory. Restatement of comparatives is mandatory. 159 .No. The nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on current profit or loss can be perceived. Particulars Indian GAAP US GAAP share issue 32.

1956 ('the Act'). 2003 and 2002. 2003 AND FOR THE PERIOD FROM JUNE 29. and 160 . 2005. 2005. 2002. We have examined the financial information of Fortis Healthcare Limited (‘FHL’ or ‘the Company’) annexed to this report for the purposes of inclusion in the offer document prepared by the Company in connection with its proposed Initial Public Offer (‘IPO’) . 2004. paragraph B (1) of Part II of Schedule II to the Indian Companies Act. the Securities & Exchange Board of India (‘SEBI’)(Disclosure & Investor Protection) Guidelines 2000 ('the Guidelines') issued by the Securities and Exchange Board of India (‘SEBI’) on January 19. which has been approved by the Board of Directors of the Company. arrived at by the 100% book building process (referred to as ‘the Issue’). 2002. AS RESTATED UNDER INDIAN GAAP FOR FORTIS HEALTHCARE LIMITED AND CONSOLIDATED SUMMARY STATEMENTS OF ASSETS AND LIABILITIES AS OF MARCH 31. 2006. 2005. 2004. PROFITS AND LOSSES FOR EACH OF THE YEARS ENDED MARCH 31. 2006. 2006. 2005. • profits and losses of the Company for each of the years ended March 31. 2006. 2. has been prepared in accordance with the requirements of: 1. AS RESTATED UNDER INDIAN GAAP FOR FORTIS HEALTHCARE LIMITED Auditors’ Report as required by Part II of Schedule II to the Companies Act. We have examined the attached restated unconsolidated summary statements of • assets and liabilities of the Company as at March 31. 2002 AND CASH FLOWS FOR EACH OF THE YEARS ENDED MARCH 31. requesting us to carry out work on such financial information. 2003 and for the period from June 29. 2004. 2004.633 equity shares of Rs. 2006 To The Board of Directors Fortis Healthcare Limited Escorts Heart Institute & Research Centre Okhla Road New Delhi 110 025 India Dear Sirs. 2005. 2002 AND CASH FLOWS FOR EACH OF THE YEARS ENDED MARCH 31. 2006. 2003 AND 2002. We have examined such financial information taking into consideration: • the terms of reference received from the Company vide their letter dated June 2. 2005. 2000. 2001 to March 31. 2004. proposed to be included in the offer document of the Company in connection with its proposed IPO. 2006. 1992. 2003. as amended from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act. 2002. 2006. 2003 AND 2002. 2001 TO MARCH 31. 2006. 2003. The Company proposes to make an IPO for the fresh issue of 56. as may be decided by the Board of Directors. 2004. 2003 AND FOR THE PERIOD FROM JUNE 29. A. 2004. Such financial information.FINANCIAL STATEMENTS RESTATED SUMMARY STATEMENTS UNCONSOLIDATED SUMMARY STATEMENTS OF ASSETS AND LIABILITIES AS OF MARCH 31. 2006. • the Guidance Note on Reports in Company Prospectuses and Guidance Note on Audit Reports/Certificates on Financial Information in Offer Documents issued by the Institute of Chartered Accountants of India. 2004. 2005. 2005. Financial information as per restated unconsolidated summary statements 1. 10 each at such premium. PROFITS AND LOSSES FOR EACH OF THE YEARS ENDED MARCH 31. 2001 TO MARCH 31.666. 1956 September 29.

hereinafter collectively referred to as ‘restated consolidated summary statements’ and attached as Annexure III to this Report). 2003 and for the period from June 29. 2003 to March 31. 2006. 2006. hereinafter collectively referred to as ‘restated unconsolidated summary statements’ and attached as Annexure I to this Report). we confirm that: • the impact arising on account of changes in accounting policies from those adopted by the Company for the year ended March 31. 2003 and 2002 as prepared by the Company and approved by its Board of Directors (these statements. we have placed reliance on the restated summary statements of assets and liabilities and the related restated summary statements of profits and losses and cash flows (hereinafter collectively referred to as ‘restated group entities summary statements’) of the under-mentioned subsidiaries. B. 2006 has been adjusted with retrospective effect in the attached restated unconsolidated summary statements. 2003 and the years ended March 31. • material amounts relating to previous years have been adjusted in the restated unconsolidated summary statements in the years to which they relate. 2002. 6. 2004. prepared for the periods subsequent to their becoming a subsidiary of FHL. 2005 to March 31. • cash flows of the Fortis Group for each of the years ended March 31. Summary of significant accounting policies adopted by the Company and Material adjustments carried out in the preparation of the audited unconsolidated financial statements for the year ended March 31. which need to be disclosed separately in the restated unconsolidated summary statements. Chandiok and Co.Malhotra & Associates A.F. 2004. Based on our examination of these restated unconsolidated summary statements. Oscar Biotech Limited Escorts Heart Institute and Research Centre Limited * Period from December 20. its Subsidiaries and Associate (hereinafter collectively referred to as the ‘Fortis Group’) as at March 31. • profits and losses of the Fortis Group for each of the years ended March 31. 2003 and 2002. and • there are no qualifications in auditors’ reports that require an adjustment in the restated unconsolidated summary statements.Ferguson & Co. are appropriate and more fully described in the notes appearing in Annexure II _to this report. 2004. 2004. A. 2005 and 2006 Period from March 21. For the purpose of our examination of restated consolidated summary statements.cash flows of the Company for each of the years ended March 31. as indicated in the table below and as examined and reported upon by their respective auditors and have not carried out any additional procedures thereon. 2005. 2006 Period from September 29. As informed to us by the management. 2006. 2001 to March 31. • there are no extraordinary items. 4. 2006 to March 31. 2005. 2006 and the significant notes to the restated unconsolidated summary statements are enclosed as Annexure II to this report. 2006. 2004. Name of the group entity International Limited Hospital Name of the respective auditors of the entities Walker. 2. no financial statements have been prepared by the Company as at any date or for any period subsequent to March 31. 2003 and 2002 as prepared by the Company and approved by its Board of Directors (these statements. 2005. 2005. We have examined the attached restated consolidated summary statements ofassets and liabilities of the Company. 2006 161 . The restated unconsolidated losses have been arrived at after making such adjustments and regroupings as. in our opinion. Financial information as per restated consolidated summary statements 5. 2006. Periods reported upon by other auditors • • 3.

there are no extraordinary items. 2006 to March 31. Other financial information 10. as approved by the Board of Directors of the Company and annexed to this report: (i) Details of Loans and Advances as appearing in Annexure V. we have relied on management approved restated summary statements as at and for the period from January 3. we confirm that: • the impact arising on account of changes in accounting policies from those adopted by the respective entities within the Fortis Group for the year/period ended March 31. 2006). We have relied on the examination reports furnished by the respective auditors of the group entities and have not carried out any additional tests or procedures thereon. The restated consolidated losses have been arrived at after making such adjustments and regroupings as. Summary of significant accounting policies adopted by the Fortis Group and Material Adjustments carried out in the preparation of the restated consolidated summary statements and the Significant Notes thereto are enclosed as Annexure IV to this report. As per the said examination report of AFF. (‘AFF’) contains a disclaimer with regard to the following matters• the position of land under leasehold arrangements with the Delhi Development Authority (Refer Note 15 of significant notes to restated consolidated summary statements enclosed as Annexure IV to this Report). (an associate of FHL effective January 3. and the qualifications in auditors’ reports which require an adjustment. 9. AFF is unable to express an opinion at this stage in respect of these matters. 8. have been given effect to in the restated consolidated summary statements. we are not the auditors of certain group entities. in their examination reports. material amounts relating to previous years have been adjusted in the attached restated consolidated summary statements in the years to which they relate. 2006 prepared specifically for the purpose of consolidation and have not carried out any procedures thereon. 7. Based on our examination of these restated consolidated summary statements and the examination reports on restated group entities summary statements issued by the auditors of those respective entities. which need to be disclosed separately in the restated consolidated summary statements. the eventual outcome of which cannot presently be estimated. We have examined the following unconsolidated financial information of the Company proposed to be included in the Offer document.F. • • • As stated above. these matters are pending in appeal at various stages. Therefore. The auditors of these entities have. confirmed that these restated group entities summary statements have been prepared and restated by the respective entities in accordance with the requirements of Part II of Schedule II to the Companies Act and the SEBI Guidelines.* Consolidated including its under-mentioned subsidiaries • Escorts Heart Centre Limited • Escorts Heart and Super Specialty Institute Limited • Escorts Heart and Super Specialty Hospital Limited • Escorts Hospital and Research Centre Limited In respect of Sunrise Medicare Private Limited. • C. 162 .Ferguson & Co.62 million (net of demands raised twice in respect of certain years) raised by Income-tax authorities (Refer Note 16 of significant notes to restated consolidated summary statements enclosed as Annexure IV to this Report). are appropriate and more fully described in the notes appearing in Annexure IV to this report. in our opinion. (ii) Details of Sundry Debtors as appearing in Annexure VI. The examination report on restated group entities summary statements for Escorts Heart Institute and Research Centre Limited (Consolidated) issued by A. certain demands aggregating Rs 2060. 2006 has been adjusted with retrospective effect in the attached restated consolidated summary statements.

based on the restated unconsolidated summary statements of the Company. ‘financial information as per restated consolidated summary statements’ and ‘other financial information’ referred to above have been prepared in accordance with Part II of Schedule II of the Act and the Guidelines.R. 15. (viii) Statement of Tax Shelter. 13. (iv) Statement of Accounting Ratios. as appearing in Annexure VIII to the report. In our view. 2005. as appearing in Annexure IX. We have no responsibility to update our report for events and circumstances occurring after the date of the report. We further confirm that the Company has not declared any dividend on equity shares for the years ended March 31. as set forth in the above paragraphs of this report. 11. (ix) Statement of possible tax benefits available to the Company and its shareholders as appearing in Annexure XIII. referred to or distributed for any other purpose without our prior written consent. (v) Details of Secured and Unsecured Loans. The sufficiency of the procedures performed. 2003 and 2002. as appearing in Annexure X. we make no representation regarding the sufficiency of the procedures described above either for the purposes for which this report has been requested or for any other purpose. 2004. For S.(iii) Details of Investments as appearing in Annexure VII. (vii) Capitalisation Statement. 2006 163 . Chartered Accountants per Raj Agrawal Partner Membership No. is the sole responsibility of the Company. the ‘financial information as per restated unconsolidated summary statements’. (vi) Details of Other Income. Batliboi & Co. 14. This report is intended solely for your information and for inclusion in offer document prepared in connection with the proposed IPO of the Company and is not to be used. as appearing in Annexure XI. 82028 Place : New Delhi Date : September 29. as appearing in Annexure XII. 12. 2006. Consequently. This report should not be in any way be construed as a reissuance or redating of any of the previous audit reports by us.

70 516. appearing in Annexure II.95 749.04 7.RESTATED UNCONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES (Rs.94 1.34 171.295.246.97 - 20.49 11.35 4.21 451.42 51.54 3.197.60 0.33 6.88 739.888.Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances Total Liabilities and Provisions Secured Loans Unsecured Loans Deferred Payment Liabilities Current Liabilities Provisions Total Net Worth Equity Share Capital 1% Non Cumulative Redeemable Preference Share Capital Share Application Money (Pending Allotment) Reserves & Surplus Less: Debit Balance of Profit & Loss Account Miscellaneous Expenditure (To the extent not written off or adjusted) Net Worth 1.96 707.36 0.64 153.75 8.144.92 230.92 1.27 3.74 3.600.68 241.13 128.09 690.75 190.78 2.69 289.700.746.92 18.86 1.04 289.05 15.25 14.63 217.317.188.35 11.71 116.60 253.60 350. 2006 For and on behalf of the Board of Directors of Fortis Healthcare Limited Managing Director Director Company Secretary President Finance 164 .92 35.64 303.95 1.92 754.32 1.51 602. In Million) Particulars As at March 31.14 14.07 987.06 610. As per our report of even date For S.54 0.45 512.68 822.76 9.26 - 895.68 8.29 4.083.02 776.25 15.29 592.71 618.04 8.90 1.33 8. 2004 As at March 31.64 26. as restated under Indian GAAP.89 206.65 16.76 131.71 451.73 62.96 1.007.320. Profits and Losses and Cash Flows.26 14.44 103.83 4. 2002 Fixed Assets Gross Block Less: Accumulated Depreciation / Amortization Net Block Capital Work in Progress including capital advances Expenditure during Construction Period (Pending Capitalization/Allocation) TOTAL Investments Current Assets.433. 82028 Place: New Delhi Date: September 29.53 9.FORTIS HEALTHCARE LIMITED ANNEXURE I .81 1.04 - 679.428.R.98 107.95 54.10 232.67 1.87 157.02 1.30 780.26 90.03 606.19 15.03 The above statement should be read with the Notes to the Restated Unconsolidated Summary Statement of Assets and Liabilities.89 166.55 45.188.13 474.Batliboi & Co. 2006 As at March 31.863. Chartered Accountants per Raj Agrawal Partner Membership No.428.14 0.05 49.10 0.88 263.77 844.00 10.23 7.79 241. 2005 As at March 31.70 846.97 5.70 128.24 232.63 9.87 13.02 1.95 458.81 0.70 8.251.05 - 1. 2003 As at March 31.04 217.45 0.62 615.71 1.20 15.00 2.13 4.

96) (516.68 (193.03) (193.85 3.R.54 26.82 603.80) (1.25 62.42 480.76) (264.82 710.60 45.97 18.65 139.51 34.10) (19.71) (618.34 196. 9 a in Annexure II) Prior Period Items Net Profits /(Losses) as per audited accounts Adjustments on restatement(Refer Note No.69) (263.01 (55.09 (276.59 78.67) (618.10 369.53 999. appearing in Annexure II.86 (264.RESTATED UNCONSOLIDATED SUMMARY STATEMENT OF PROFITS AND LOSSES (Rs.14 597.25 122.69) - (195.78) 2.75 73.38) (80.51 251.55 141.91 62.21) The above statement should be read with the Notes to the Restated Unconsolidated Summary Statement of Assets and Liabilities.Batliboi & Co. As per our report of even date For S. 2002 Income Operating Income Other Income Total Income Expenditure Materials Consumed Personnel Expenses Operating Expenses General and Administration Expenses Selling and Distribution Expenses Interest Expense Preoperative & Preliminary Expenditure Written Off Depreciation/ Amortization Total Expenditure Profits /(Losses) before Tax Fringe Benefit Tax Net Profits /(Losses) before Prior period & Exceptional Items Exceptional Item(Refer Note No.21 665. 4 h in Annexure II) Balance Carried Forward as restated 977.74 119.45) 53. 82028 Place: New Delhi Date:September 29.96) - (83.10 18. 2005 Year Ended March 31.00 404.74 20.77 149.69 22.81) (162.98) (83.98) (1. 2004 Year Ended March 31.36) (0.in Million) PARTICULARS Year Ended March 31.61) 150.35 1.76) (264. 4 in Annexure II) Net Profits/(Losses) as restated Profit & Loss Account at the beginning of the year (Refer Note 6 in Annexure II ) Loss Brought forward from Amalgamating Company upto March 31.29) 176.80 (80.67) (26.20 (277.09 54.31 22.44 503.10) (458.FORTIS HEALTHCARE LIMITED ANNEXURE I .65 102.29 22.77 43.275.41) (458.03) (2.10 25.53) (279.51 34. 2006 Year Ended March 31.54) - (895.13 388. 2006 For and on behalf of the Board of Directors of Fortis Healthcare Limited Managing Director Director Company Secretary President Finance 165 .81) 107.88 630.94 (162.21 53. 2003 Period Ended March 31.97 82.92 272.65 118.08 77.21) - (236.65 16. as restated under Indian GAAP.60 (275.03) (193.37 48.48) (263.96 386.45 95.38) (2. 2004 (Refer Note No.65) (516.51) 2.68 67.89 68.52 184.80 218.90 20.21) (57. Chartered Accountants per Raj Agrawal Partner Membership No.76) 28. Profits and Losses and Cash Flows.

40) 3.79) (740.74) 272.77) 55.97 (57.31 (7.231.41) 67.27) 95.71) 22.46 11.35) (7.23 8.75 79.44) 62.51) 73.30 0.40) (0.86 8.51 13.88) 22.55) (459.29 (254.64) 78.05 (0.82 (95.87 1.64) (236.82 1.91) (18.00) (19.48) 77.01 98.64 92.23) 14.14 0.71 737. 2005 Year Ended March 31.50 (252.73) (37.38) 617.02 (6.87 9.19 (7.35 0.09) 264. 2003 Year Ended March 31.60) 9.26) (20.45 (83.14 (62.74) (4.04 0.57) (3.72) 247.02) 6. 2004 Year Ended March 31.21) 332.19 8.599.96 0.93 7.70) 863.05) 0.35 8.04) (18.32 3.48 (13.64) 58.87 8.76) 583.24 (58.67) (70.98) 7.05 (6.23 (120.48) (195.65) 62. 2002 A.33 2.65) (83.70) (4.74) (3.28 (11.29 (88.41 10.04 11.07) (105.95) (148.31) 8.87 0.85 (14.87 14.61 (504.95 14.15) (88.71) 2.00 7.35 0.91 16.62 0.73 (44.11) (26.10) (3.12) 0.87 0.87) 4.35 166 .64 8.98) (76.02) (22.77 (95.09) (55.09 (27.84) 4. as restated Adjustment for: Depreciation & Amortisation Loss on sale of fixed assets Provision for Doubtful Debts Bad Debts/Sundry Balances written off Arrangement fees written off Foreign Exchange Loss/(Gain) Interest income Interest expense Profit on sale of Hospital Land Operating profits/(Losses) before working capital changes Movement in working capital: Decrease / (Increase) in sundry debtors Decrease / (Increase) in inventories Decrease / (Increase) in loans and advances Decrease / (Increase) in other current assets Increase / (Decrease) in current liabilities Cash generated from /(used in) operations Direct Taxes Refunded/ (Paid) Net Cash generated from/(used in) operations (A) B.RESTATED UNCONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS (Rs.22 11.67) 1.64 1.41 (7.68 (107.32) (57.14) 2.39) 18.67) (236.in Million) Particulars Year Ended March 31.55 (7.15 (46.86) (106.68) 4.98) 0.19) (32.36 (11.67) 54. 4 h in Annexure II) Cash and cash equivalents at the end of the year Components of cash and cash equivalents: Cash on Hand Cheques in hand Balances with Scheduled Banks on Current Accounts Total (276.12 (158.84 (254.18 14.20 (274.02 18.23 0.20 0.71) (159.51) (0.60) (105.91 (10. as restated Add: Income Tax Expense -Fringe benefit tax Net profits / (losses) before tax.66) (509.94) (0.56 (98.56 (11.46 87.FORTIS HEALTHCARE LIMITED ANNEXURE I . Cash Flows from Investing Activities Purchases of fixed assets Proceeds from sale of Fixed Assets Fixed Deposits with Banks Loans to Subsidiaries (Net) Deposits with other companies (Net) Purchase of Investments Interest received Net Cash generated from / (used in) Investing activities (B) C.05 (6.99) (4.46 (3.21 7.60) 0.72) (5.49 7.46) 1.45 2.13 (43.23 132.44 (508.23 0.79) 90.52 (9.21 (94.501.746.52 2.44 0.51 (115.85 105.18) (2.80 8.32 3.08) 0.65 (0.18) 6. Cash Flows from Operating Activities Net profits / (losses) after tax.01 11.04 239.49 0. Cash Flows from Financing Activities Proceeds from issuance of share capital (Refer Note (a) below) Proceeds from receipt of share application money Proceeds from long-term borrowings Repayment of long-term borrowings Proceeds / (Repayments) of short-term borrowings ( Net) Arrangement fees paid Interest paid Net Cash generated from / (used in) financing activities ( C ) Net changes in cash & cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the year Add: Cash acquired on amalgamation (Refer Note no.81) (195.41 0.80) (6.11 8.02 3.20 341.53) (6.37) (18.52) 0.12 1.449.55) (98.21 41.41) (57. 2006 Year Ended March 31.06 331.46 0.02 5.

Profits and Losses and Cash Flows. Chartered Accountants Managing Director Per Raj Agrawal Partner Membership No.R. Notes: (a) Proceeds from issuance of share capital during the year ended March 31.Batliboi & Co.2006 Director For and on behalf of the Board of Directors of Fortis Healthcare Limited Company Secretary President Finance 167 . has no impact on the Company's cash flows for any of the years. appearing in Annexure II. 82028 Place: New Delhi Date:September 29. As per our report of even date For S.The above statement should be read with the Notes to the Restated Unconsolidated Summary Statement of Assets and Liabilities. (b) The amalgamation of Fortis Medical Centre Holdings Limited with the Company (Refer Note no. 2006 exclude Rs 5.4 h in Annexure II) is a non cash transaction and hence. as restated under Indian GAAP.20 Million relating to share capital issued for consideration other than cash.

All direct capital expenditure on expansion is capitalised. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.000 are depreciated fully in the year of purchase.NOTES TO RESTATED UNCONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES. ii) After impairment. iii) Individual assets not exceeding Rs. whichever is higher. ii) Depreciation on all other fixed assets is provided using the Straight Line Method as per the useful lives of the assets estimated by the management. (e) Intangibles Technical Know-how Fees Technical Know-how Fees paid to Partner Healthcare System. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its originally assessed standard of performance. Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use. (d) Expenditure on new projects and substantial expansion Expenditure directly relating to construction activity is capitalised. As regards indirect expenditure on expansion. (c) Depreciation i) Depreciation on Leasehold Improvements is provided over the lease period. 2. PROFITS AND LOSSES AND CASH FLOWS. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit & Loss Account. manage and operate a chain of multi speciality hospitals and commenced its commercial operation by setting up the Fortis Heart Institute and Multispeciality Hospital at Mohali in the Year 2001. AS RESTATED UNDER INDIAN GAAP. being the estimated useful life as per the management estimates. The financial statements have been prepared under the historical cost convention on an accrual basis. Software Cost of Software is amortized over a period of 6 years. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. The recoverable amount is the greater of the asset’s net selling price and value in use. Boston (USA) is amortized over a period of 3 years from the date of commencement of commercial operations. Subsequently the Company has set up/ taken over the management of various other hospitals in different parts of the country. 168 . Nature of Operations The Company was incorporated in the year 1996 to set up. only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. depreciation is provided on the revised carrying amount of the asset over its remaining useful life. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Indirect expenditure incurred during construction period is capitalised to the extent to which the expenditure is indirectly related to construction or is incidental thereto. 5. FOR FORTIS HEALTHCARE LIMITED. In assessing value in use. 1. (b) Fixed Assets Fixed assets are stated at cost less accumulated depreciation and impairment loss. 1956. (f) Impairment i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors. or at the rates prescribed under Schedule XIV of the Companies Act. Significant Accounting Policies (a) Basis of preparation of Financial Statements The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act. if any.FORTIS HEALTHCARE LIMITED ANNEXURE II .

are recognized as income or as expenses in the year in 169 . Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. including depreciation are recognized as expense in the Profit and Loss Account. Provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. iii) Exchange Differences Exchange differences arising on the settlement of monetary items or on restatement of Company's monetary items at rates different from those at which they were initially recorded during the year. by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Lease income is recognized in the Profit and Loss Account on a straight line basis over the lease term. Long-term investments are carried at cost. Inventories Inventories are valued as follows: Medical Consumables and Pharmacy Items Lower of cost and net realizable value. Non-monetary items that are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. are being charged to consumption in the year of purchase.(g) (h) (i) (j) (k) (l) iii) A previously recognized impairment loss is increased or reversed depending on changes in circumstances. stores and spares. ii) Conversion Foreign currency monetary items are reported using the closing rate. Cost is determined on weighted Fuel average basis Other consumables. wherever required. less estimated costs of completion and costs incurred to make the sale. Leases Where the Company is the lessee Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items. Investments Investments that are intended to be held for more than a year are classified as Long-term investments. Management fee from hospitals is recognized as per the terms of the agreements with respective hospitals. being immaterial in value terms. the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. are classified as operating leases. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Where the Company is the lessor Assets subject to operating leases are included in fixed assets. Foreign Currency Transactions i) Initial Recognition Foreign currency transactions are recorded in the reporting currency. Deferred Revenue Expenditure Cost incurred in raising funds (Arrangement fees on Term Loan) is amortised over the period for which the funds are acquired. However. or reported in previous financial statements. Net realizable value is the estimated selling price in the ordinary course of business. Operating Income Operating Income is recognized as and when the services are rendered/ pharmacy items are sold. Costs.

Exchange differences on liabilities relating to fixed assets acquired from outside India are added to the cost of such assets. (n) Income Taxes Tax expense comprises current. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. in respect of which a reliable estimate can be made. If the Company has carry forward of unabsorbed depreciation and tax losses. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. For the purpose of calculating diluted earnings per share. iv) Forward Exchange Contracts not intended for trading or speculation purposes The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. in order to bring them in line with the groupings as per the audited financials of the Company for the year ended March 31. if any) by the weighted average number of equity shares outstanding during the year. Provisions are not discounted to their present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. 170 . Unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realised. deferred tax assets are recognised only if there is virtual certainty that such deferred tax assets can be realised against future taxable profits. net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. ii) Liability for Gratuity and leave encashment is accrued and provided for on the basis of actuarial valuation made at the end of each financial year. (m) Retirement Benefits i) Retirement benefits in the form of Provident Fund/ Pension Schemes are charged to the Profit & Loss Account of the year in which contributions to the respective funds are due. expenses. Any profit or loss arising on cancellation or renewal of forward exchange contracts is recognized as income or as expense for the year. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Material Regroupings Appropriate adjustments have been made in the Restated Unconsolidated Summary Statements of Assets and Liabilities. Profits and Losses and Cash Flows. wherever required. (o) Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes.which they arise. These are reviewed at each balance sheet date and adjusted to reflect the current best management estimates. by a reclassification of the corresponding items of income. 2006 and the requirements of the Guidelines issued by the Securities and Exchange Board of India (Disclosure and Investor Protection Guidelines 2000) as amended from time to time. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. (p) Provisions A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation. deferred and fringe benefit tax. assets and liabilities. 3.

08) 0.24) 1. 2004.28) (1.25 (.29 0. 2004 (Rs. (g) Reversal of Preoperative/Preliminary Expenditure written off During the year ended March 31.54) (28. a provision was created for non recoverable Withholding Tax forming part of ‘Advance Tax and Tax Deducted at Source’.69) (0. For the purpose of this statement.57 0. 2006. 2002 Adjustments forPrior Period Items (Refer note b) Discount on sales Purchases Salaries and Wages Professional charges to doctors Sub Total Excess Provisions/Unclaimed Balances written back (Refer note c) Provision for doubtful debts (Refer note d) Provision for doubtful loans and advances (Refer note e) Bad Debts written off (Refer note f) Reversal of Preoperative/Preliminary Expenditure written off (Refer note g) Total (0.2006.61 0.80) 0. have been appropriately adjusted to the respective years in which the same were originally created. preoperative expenses pertaining to previous years were written off. For the purpose of this statement. (d) Provision for Doubtful Debts During the years ended March 31.05 (2. the said liabilities. 2005. 2002. the said provisions.47) 1. 2005.34 0. 2005. the said expenses have been appropriately adjusted to the respective years in which these were incurred. 2002.53) 0.61 0. wherever required.62 (1.45 0. 2003 P/e March 31. 2004. 2004.09) (b) Prior Period Items In the financial statements for the years ended March 31. such prior period items have been appropriately adjusted to the respective years to which they relate.64 (0. certain provisions were made for bad and doubtful debts. the said provisions have been appropriately adjusted in the year ended March 31. certain debts relating to Fortis Medical Centre Holdings Limited.95 2. 2006 and 2005. Accordingly.4.21 2. which pertained to earlier years.95 1.23) 0. 2002. out of which some part related to the period ended March 31. were written off. 2005 Y/e March 31. (c) Excess Provisions/Unclaimed Balances Written Back In the financial statements for the years ended March 31. 2003 and 2002. in Million) Y/e March 31. as restated. 2003 and 2002. 171 . (e) Provision for Doubtful Loans and Advances During the year ended March 31. which pertained to the year ended March 31. for the year ended March 31. have been appropriately adjusted to the respective years in which these debtors were accounted for. 2004.79) (1. certain items of income / expenses have been identified as prior period items. wherever required.33 0. For the purpose of this statement. For the purpose of this statement.67 1. Material Adjustments (a) Summary of results of restatements made in the audited financial statements of the Company for the respective years and their impact on the profits / losses of the Company is as under: Y/e March 31. 2005.67 (1. adjustments have been made to the summary statement of profits and losses.84) (1.83) (0.08 0.89) (2. (f) Bad Debts written off During the year ended March 31.79 0.05 0.29 0.16 (0.47 (26. certain liabilities created in the earlier years were written back. For the purpose of this statement. 2004 and the period ended March 31.83) 0. 2006 Y/e March 31.

However. on transfer of various assets and liabilities of FMCHL to the Company as at the appointed date. between Fortis Healthcare Limited (‘the Company’) and Fortis Medical Centre Holdings Limited (‘FMCHL’).e.2 million were allotted by the Company to the members of FMCHL. was approved by the Hon’ble High court at New Delhi. as on April 1. assets. NCT of Delhi and Haryana on December 23. During the year ended March 31. earned leave liability of employees was accounted for based on the actual leaves standing to the credit of employees as at the close of the year and retirement gratuity liability was accounted for as per the ‘Payment of Gratuity Act. stand transferred to and vested in the Company. of the business of FMCHL.21 20.80 Share Capital to be issued by the Company to the Members of 5. the Company shall continue to carry on the business of managing and operating chain of multi specialty hospitals. issued by the Institute of Chartered Accountants of India. the Company had allotted to the members of FMCHL 1 (one) equity share of the face value of Rs. obligations etc. As a result of this change. credited as fully paid up for every 4 (four) equity shares of Rs. 2005 have been adjusted accordingly. the Scheme of Amalgamation was accounted for under the ‘Pooling of Interest Method’. 10/. the assets and liabilities of the Company. Accordingly.000 equity shares of Rs. benefits. with effect from the appointed date i. the Company changed its accounting policy and accounted for the liability for employees’ earned leave and retirement gratuity based on actuarial valuation. 5. 1956. wherein all the assets and liabilities of FMCHL became. 520. April 1. 2004 172 . Profits and Losses and Cash Flows. (iii) In terms of Accounting Standard 14 – Accounting for Amalgamations issued by the Institute of Chartered Accountants of India.e. in Million) 37. excepting that the equity shares held by the Company in FMCHL stood cancelled. Net Block of Fixed Assets Net Current Assets Less: Unsecured Loan Total Net Assets Value Add: Loss brought forward from the amalgamating company as on the date of amalgamation i.61 (7.60 Reserve (v) The above accounting was given effect to in the audited financial statements for the year ended March 31. (ii) FMCHL was engaged in the business of managing and operating hospitals and as per the scheme of amalgamation. following adjustments had been made in the books of account of the Company: (Rs.90 million. after amalgamation. 10/-(Ten) each of the Company. 2005. In terms of the scheme. 3. as restated.59 19.each fully paid-up aggregating to Rs. 2002. 10/. 2004. 2004. all the assets. for the purposes of the summary statement of Assets and Liabilities. (iv) Pursuant to the Scheme. As per the Scheme. liabilities.5. the accumulated liability on earned leave and retirement gratuity and the ‘loss’ for the said year was lower by Rs. 2005. Non – Adjustment Item Upto financial year 2000-01.55 1. rights. Accordingly. licenses. liabilities. expenses and cash flows for the year ended March 31. The Company filed the Order of the Hon’ble High Court with the Registrar of Companies. income. 1972’.each held by the members of FMCHL in FMCHL. in line with Accounting Standard 15. vide its order dated October 7.80 Cancellation of Share Capital of FMCHL 20. 2006 since the Court order approving the scheme was received only on October 7.20 FMCHL Adjustment arising on amalgamation credited to Amalgamation 15. 2005 and accordingly. 2004. the business of FMCHL had been transferred to the Company on the going concern basis. 2005. since the appointed date for amalgamation was April 1.47) 28. the effect has been considered in the year ended March 31.(h) Scheme of amalgamation/merger of Fortis Medical Centre Holdings Limited with Fortis Healthcare Limited (i) The Scheme of Amalgamation/ merger (‘the scheme’) under sections 391 and 394 of the Companies Act. April 1.

2005 and g) Escorts Heart Centre Limited with effect from. no adjustment has been made for the liability that may relate to the year ended March 31. 2006. as per audited financial statements (Increase)/ Decrease in accumulated losses as at April 1. Associate Key Management Personnel (‘KMP’) Enterprises owned or significantly influenced by key management personnel or their relatives 173 . 2005. e) Escorts Heart and Super Specialty Institute Limited with effect from September 29. Harpal Singh .54) Segment Reporting As the Company's business activity primarily falls within a single business and geographical segment. 2005 h) Fortis Medical Centre Holdings Limited. as restated (26. Ranbaxy Laboratories Limited (‘RLL’). 2004. in the absence of relevant information. d) Escorts Hospital and Research Centre Ltd. as restated. Ranbaxy Holding Company (‘RHC’) (Related party till March 31. (Refer note 4(h) above Sunrise Medicare Private Limited with effect from January 3. which was a board controlled subsidiary of the Company since December 20. Shivinder Mohan Singh . 2006 Mr. 2002 (Rs. Subsidiary Companies a) International Hospital Limited (‘IHL’). there are no additional disclosures to be provided under Accounting Standard 17 'Segment Reporting'. 2002. 2005. with effect from September 29.Chairman Mr. has become 99. f) Escorts Heart and Super Specialty Hospital Limited with effect from September 29. September 29. a subsidiary till March 31. amalgamated pursuant to the Order of Hon’ble High Court dated October 07.2006. Reconciliation of Profit & Loss Account as at April 1. 2002 as a result of (26. in Million) Profit & Loss Account Balance as at April 1. 2002.Managing Director SRL Ranbaxy Limited (‘SRL’). b) Oscar Bio Tech Private Limited (‘OBTPL’) with effect from March 21. 2005. c) Escorts Heart Institute and Research Centre Limited (‘EHIRCL’) with effect from September 29. other than those already provided in the financial statements. 2001. 2006.6. 2005. 2002. 8. 2005 – Fortis Nursing Education Society (‘FNES’)) 7. Related Party Disclosures Names of Related parties Holding Company Fortis Healthcare Holdings Limited with effect from March 31. In the summary statement of Assets and Liabilities and Profits and Losses.90% subsidiary of the company with effect from March 20.54) adjustments for Preoperative & Preliminary Expenditure written off Profit & Loss Account Balance as at April 1.

451.06 Transaction details Holding Company Expenses allocated to related parties International Hospitals Ltd.06 2004 .03 - 15.17 7.04 0. Ranbaxy Laboratories Limited Licence User Agreement Fees Ranbaxy Holding Compay Balances Outstanding at the year end Loans / Advances recoverable Escorts Heart Super Speciality Institute Limited International Hospitals Ltd.46 15. Rent Income Fortis Nursing Education Society Interest Income International Hospitals Ltd.40 13. Sunrise Medicare Pvt. Sundry Debtors Sunrise Medicare Pvt.13 90.66 0.81 0. DETAILS OF RELATED PARTY TRANSACTIONS 2005 .68 - 6. Ranbaxy Laboratories Limited Purchases of Medical consumables and pharmacy items Ranbaxy Laboratories Limited International Hospitals Ltd.31 0.60 - - - - 3. Fortis Nursing Education Society Ranbaxy Laboratories Limited Sunrise Medicare Pvt.29 0.03 - - - 6.30 0. Investment Escorts Heart Institute Research Centre Limited International Hospitals Ltd.48 402.80 - - - 0.06 0.94 1. Oscar Bio-Tech Private Ltd.10 10.05 - 0.05 2005 .69 0. Corporate Guarantee for Loans Taken Ranbaxy Holding Company (excluding 2. Pathology Expenses SRL Ranbaxy Ltd.90 7.43 0. Ltd.06 2004 05 2005 .01 - 20.00 - 0.98 0.09 - - - - - - - - - - - - - 61. Operation and Management Fees Sunrise Medicare Pvt. Rehabilitation centre Income International Hospitals Ltd.323. Legal and Professional charges Ranbaxy Holding Company Sale of Fixed Assets International Hospitals Ltd.The schedule of Related Party Transactions is as under.39 0.68 - - - 0. Other Current Assets Sunrise Medicare Pvt. Oscar Bio-Tech Private Ltd.85 - 16. Ltd.14 0.26 - - 5.000 shares of Ranbaxy Laboratories Limited pledged for loans) Subsidiaries Associate 2004 . Sundry Creditors Key Management Personnel Ranbaxy Laboratories Limited SRL Ranbaxy Ltd.20 - 1.93 - 174 .53 - 20. Interest Expense International Hospitals Limited Oscar Bio-Tech Private Ltd. SRL Ranbaxy Ltd.04 - - - 0. Ltd. Ltd.44 - 12. Sunrise Medicare Pvt. SRL Ranbaxy Ltd.58 0. Ltd.889.82 2.36 15.01 Key management personnel (KMP) - - 36.48 4.10 0. Managerial Remuneration Key Management Personnel Repair and Maintenance Ranbaxy Laboratories Limited Subscription of Share Capital Fortis Health Care Holding Ltd. Ltd.35 0.29 12.29 32.05 2004 – 05 Enterprises owned/significantly influenced by KMP/their relatives 2005 .02 - 5.06 2004 05 2005 . Unsecured Loans Oscar Bio-Tech Private Ltd.06 24. Sunrise Medicare Pvt.11 450.49 1. Ltd.

22 0.82 321. Since AS – 18 on Related Party Transactions as issued by the Institute of Chartered Accountants of India. Hospital Building has been taken on lease for a period of 10 years at Mohali and for a period of 14 years at Amritsar.67 0. 2002 has not been presented above. 2004. hence information for the years ended March 31. as per note b below. 600 million. There are no restrictions imposed by the lease arrangements and the rent is not determined based on any contingency.81 4. had been transferred to Leasehold Improvements. Rs. There is no escalation clause in the lease agreements.70 1. in view of the losses incurred by the Company during the period ended March 31.12 Minimum Lease PaymentsDue Not later than one year 84.28 0.35 than five years Due Later than five years 194.05 294.70 0.84 Due Later than one year but 6. 2005 and 2006 and large amounts of accumulated losses carried forward at the close of the respective years.2003 had been shown as ‘Exceptional Item’ in the Profit & Loss Account for the year ended March 31. Pursuant to an agreement entered into with a party.63 In accordance with Accounting Standard 22 ‘Accounting for Taxes on Income’.28 0. 175 . 2003. 2004.84 162.46 There being no lease arrangements during the years ended March 31. 2002 and March 31. 2002 and the years ended March 31 2003. c) Expenses incurred on behalf of / by related parties. In both cases.46 57. The Company has further sub-leased a part of the Hospital Building to a few service providers.11 2. to be amortized over the period of lease. issued by the Institute of Chartered Accountants of India. 2004.03 0.01 million. Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term.43 2. if any.63 Due Later than one year but not later 325.64 for the year Minimum Lease PaymentsDue Not later than one year 1. the agreements are further renewable at the option of the Company. deferred tax assets on carried-forward losses and unabsorbed depreciation have not been accounted for in the books. The details of sublease payments expected to be received under non-cancelable subleases as at each year end are as under: (Rs. There is no escalation clause in the respective lease agreements. first became applicable to the Company with effect from the accounting year starting April 1. The Company has also taken few Medical Equipments on operating lease for a period of 7 years. 2003 and for the period ended March 31.43 3.49 not later than five years Due Later than five years 4. 2003 for a total sale consideration of Rs.76 0. (a) (b) (c) 10. On sale of the said assets to aforesaid party.51 2.66 29. in Million) 2005-06 2004-05 2003-04 2002-03 2001-02 Sublease payments received 2.39 246. The total of future minimum lease payments under the non-cancelable operating leases are as under: (Rs.Notes: a) All figures are in Rs Million. various fixtures which were an integral part of the Building (hitherto capitalized under Plant & Machinery and Medical Equipments) but were not part of sales of aforesaid assets. the Company has sold Hospital Land and Building situated at Mohali on October 1. in Million) 2005-06 2004-05 2003-04 Lease payments during the year 69. being the excess of sale consideration over the written down value of Land & Building as at October 1. is disclosed elsewhere in the notes to accounts. 2004. b) Details of remuneration paid to key management personnel.15 0. 107. and later reimbursed by / to them have not been considered above. 9.50 58.00 57. There are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency.77 4. since it is not virtually certain whether the Company will be able to utilize such losses / depreciation.85 0. no disclosures are required for those respective years.

62.03 0. The Company has incurred losses of Rs.95 13. The cash loss component out of total loss of Rs. 2002 (a) Claims against the Company not acknowledged as debts (in respect of compensation demanded by the patients/ their relatives for negligence). Sundry debtors’ balances for Ex-Servicemen Contributory Health Scheme (ECHS) and Serving Defence Personnel of Rs 164. Mohali for sales tax purposes. 2005 19. 2005 8. As per management.35 million during the year 2002-03 and Rs. 2003 0.03 0.52 As at March 31. in Million) Particulars As at March 31. The expenses shown in the Profit and Loss Account are net of expenses aggregating to Rs 78. 2004 1.03 13.95 13.11. in Million) Particulars As at March 31. in the opinion of the management. Unredeemed Bank Guarantees executed in favour of lessor as security for hospital land and building taken on lease. 40. The Company has made the provision for doubtful debts of Rs 3. 276.40 As at March 31. 2004 6.67 12. 2003 4.71 million is Rs.04 As at March 31. 1.89 million during the year 2001-02 allocated/ apportioned by the Company to Subsidiary Companies.15 million and Rs 4. The cases are pending with various Consumer Disputes Redressal Commissions. Rs. Contingent liabilities (not provided for) in respect of: (Rs.91 As at March 31. 1. is adequate. Unredeemed Bank Guarantees executed in favour of Excise and Taxation Department. 2002 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances) 1. 2006 18. 27.71 million during the year 2005-06. 14. Companies under the same management and to another party with whom the Company has entered into an operations and management agreement. earned operating profit of Rs. Capital Commitments: (Rs. 276. thus.71 million during the current year and has accumulated losses of Rs 895.11 million relating to the investment in a subsidiary.52 (b) 13.03 0.76 million during the current year. as per estimation made by the management. In view of above and the expected improvement in the financial results projected by the management. 244.88 As at March 31. 2006 which has resulted in erosion of a portion of the Company's net worth. 40. In the opinion of the Board of the Directors of the Company. 15.95 - - (c) 0. the expenses so transferred are attributable to the activities of/services rendered to/availed by these companies / parties. these claims are not likely to devolve on the Company due to their frivolous nature.19 million against the above which. the accounts have been continued to be prepared on a going concern basis. Rs.59 million respectively as at the year end remain subject to confirmation.67 million as at March 31. 2006 83. 203.93 As at March 31. 176 .28 As at March 31. The Company has.35 million and includes borrowing cost of Rs.Rs.65 million during the year 200304.16 million during the year 2004-05.84 As at March 31.14 0.

66 0.54. b) The above remuneration includes the amounts allocated to other companies as referred to in Note no.92 1.44.59 2003-04 5.82 0.19 million (USD 159.02 Particulars Salaries and Allowances Contribution to provident fund Perquisites 2005-06 5.62 0.59 0. 7.43 0.19 0.25 Total 6.295.69 6. 177 .045 @ closing rate of 1 Euro = Rs. 2006: Particulars Import Creditors ECB Loan (Principal Amount) ECB Loan (Interest Accrued but not due) Amount Rs.13 1.30 3. As the Company had commenced the commercial operations effective June 28. 14 above.12 million (USD 6. Remuneration to Directors debited under different heads of account is as follows (Rs.44 0.44. 18.562.59 2004-05 5.500 @ closing rate of 1 USD = Rs. Particulars of Unhedged Foreign Currency Exposure as at March 31.97) Rs. 2002. 2001 to March 31. 7.02 0.994 @ closing rate of 1 USD = Rs.86 million (Euro 143. in Million) 2002-03 2001-02 2.85 6.98) Rs. the Profit & Loss Account for the year 2001-02 was prepared for the period from June 29.05 0. 2001.44 0.16.97) 17.66 a) The above remuneration excludes contribution to Gratuity Fund / Provision for Leave Encashment.

96 As at March 31.93 1.76 673.94 54.04 1.10 3.96 1.66 14.65 18.27 217.98 107.01 4.13 254.53 9.97 18.165.203.51 14.52 983.68 3. As per our report of even date For S.28 4.90 434.75 8.45 0.Batliboi & Co.42 31.90 135.39 0.68 226.58 213.116.95 9. 2003 1.95 846.54 102.26 285.458.60 633. 2006 5.12 1.192.819.54 0.56 131.FORTIS HEALTHCARE LIMITED ANNEXURE III .157.07 5. 2002 1.01 12.07 7.71 1.395.78 As at March 31.78 749.91 102.32 As at March 31.01 15.03 The above statement should be read with the Notes to the Restated Consolidated Summary Statement of Assets and Liabilities.295.04 15.23 380.80 285.74 679.33 41.63 75. in Million) Particulars Fixed Assets Gross Block Less: Accumulated Depreciation / Amortization Net Block Capital Work in Progress including capital advances Expenditure during Construction Period (Pending Capitalization/Allocation) TOTAL Investments Deferred tax assets (Refer Note 10 in Annexure IV) Goodwill Current Assets.95 As at March 31. Chartered Accountants Managing Director per Raj Agrawal Partner Membership No.21 0.44 54.00 2.21 137. 2004 842.20 15.77 844.64 16.821.35 4.48 4.61 1.00 10.160.21 451.96 1.05 531.90 1.12 217.10 0.12 103.64 789.29 7.33 1. appearing in Annexure IV.06 4. 82028 Place: New Delhi Date: September 29. Profits and Losses and Cash Flows.206.97 5.26 263.71 451.50 1.31 3.34 9.88 157. 2005 1.345.221.64 8.94 167.61 864.63 731.60 0.25 17.29 2. as restated under Indian GAAP.50 202.277.36 5.116.48 1.600.58 10.46 9.057.Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances Total Liabilities and Provisions Secured Loans Unsecured Loans Deferred Payment Liabilities Current Liabilities Provisions Deferred Tax Liability (Refer Note 10 in Annexure IV) Minority Interest Total Net Worth Represented by Equity Share Capital 1% Non Cumulative Redeemable Preference Share Capital Share Application Money (Pending Allotment) Reserves & Surplus Less: Debit Balance of Profit & Loss Account Miscellaneous Expenditure (To the extent not written off or adjusted) Net Worth As at March 31.197.RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES (Rs.268.78 2.05 1.628.19 1.84 21.700.09 213.26 44.04 49.265.251.R.37 2.28 61.60 1.68 226.83 1.30 840.60 13.76 16.40 144. 2006 Director For and on behalf of the Board of Directors of Fortis Healthcare Limited Company Secretary President Finance 178 .03 606.94 1.67 56.40 55.246.007.48 704.32 739.443.00 168.541.168.69 179.24 234.61 7.98 47.28 1.05 463.213.

37) Year Ended March 31.27) (3.33 87.43 9.41 (650.23) (531.47 222.69 55.034.RESTATED CONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS (Rs.56 500.53 227.21) (463. 2003 388.70 0.53 155.R.86 (264.09 77.13 686.89 (572.52 10.02 (625.65 11.55 (535.55) 77.09 54.99) (199.03) (25.97 18.71) (1.76) (264.27) (197.59 80.54) (263.26 41.64 40.98) 8.69 (197.60 45.95 (192.18 (200.04 2.925.96) (201.02 (85.31 3.206.05) (263.14 291.51 34.80) 26. In Million) 179 .07 25.94) (3.89 68.25 122.10 53.27) (19. As per our report of even date For S.33) 84.2006 For and on behalf of the Board of Directors of Fortis Healthcare Limited Managing Director Director Company Secretary President Finance FORTIS HEALTHCARE LIMITED ANNEXURE III .09 (236.97 (170.85 3.RESTATED CONSOLIDATED SUMMARY STATEMENT OF PROFITS AND LOSSES (Rs.01 949.507. 2004 491.30 (68.19 35. 82028 Place: New Delhi Date: September 29.65 139.96) 107.Batliboi & Co.85) 32.45 95.27) Year Ended March 31.51 34.91 779.10 (83.82) 0.971.52 (167.14 597.17 272. Chartered Accountants Per Raj Agrawal Partner Membership No.75 3.21) (633.37) (89.37 48.42 150. Profits and Losses and Cash Flows.77 400.96) (192.72 129.29 667.31) 21.67) (26.01) (463.51 43.76) (264.79 342.90 267.85 21.57 1.99 179.86) (2.30 (650.23) 1. 2006 2.10 18.06 (196.71) Year Ended March 31.26) (531.in Million) PARTICULARS Income Operating Income Other Income Total Income Expenditure Materials Consumed Personnel Expenses Operating Expenses General and Administration Expenses Selling and Distribution Expenses Interest Expense Preoperative & Preliminary Expenditure Written Off Depreciation & Amortization of Intangibles Amortization of Goodwill Total Expenditure Profits / (Losses) before Tax Fringe Benefit Tax Deferred Tax Expense Income Tax Expense Net Profits / (Losses) before Prior period & Exceptional Items Exceptional Item (Refer Note 8a in Annexure IV) Prior Period Items Net Profits / (Losses) as per audited financials after eliminating inter company transactions Adjustments on restatement (Refer Note 2 in Annexure IV) Share in profits of an associate company Net Profits / (Losses) as restated Less: Loss transferred to Minority Interest Net Profits/ (Losses) as allocable to shareholders of Fortis Healthcare Limited Profit & Loss Account at the beginning of the year (Refer Note 5 in Annexure IV ) Losses Brought forward from Amalgamating Company (Refer Note 2k in Annexure IV ) Balance Carried Forward as restated Year Ended March 31.67) (236. appearing in Annexure IV.90 693.27) (197.66) (633.76) 28.25 62. as restated under Indian GAAP.32 55.96 386. 2005 737.49 69.21) The above statement should be read with the Notes to the Restated Consolidated Summary Statement of Assets and Liabilities.FORTIS HEALTHCARE LIMITED ANNEXURE III .39 78.97 82.26) Period Ended March 31.53 46. 2002 118.05) 25.37 172.

423. 2003 (200.10) (47.02) (38.11) 3.13 92.35 (95. 180 .87) (11.31) (35.23) 0.64 239.15 (98.70) 863.72) Year Ended March 31.30 (88.08) 342.50 (321.22 8.02 98.13 (18.51 (115.75 (21.79) 82.69) 1.24 1.35 The above statement should be read with the Notes to the Restated Consolidated Summary Statement of Assets and Liabilities.36) (7.95) (143.76) 583.25 0.36 (11.74) (4.67) (23.41 69.55 (3.48 (13.25 9.90 7.88 1. 2004 (68.99) Year Ended March 31. Cash Flows from Financing Activities Proceeds from issuance of share capital (Refer Note (a) below) Proceeds from issuance of share capital/share application money to Minority Interest Proceeds from/(refund of) share application money Proceeds from long-term borrowings Repayment of long-term borrowings Proceeds / (Repayments) of short-term borrowings ( Net) Arrangement fees paid Interest paid Net Cash generated from / (used in) financing activities ( C ) Net changes in cash & cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the year Add: Cash and cash equivalents in respect of Subsidiaries acquired during the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents: Cash on Hand Cheques in hand Balances with Scheduled Banks on Current Accounts Total Year Ended March 31.02 (7.24) 4.15) (0.49 7.80) (6.62 0.86) (444.01) 69.09 1.89) (0.01) (4.53 2.93 10.67) (236.46 0.31) (3.58) 4.67 Year Ended March 31.29 155.129.599.64 0.84 157.23 8.13 1.04) 181.53) 1.83) (98.02 (469.35 0.37) (18. 2002 (236.83 0.33) 2.31 (67.65) (688.96 (54.07 132.79 (254. Profits and Losses and Cash Flows.18) 33.31) 16.71 9.92) (146.19 43.21 (143.08) 232.161.31) (105.44) 62.97) (2.05) 77.43) 7.36 (7.35 7.86) (332.49 (320.64 14.95) 460.18 14. as restated Add: Tax Expense Net profits / (losses) before tax.05 (0.19 (55.24 (124.25 240.97) 113. appearing in Annexure IV.51 14.86 1.41) 43.82 (7.71) (76.43 9.00 (3.93 8.87 (5.30) 269.89 0.59 (82.95) (0.56) (79.10) (3.Particulars A.02) 1.20 540.04 0.06 6.67) 54.89 (151.40 (332.52 165.516.07 0.61) 617. 2006 (582.44) (2.92) (8.98) 0.52 (84.11) (23.03) 95.70 16.07 16.91 5.96 0.14) 2.14 (62.16) Year Ended March 31. 2005 (83.16) 4.64) 87.71) 200. Cash Flows from Operating Activities Net profits / (losses) after tax.62) (509.86 8.37 2. as restated under Indian GAAP.51 8.06 331.80 14.46 87. as restated Adjustment for: Depreciation & Amortisation Loss on sale of fixed assets Provision for Doubtful Debts Bad Debts/Sundry Balances written off Miscellaneous Expenditure written off Foreign Exchange (Gain)/Loss Interest income Interest expense Losses Transferred to Minority Interest Profit on sale of Hospital Land Share in profits of an associate company Operating profits/ (Losses) before working capital changes Movement in working capital: Decrease / (Increase) in sundry debtors Decrease / (Increase) in inventories Decrease / (Increase) in loans and advances Decrease / (Increase) in other current assets Increase / (Decrease) in current liabilities Cash generated from /(used in) operations Direct Taxes Refunded/ (Paid) Net Cash generated from/ (used in) operations (A) B.60 (9.56 (11.77) 78.50) (0.93 (1.26 3.01) (68. Cash Flows from Investing Activities Purchase of fixed assets Proceeds from sale of Fixed Assets Fixed Deposits with Banks Loans to Subsidiaries (Net) Deposits with other companies (Net) (Purchase)/Sale of Investments Interest received Net Cash generated from / (used in) Investing activities (B) C.77 0.95 (252.39) 470.00 0.64) 58.61 (504.44 (508.15) (88.86) (80.27 13.45 2.00 1.82) 10.59 (213.34 35.02 3.55 (32.04) (39.08 (1.70 (77.60) 0.33 2.94 37.95 1.83 415.99) (4.61) 148.18) (29.83) (302.87) 22.52) (19.06 9.14 0.21) 380.05) (200.30) (107.79 43.70) (210.35) 80.81) (22.

2006 Director For and on behalf of the Board of Directors of Fortis Healthcare Limited Company Secretary President Finance 181 . Chartered Accountants Managing Director Per Raj Agrawal Partner Membership No.Notes: (a) Proceeds from issuance of share capital during the year ended March 31.2 million relating to share capital issued for consideration other than cash. has no impact on the Company's cash flows for any of the years.R. 2006 excludes Rs 5. (c) Tax Expense considered above includes the impact of adjustments on restatement & includes current/deferred/fringe benefit tax . 82028 Place: New Delhi Date: September 29. (b) The amalgamation of Fortis Medical Centre Holdings Limited with the Company (Refer Note 2 (k) in Annexure IV) is a non cash transaction and hence.Batliboi & Co. As per our report of even date For S.

liabilities. The results of operations of a subsidiary are included in the consolidated financial statements from the date on which the parent subsidiary relationship comes into existence. issued by ICAI. The difference of the cost to the Company of its investment in Subsidiaries over its proportionate share in the equity of the investee company as at the date of acquisition of stake is recognized as Goodwill or Capital Reserve. v). BACKGROUND Fortis Healthcare Limited (‘FHL’ or the ‘Company’) was incorporated in the year 1996 to set up. (a) SIGINIFICANT ACCOUNTING POLICIES Basis of preparation of Restated Consolidated Summary Statements The Restated Consolidated Summary Statement of Assets and Liabilities. as the case may be. Subsequently. as amended from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act. Subsequent profits of such Associates are not accounted for unless the accumulated losses (not accounted for by the Company) are recouped. in the absence of the contractual obligation on the minorities. the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 (‘the Guidelines’) issued by SEBI on January 19. its subsidiaries and associate (the Company. hereinafter collectively referred to as the ‘Fortis Group’). These audited financial statements of the group entities have been prepared under the historical cost convention. A. PROFITS AND LOSSES AND CASH FLOWS. the share of losses is accounted for only to the extent of the cost of investment. paragraph B(1) of Part II of Schedule II to the Companies Act. manage and operate a chain of multi speciality hospitals and it commenced commercial operations by setting up the Fortis Heart Institute and Multi-speciality Hospital at Mohali in the year 2001. on an accrual basis and in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India (‘ICAI’). together with its subsidiaries and associate. 1956. Where accumulated losses attributable to the minorities are in excess of their equity. iii). for inclusion in its offer document and relate to FHL. B. the Company has set up/taken over the management of various other hospitals in different parts of the country. As far as possible. The carrying amount of the investment is adjusted thereafter for the post acquisition change in the share of net assets of the Associate. 2000. being the best management estimate of its expected useful life. after eliminating all significant intragroup balances and intra-group transactions and also unrealised profits or losses. Their share of net assets is identified and presented in the Consolidated Balance Sheet separately.ANNEXURE IV: NOTES TO THE RESTATED CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES. iv). ii). The excess of cost of investment over the proportionate share in equity of the Associate as at the date of acquisition of stake is identified as Goodwill and included in the carrying value of the Investment in the Associate. AS RESTATED UNDER INDIAN GAAP. Profits and Losses and Cash Flows have been prepared by applying the necessary adjustments to the audited financial statements of the respective group entities. Investments in Associates are accounted for using the equity method. Minorities’ interest in net profit/loss of consolidated subsidiaries for the year is identified and adjusted against the income in order to arrive at the net income attributable to the shareholders of the Company. Subsidiary companies are consolidated on a line-by-line basis by adding together the book values of the like items of assets. income and expenses. These Restated Consolidated Summary Statements have been prepared in accordance with the requirements of AS 21 (Accounting for Consolidated Financial Statements) and AS 23 (Accounting for Investments in Associates in Consolidated Financial Statements) respectively. However. Goodwill is amortized over a period of 10 years. 1992. The Restated Consolidated Summary Statements comply in all material respects with the requirements of: i). on the following basis: i). the same is accounted for by the Holding company. ii). FOR FORTIS HEALTHCARE LIMITED. The Restated Consolidated Summary Statements have been prepared specifically in connection with the proposed IPO of FHL. the consolidated financial statements are prepared using uniform accounting 182 .

depreciation is being provided for as undera. iv) In respect of certain subsidiaries. (45% of the total net block of Fixed Assets of the Fortis Group aggregating Rs 3628. 1956. which was in the process of being set up as at March 31. vi). Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit & Loss Account. Income earned during the construction period is deducted from the total of such indirect expenditure incurred. or at the rates prescribed under Schedule XIV of the Companies Act. The amortization of such license fee will commence once the hospital commences commercial operations. (b) Fixed Assets Fixed assets are stated at cost less accumulated depreciation and impairment losses if any. Boston (USA) is amortized over a period of 3 years from the date of commencement of commercial operations.policies for like transactions and other events in similar circumstances and are presented. Depreciation on fixed assets is provided for on the written down value method as per the rates prescribed under Schedule XIV to the Companies Act. to the extent possible. 2006.61 million as at March 31. (iii) and (iv) below. only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. iii) No amortization is being made in respect of Leasehold Land as these are long term leases. Softwares Cost of Softwares is amortized over a period of 6 years. ii) Depreciation on Leasehold Improvements is provided over the lease period. though incurred by the subsidiary. 5. As regards indirect expenditure on expansion. 183 . Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use. 2006). All direct capital expenditure on expansion is capitalised. in the same manner as the Company's separate financial statements. There are no differences in reporting dates within the Fortis Group. License Fees In respect of one of the subsidiaries of the Company. intangibles denote license fees paid to a registered society for acquiring the right to receive the surplus generated from the operations of a hospital. being the estimated useful life as per the best management estimates.49 million as at March 31. Cost of independent feeder. but ownership of which belongs to Punjab State Electricity Board. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its originally assessed standard of performance. In respect of one of the subsidiaries of the Company. software is amortized over a period of five years (78% of net block of computer software aggregating Rs 16. whichever is higher. (d) Expenditure on new projects and substantial expansion Expenditure directly relating to construction activity is capitalised. is being amortized over a period of 5 years. Indirect expenditure incurred during construction period is capitalised to the extent to which the expenditure is indirectly related to construction or is incidental thereto. (e) Intangibles Technical Know-how Fees Technical Know-how Fees paid to Partner Healthcare System.000 are depreciated fully in the year of purchase. Differences in accounting policies are disclosed separately. depreciation on all fixed assets within the Fortis Group is provided for on Straight Line Method as per the useful lives of the assets estimated by the management. 2006) b. (c) Depreciation i) Except as stated in para (ii) . v) Individual assets not exceeding Rs. 1956.

Operating Income Operating Income is recognized as and when the services are rendered/ pharmacy items are sold. Where the Company is the lessor Assets subject to operating leases are included in fixed assets. where these being immaterial in value terms. 184 . Valued at lower of cost and net realizable value. (g) Leases Where the Company is the lessee Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. except in respect of one of the subsidiaries of the Company. Management fee from hospitals is recognized as per the terms of the agreements with respective hospitals. the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. are recognized as expense in the Profit and Loss Account. the estimated future cash flows are discounted to their present value at the weighted average cost of capital. are charged off to the Profit and Loss Account on purchase. In assessing value in use. Lease income is recognized in the Profit and Loss Account on a straight line basis over the lease term. Pharmacy items and Fuel inventories of Fortis Group aggregating Rs 82.61 million as at March 31. including depreciation. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. Long-term investments are carried at cost. (i) Inventories Inventories are valued as follows: (i) Medical Consumables. (13% of total Medical consumables. iii) A previously recognized impairment loss is increased or reversed depending on changes in circumstances. Costs. ii) After impairment. less estimated costs of completion and costs incurred to make the sale. (h) Investments Investments that are intended to be held for more than a year are classified as Long-term investments. Valued at cost less provision for obsolescence. Net realizable value is the estimated selling price in the ordinary course of business. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.(f) Impairment i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors. The recoverable amount is the greater of the asset’s net selling price and value in use. wherever required. 2006) (ii) Other Consumables. (j) Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. where it is determined on FIFO basis. Cost is determined on Pharmacy Items & Fuel weighted average basis. depreciation is provided on the revised carrying amount of the asset over its remaining useful life. However. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. except in respect of Stores and Spares certain entities within the Group.

are recognized as income or as expenses in the year in which they arise. (l) (m) Foreign Currency Transactions i) Initial Recognition Foreign currency transactions are recorded in the reporting currency. or reported in previous financial statements. Retirement Benefits i) Retirement benefits in the form of Provident Fund/ Pension Schemes are charged to the Profit & Loss Account of the year in which contributions to the respective funds are due.31 million as at March 31. (n) ii) Liability for retirement gratuity and leave encashment is accrued and provided for on the basis of actuarial valuation made at the end of each financial year. iv) Forward Exchange Contracts not intended for trading or speculation purposes The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. deferred tax assets are recognised only if there is virtual certainty that such deferred tax assets can be realised against future taxable profits. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. based on the entitlement of the employees covered under the scheme. 185 . Exchange differences on liabilities relating to fixed assets acquired from outside India are added to the cost of such assets. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. where these are being amortized over a period of five years from the commencement of commercial operations. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Preliminary and pre operative expenses are charged off to the income statement in the year in which incurred. Income Taxes Tax expense comprises current. Non-monetary items that are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. In case the taxable entity has carry forward of unabsorbed depreciation and tax losses. iii) In respect of one of the subsidiaries of the Company. ii) Conversion Foreign currency monetary items are reported using the closing rate.(k) Miscellaneous Expenditure Cost incurred in raising funds (Arrangement fees on Term Loan) is amortised over the period for which the funds are acquired. Unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realised. Superannuation Fund contribution is accounted for on the basis of payments made to the Superannuation Trust being maintained by its erstwhile holding company. by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. except in respect of one of the subsidiaries of the Company. (45% of total miscellaneous expenditure (to the extent not written off or adjusted) of Fortis Group aggregating Rs 2. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contracts is recognized as income or as expense for the year. 2006). deferred and fringe benefit tax. iii) Exchange Differences Exchange differences arising on the settlement of monetary items or on restatement of Company's monetary items at rates different from those at which they were initially recorded during the year.

69) (0.83) (0. income and expenses have been made wherever required.33 0.38) (3.91) (0.05 (2.55 25.94 (0.57 0. 2003 P/e March 31.95 1.05 0.24) 0.24) 1. prepared by Fortis Healthcare Limited.79 0. in Million) Y/e March 31.37 0.51 3.2) 1.94) 0. 2005 Y/e March 31.47 (4.28 0.73 3.54) (28.84) 26. liabilities.96 0. such prior period items have been appropriately adjusted to the respective years to which they relate.55) 1.34 0. For the purpose of this statement. 2006 Adjustments for : Prior Period Items (Refer note b) Discount on sales Purchases Salaries and Wages Professional charges to doctors Reversal of Deferred tax liability created in an earlier year Sub Total Unbilled Revenue from undischarged patients (Refer note c) Provision for Consultancy Fee on undischarged patients (Refer note d) Excess Provisions/Unclaimed Balances written back (Refer note e) Provision for doubtful debts (Refer note f) Provision for doubtful loans and advances (Refer note g) Bad Debts written off (Refer note h) Preoperative / Preliminary expenditure written off (Refer note i) Sub Total Current/deferred tax impact of adjustments (Refer note j) Total (0.06) 25. to bring them in line with the groupings as per the restated unconsolidated summary statements.08 1. in respect of which a reliable estimate can be made.20) (5. in the restated summary statements of the subsidiaries.64 (0.95 2.09) Y/e March 31.06 (32.29 0.02 3. These are reviewed at each balance sheet date and adjusted to reflect the current best management estimates. C.08 0.67 1. certain items of income / expenses were identified as prior period items.79) (1.21 1.82 0. Provisions are not discounted to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. NOTES TO ADJUSTMENTS AND REGROUPINGS IN RESTATED CONSOLIDATED SUMMARY STATEMENTS Material Regroupings Appropriate adjustments by way of reclassification of corresponding items of assets. 186 .52) 0.86 (1.47) 0. 2002 (b) Prior Period Items In the audited financial statements for the years ended March 31.47 (26. (a) Material Adjustments The results of restatements made in the audited financial statements of the entities within the Fortis Group and their impact on the profits / losses of the Group is briefly summarized as under: (Rs.24 0. 2004 Y/e March 31. 1.62 (1.61 0.76 0.(o) Provisions A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation.29 3.28) (26. 2.66 (1.55) (28.30) 0.16 (0.14) (28. 2006 and 2005.

(c)

Unbilled revenue from undischarged patients In one of the subsidiaries, Operating income for the year ended March 31, 2006 included certain revenues relating to services provided by the entity to patients on or before March 31, 2005. For the purposes of this statement, the effect of these revenues has been credited in the period in which these services were provided, with a corresponding reduction in the income for the year ended March 31, 2006.

(d)

Provision for Consultancy fee on undischarged patients In respect of the subsidiary referred to in note c above, operating expenses for the year ended March 31, 2006 included certain expenses on account of consultancy fees paid to doctors pursuant to services provided to patients admitted on or before March 31, 2005. For the purposes of this statement, the effect of these expenses has been debited to the period in which these services were obtained, with a corresponding reduction in the expenses for the year ended March 31, 2006.

(e)

Excess Provisions/Unclaimed Balances Written Back In the audited financial statements for the years ended March 31, 2006, 2005, 2004, 2003 and 2002, certain liabilities created in the earlier years were written back. For the purpose of this statement, the said liabilities, wherever required, have been appropriately adjusted to the respective years in which the same were originally created.

(f)

Provision for Doubtful Debts During the years ended March 31, 2006, 2005, 2004, 2003 and 2002, certain provisions were made for bad and doubtful debts, which pertained to earlier years. For the purpose of this statement, the said provisions, wherever required, have been appropriately adjusted to the respective years in which these debtors were accounted for.

(g)

Provision for Doubtful Loans and Advances During the year ended March 31, 2004, a provision was created for non recoverable Withholding Tax forming part of ‘Advance Tax and Tax Deducted at Source’, out of which some part related to the year ended March 31, 2002. Accordingly, adjustments have been made to the summary statement of profits and losses, as restated, for the years ended March 31, 2004 and March 31, 2002.

(h)

Bad Debts written off During the year ended March 31, 2005, certain debts, which pertained to the year ended March 31, 2004, were written off. For the purpose of this statement, the said provisions have been appropriately adjusted in the years ended March 31, 2005 and March 31, 2004.

(i)

Preoperative / Preliminary Expenditure written off In respect of the Company and one of its subsidiaries, Pre operative and Preliminary expenditure incurred prior to the commencement of commercial operations was accumulated and carried forward at each year end for a write off in the year of commencement of commercial operations. For the purpose of this statement, the said expenses have been appropriately adjusted to the respective years in which these were incurred. Further, the debit balance in profit and loss account as at April 1, 2001, has been adjusted to reflect the impact of expenses incurred prior to March 31, 2001.

(j)

Current/deferred tax impact of adjustments This item denotes Current/deferred tax impact of the adjustments referred to in the above paras.

(k)

Scheme of amalgamation/merger of Fortis Medical Centre Holdings Limited with Fortis Healthcare Limited The scheme of Amalgamation/merger (‘the scheme’) under sections 391 and 394 of the Companies Act, 1956, between Fortis Healthcare Limited (‘the Company’) and Fortis Medical Centre Holdings Limited (‘FMCHL’), with effect from the appointed date i.e. April 1, 2004, was approved by the Hon’ble High court at New Delhi vide its order dated October 7, 2005. The Company filed the Order of the Hon’ble High Court with the Registrar of Companies, NCT of Delhi and Haryana on December 23, 2005.

187

FMCHL was engaged in the business of managing and operating hospitals and as per the scheme of amalgamation, the Company shall continue to carry on the business of managing and operating chain of multi specialty hospitals. In terms of Accounting Standard 14 – Accounting for Amalgamations issued by the Institute of Chartered Accountants of India, the Scheme of Amalgamation was accounted for under the ‘Pooling of Interest Method’, wherein all the assets and liabilities of FMCHL became, after amalgamation, the assets and liabilities of the Company. Pursuant to the Scheme, the business of FMCHL was transferred to the Company on a going concern basis. Accordingly, all the assets, liabilities, rights, licenses, benefits, obligations etc. of the business of FMCHL, as on April 1, 2004, stand transferred to and vested in the Company. As per the Scheme, the Company had allotted to the members of FMCHL 1 (one) equity share of the face value of Rs. 10/-(Ten) each of the Company, credited as fully paid up for every 4 (four) equity shares of Rs. 10/- each held by the members of FMCHL in FMCHL, excepting that the equity shares held by the Company in FMCHL stood cancelled. Accordingly, 520,000 equity shares of Rs. 10/- each fully paid-up aggregating to Rs.5, 200,000/- were allotted by the Company to the members of FMCHL. In terms of the scheme, on transfer of various assets and liabilities of FMCHL to the Company as at the appointed date, following adjustments had been made in the books of account of the Company: (Rs. in Million) 37.61 (7.47) 28.55 1.59 19.21 20.8 Cancellation of Share Capital of FMCHL Share Capital to be issued by the Company to the Members of FMCHL Adjustment arising on amalgamation credited to Amalgamation Reserve The above accounting was given effect to in the audited financial statements for the year ended March 31, 2006 since the Court order approving the scheme was received only on October 7, 2005. However, since the appointed date for amalgamation was April 1, 2004, for the purposes of the summary statement of Assets and Liabilities, Profits and Losses and Cash Flows, as restated, the effect has been considered in the year ended March 31, 2005 and accordingly, assets, liabilities, income and expenses for the year ended March 31, 2005 have been adjusted accordingly. 3. Non – Adjustment Item In respect of the Company, upto financial year 2000-01, earned leave liability of employees was accounted for based on the actual leaves standing to the credit of employees as at the close of the year and retirement gratuity liability was accounted for as per the ‘Payment of Gratuity Act, 1972’. During the year ended March 31, 2002, the Company changed its accounting policy and accounted for the liability for employees’ earned leave and retirement gratuity based on actuarial valuation, in line with Accounting Standard 15, issued by the Institute of Chartered Accountants of India. As a result of this change, the accumulated liability on earned leave and retirement gratuity and the ‘loss’ for the said year was lower by Rs. 3.90 million. For the purposes of this statement, in the absence of relevant information, no adjustment has been made for the liability that may relate to the year ended March 31, 2001. 20.8 5.2 15.6

Net Block of Fixed Assets Net Current Assets Less: Unsecured Loan Total Net Assets Value Add: Loss brought forward from the amalgamating company as on the date of amalgamation i.e. April 1, 2004

188

D. 4.

OTHER SIGNIFICANT NOTES Composition of the Group The list of Subsidiaries and Associates considered in the preparation of the restated consolidated summary statements for Fortis Healthcare Limited (‘FHL’ or the ‘Company’) is as underName of the Group Company Country Incorporation of Proportion of ownership interest as at March 31, 2006 Periods/years considered in preparation of restated consolidated summary statements

a) Subsidiaries Fortis Medical Centre Holdings Limited (Refer Note 2(k) above) India Period from February 14, 2003 to March 31, 2003 and year ended March 31, 2004 Period from March 21, 2006 to March 31, 2006 Period from December 20, 2002 to March 31, 2003, Years ended March 31, 2004, 2005 and 2006 Period from September 29, 2005 to March 31, 2006

Oscar Biotech Limited

India

100.00%

International Hospital Limited (Refer Note (a) below)

India

99.90%

Escorts Heart Institute and Research Centre Limited (Refer note (b) below) b) Associate Sunrise Medicare Private Limited (Refer note (c) below)

India

90.00%

India

5.00%

Period from January 3, 2006 to March 31, 2006

a)

International Hospital Limited (‘IHL’) became a Board Controlled subsidiary of FHL effective December 20, 2002. In March 2006, FHL acquired a majority stake in IHL, resulting in IHL becoming a majority owned subsidiary of FHL.

b) Escorts Heart Institute and Research Centre Limited (‘EHIRCL’) became a subsidiary of the Company effective September 29, 2005. Accordingly, the restated consolidated summary statements of the Fortis Group contain a consolidation of the restated consolidated summary statements of EHIRCL and its following subsidiaries (hereinafter collectively referred to as the ‘Escorts Group’) prepared for the period from September 29, 2005 to March 31, 2006 (‘post acquisition period’): Name of the Company Escorts Heart Centre Limited (EHCL) Escorts Heart and Super Specialty Institute Limited (EHSSIL) Escorts Heart and Super Specialty Hospital Limited (EHSSHL) * Escorts Hospital and Research Centre Limited (EHRCL) Country of Incorporation India India India India % of voting power held by EHIRCL As at March 31, 2006 100.00 82.61 100.00 100.00

* EHSSHL was incorporated on April 24, 2003 and is yet to commence its commercial operations. The Restated consolidated summary statements of the Escorts group for the post acquisition period have been prepared on the following basis• Items of income/expenses, other than for taxation, for the period April 1, 2005 to September 30, 2005 have been subtracted from the corresponding items of incomes/expenses for the year ended March 31, 2006. The resultant figures have been increased by proportionate amounts for two days arrived at by pro-rating items of income/expenses.

189

• c)

Tax expense for the period has been worked out based on the effective tax rate for the year ended March 31, 2006. As a result of the Shareholders’ Agreement dated January 3, 2006 entered into with Sunrise Medicare Private Limited (‘SMPL’) and certain existing shareholders of that entity, the Company has acquired certain rights which confer on it the power to participate in the financial and operating policy decisions at SMPL. Consequently, in the restated consolidated summary statements, the Company has applied the equity method of accounting for investment in SMPL effective such date. Management approved unaudited restated summary statements as at and for the period from January 3, 2006 to March 31, 2006 have been used for the purpose of consolidation.

5.

Reconciliation of Profit & Loss Account as at April 1, 2002 Profit & Loss Account Balance as at April 1, 2002, as per audited financial statements of Fortis Healthcare Limited (Increase)/ Decrease in accumulated losses as at April 1, 2002 as a result of adjustments for Preoperative & Preliminary Expenditure written off Profit & Loss Account Balance as at April 1, 2002, as restated (Rs. in Million) (26.54) (26.54)

6.

Segment Reporting As the Group’s business activity primarily falls within a single business and geographical segment, there are no additional disclosures to be provided under Accounting Standard 17 'Segmental Reporting'.

7. (a)

Related Party Disclosures Names of Related parties Holding Company Associate Key Management Personnel (‘KMP’) Fortis Healthcare Holdings Limited with effect from March 31, 2006. Sunrise Medicare Private Limited, with effect from January 3, 2006 Mr. Harpal Singh - Chairman of FHL and EHIRCL, Director of IHL Mr. Shivinder Mohan Singh - Managing Director of FHL and EHIRCL, Director of IHL Mr. Malvinder Mohan Singh – Director of EHIRCL Mr. N. K. Pandey- EscortsManager of EHIRCL (Lt. Gen.) Harcharan Singh - Director of EHIRCL Enterprises owned or significantly influenced by key management personnel or their relatives SRL Ranbaxy Limited (‘SRL’), Ranbaxy Laboratories Limited (‘RLL’), Ranbaxy Holding Company (‘RHC’) (Related party till FY 2004-05 – Fortis Nursing Education Society (‘FNES’))

(b)

The Schedule of Related Party transactions is as under:

190

2005 - 06 Transaction details

2004 - 05

2005 - 06

2004 - 05

2005 - 06

2004 - 05

2005 - 06

Holding Company

Associate

Key management personnel (KMP)

2004 – 05 Enterprises owned/significantly influenced by KMP/their relatives 24.29 29.19 15.69 0.43 0.10 0.66 0.90 13.46 0.01

Expenses allocated to related parties SRL Ranbaxy Ltd. Fortis Nursing Education Society Ranbaxy Laboratories Limited Sunrise Medicare Pvt. Ltd. Operation and Management Fees Sunrise Medicare Pvt. Ltd. Rent Income Fortis Nursing Education Society Interest Income Sunrise Medicare Pvt. Ltd. Legal and Professional charges Ranbaxy Holding Company Pathology Expenses SRL Ranbaxy Ltd. Ranbaxy Laboratories Limited Purchases of Medical consumables and pharmacy items Ranbaxy Laboratories Limited Managerial Remuneration Key Management Personnel Repair and Maintenance Ranbaxy Laboratories Limited Subscription of Share Capital Fortis Health Care Holding Ltd. Ranbaxy Laboratories Limited Utilisation Charges Received Ranbaxy Laboratories Limited Reimbursement of Expenses Received Ranbaxy Laboratories Limited Upfront Fees Received Ranbaxy Laboratories Limited Licence User Agreement Fees Ranbaxy Holding Compay Balances Outstanding at the year end Loans / Advances recoverable SRL Ranbaxy Ltd. Ranbaxy Laboratories Limited Sunrise Medicare Pvt. Ltd. Other Current Assets Sunrise Medicare Pvt. Ltd. Sundry Debtors Sunrise Medicare Pvt. Ltd. Sundry Creditors Key Management Personnel Ranbaxy Laboratories Limited SRL Ranbaxy Ltd. Investment Sunrise Medicare Pvt. Ltd. Corporate Guarantee for Loans Taken Ranbaxy Holding Company (excluding 2,323,000 shares of Ranbaxy Laboratories Limited pledged for loans)

-

-

0.94 1.04 0.60 -

-

-

-

3,451.80 -

-

-

-

7.74 -

6.85 -

16.29 -

10.98 0.36 15.68

-

-

-

-

-

-

16.35

4.39

-

-

-

-

-

-

6.00

0.93

-

-

-

-

-

-

-

10.50

-

-

-

-

-

-

0.10

-

-

-

20.39 0.49 1.04 5.09

-

-

0.01 -

20.17 0.68 7.20 14.44-

1.48 4.44 4.82 5.71 -

-

-

-

-

-

-

61.93

-

Notes: a) All figures are in Rs Million. b) Details of remuneration paid to key management personnel, if any, is disclosed elsewhere in the notes to accounts. c) Expenses incurred on behalf of / by related parties, and later reimbursed by / to them have not been considered above.

191

(c)

Since AS – 18 on Related Party Transactions as issued by the Institute of Chartered Accountants of India, first became applicable to the Company with effect from the accounting year starting April 1, 2004, hence information for the years ended March 31, 2004, 2003 and 2002 has not been presented in the annexure as referred above. Pursuant to an agreement entered into with a party, FHL had sold Hospital Land and Building situated at Mohali on October 1, 2003 for a total sale consideration of Rs. 600 million. Rs. 107.02 million, being the excess of sale consideration over the written down value of Land & Building as at October 1,2003 had been shown as ‘Exceptional Item’ in the Profit & Loss Account for the year ended March 31, 2004. On sale of the said assets to aforesaid party, various fixtures which were an integral part of the Building (hitherto capitalized under Plant & Machinery and Medical Equipments) but were not part of sales of aforesaid assets, had been transferred to Leasehold Improvements, to be amortized over the period of lease, as per note b below. Hospital Building has been taken on lease for a period of 10 years at Mohali and for a period of 14 years at Amritsar. The Company has also taken few Medical Equipments on operating lease for a period of 7 years. In both cases, the agreements are further renewable at the option of the Company. There is no escalation clause in the respective lease agreements. There are no restrictions imposed by lease arrangements and the rent is not determined based on any contingency. Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. The total of future minimum lease payments under the non-cancelable operating leases are as under: (Rs in Million) Lease payments during the year Minimum Lease PaymentsDue Not later than one year Due Later than one year but not later than five years Due Later than five years 2005-06 69.46 84.50 325.82 194.84 2004-05 57.66 58.00 321.39 162.05 2003-04 29.12 57.63 246.35 294.46

8. (a)

(b)

There being no lease arrangements during the years ended March 31, 2002 and March 31, 2003, no disclosures are required for those respective years. (c) The Company has further sub-leased a part of the Hospital Building to a few service providers. There are no restrictions imposed by the lease arrangements and the rent is not determined based on any contingency. There is no escalation clause in the lease agreements. The details of sublease payments expected to be received under noncancelable subleases as at each year end are as under: (Rs in Million) Sublease payments received for the year Minimum Lease PaymentsDue Not later than one year Due Later than one year but not later than five years Due Later than five years 2005-06 2.22 2004-05 0.28 2003-04 0.70 2002-03 1.03 2001-02 0.64

1.76 6.67 4.51

0.15 0.85 2.43

0.28 0.81 3.43

0.70 4.77 2.11

0.84 4.49 2.63

9.

In respect of the Escorts Group, certain premises have been taken on operating leases that are renewable on mutually agreeable terms. These lease arrangements maybe terminated by either party by giving due notice as specified in the agreement. The Lease rent charged to the Profit and Loss Account on account of these agreements aggregate Rs 8.80 million.

One of the subsidiaries within the Escorts group has given premises on operating leases. Rent income included in the Profit and Loss Account towards such operating leases is Rs 0.80 million. Future minimum lease payments under non-cancellable operating lease contracts are as under(Rs in Million)

192

Minimum Lease PaymentsDue Not later than one year Due later than one year but not later than five years 10.(a) The break-up of deferred tax assets/liabilities is as under:

2005-06 0.72 1.32

Description

As at March 31, 2006

As at As at March March 31, 31, 2005 2004 (Rs in Million)

As at March 31, 2003

(b)

Deferred tax assets on: Expenses debited to Profit and Loss Account and 3.96 0.01 0.01 allowed in subsequent years 30.86 Accumulated losses and unabsorbed depreciation 65.84 Others 0.20 Sub-total 96.90 3.96 0.01 0.01 Deferred tax liabilities on: Accelerated depreciation 41.89 3.49 Others 1.05 Sub-total 41.89 4.54 Net deferred tax assets/(liability) 55.01 (0.58) 0.01 0.01 In accordance with Accounting Standard 22 ‘Accounting for Taxes on Income’, issued by the Institute of Chartered Accountants of India, in view of the losses incurred by FHL during the period ended March 31, 2002 and the years ended March 31 2003, March 31,2004, March 31, 2005 and March 31, 2006 and large amounts of accumulated losses carried forward at the close of the respective years, deferred tax assets on carried-forward losses and unabsorbed depreciation have not been accounted for in the books, since it is not virtually certain whether the Company will be able to utilize such losses / depreciation. In view of substantial reduction in the number of patients visiting the hospital resulting in low revenue and mounting losses, one of the subsidiaries has shut down the hospital operations in Kanpur with effect from August 31, 2005. After the closure of operations, this company is moving into the business of managing the operations of the Cardiac Care Units located at various hospitals across the country, with the view to provide exclusive focus and direction to the said unit for achieving higher efficiency. Based on this new business plan, this company would generate enough revenue to cover up all its brought forward business losses and unabsorbed depreciation. Looking into certainty of future income expected out of new business plan, this company has created deferred tax asset for brought forward losses and unabsorbed depreciation of Rs.17.33 million as at March 31, 2006. Capital Commitments (Rs in Million) Particulars As at March 31, 2006 304.38 As at March 31, 2005 11.31 As at March 31, 2004 389.09 As at March 31, 2003 89.72 As at March 31, 2002 1.67

(c)

11.

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances)

12.

Goodwill appearing in restated consolidated summary statements is after netting off Capital Reserve aggregating Rs 10.31 Million arising on the acquisition of one of the subsidiaries. Further, the carrying value of investment in the Associate includes goodwill aggregating Rs 3.31 million.

193

13.

Contingent Liabilities (not provided for) in respect of : (Rs in Million)
Particulars As at March 31, 2006 404.99 As at March 31, 2005 19.92 As at March 31, 2004 1.04 As at March 31, 2003 4.52 As at March 31, 2002 1.52

(a)

Claims against the Company not acknowledged as debts (in respect of compensation demanded by the patients/ their relatives for negligence). The cases are pending with various Consumer Disputes Redressal Commissions. As per management, these claims are not likely to devolve on the Company due to their frivolous nature. Unredeemed Bank Guarantees executed in favour of lessor as security for hospital land and building taken on lease.

(b)
(c)

13.95

13.95

13.95

-

-

Unredeemed Bank Guarantees executed in favour of Excise and Taxation Department, Mohali for sales tax purposes. (d) Demand raised by New Okhla Industrial Development Authority (e) Corporate guarantee to the Governor of Haryana for the registration of Escorts Limited (f) Others

0.03

0.03

0.14

0.03

0.03

35.00 3.77

8.32 -

8.32 -

-

-

14.

In respect of one of the subsidiaries of the Company, the sales tax department, vide its order dated March 14, 2006 has made a provisional assessment and raised a demand, which has been challenged by the subsidiary before the Honorable High Court of Allahabad by filing a ‘Civil Miscellaneous Writ Petition’. The High Court, vide its order dated May 17, 2006, has set aside the provisional assessment order and the assessing officer has been directed to pass a final assessment order after examining the relevant accounts or records maintained by the entity and also the law laid down by the Supreme Court of India in certain established cases relating to similar issues. Since no further demand has been raised against the entity, it is not possible to quantify the liability which may arise upon reassessment. A Civil suit (‘Civil Suit’) has been filed for declaration and permanent injunction against Escorts Heart Institute and Research Centre Limited (‘EHIRCL’) amongst others in the Hon’ble High Court of New Delhi seeking amongst others(a) declaration that the amalgamation of Escorts Heart Institute and Research Centre, Delhi, a society registered under the Societies Registration Act, 1860 (EHIRCL Delhi) with Escorts Heart Institute and Research Centre, Chandigarh (EHIRCL Chandigarh), a society registered under the Societies Registration Act, 1860 and subsequent incorporation of EHIRCL Chandigarh Society (post amalgamation) into a Company under Part IX of the Companies Act, 1956 (i.e. EHIRCL) is void. (b) seeking a restoration of charitable status of EHIRCL Delhi Society. The High Court, vide its Order dated September 30, 2005 has, however, ordered the parties to maintain status quo as of September 30, 2005. The matter is being duly defended in the Court and is pending before the High Court. Delhi Development Authority (DDA) vide its Order dated October 6, 2005 determined the lease deeds and allotment letters of EHIRCL (‘DDA Order’). EHIRCL has filed an Original Miscellaneous Petition and Civil Suit in the Delhi High Court, seeking a declaration that the DDA Order is illegal and praying for a permanent injunction restraining DDA from dispossessing EHIRC without due process of law. The High Court has granted a stay restraining DDA from recovering physical possession of the property. The matter is pending in Delhi High Court. The Estate Officer of the DDA issued a show cause notice dated November 9, 2005 and initiated eviction proceedings against EHIRCL. The matter is being defended by EHIRCL and the proceedings have been suspended by the Estate Officer in view of the Order in the Letters Patent Appeal (‘LPA’) mentioned below.

15.

194

EHIRCL filed a civil writ petition in the Hon’ble High Court of Delhi challenging the show cause notice issued by Estate Officer, which was dismissed by the Hon’ble Single Judge. EHIRCL thereafter filed LPA against the above order before the Hon’ble Delhi High Court. The Division Bench of the Delhi High Court, while issuing notice to the Estate Officer, passed an interim order in favour of EHIRCL, directing that no final order on eviction can be passed by the Estate Officer. The LPA is pending before the High Court. The Hon’ble High Court of Delhi in March 2004, amongst other hospitals, made EHIRCL a party to a Public Interest Litigation (PIL) filed in July 2002 (Social Jurist matter), concerning the applicability of certain free bed conditions on certain plots of land allotted to EHIRCL by DDA. The PIL is being defended and the matter is pending in the High Court. 16.(a) The Income-tax Authorities carried out a survey in EHIRCL on August 21, 2003 (certain statutory records of the subsidiary were impounded, which are still in possession of the Authorities), regarding amalgamation of Escorts Heart Institute and Research Centre, Delhi (Delhi Society) with a society at Chandigarh with a similar name (Chandigarh Society), and later on registration of the Amalgamated Society as a company. Pursuant to the survey, the Income-tax Authorities have re-opened the assessments of Chandigarh and Delhi Societies. The Deputy Commissioner of Income-tax, Delhi has completed the reopened assessments of the Delhi Society for four assessment years, i.e., assessment years 1997-98, 1998-99, 1999-2000 and 2000-01, wherein, the exemption availed by the erstwhile Delhi Society by virtue of being an approved scientific research organisation has been withdrawn in these years. The past accumulated income upto March 31, 1996 has been brought to tax and the income of the respective years thereafter has been subject to tax as normal business income, hence raising a cumulative demand of Rs.985.90 million (including interest of Rs.526.90 million). The Deputy Commissioner of Income-tax has also assessed the income for assessment year 200102, whereby the entire accumulations and allowances made in earlier years have again been brought to tax, raising a further demand of Rs.1243.70 million (including interest of Rs.694.6 million). The Company is of the view that the demand raised for the assessment year 2001-02 includes duplication on account of demands raised in the assessment years 1997-98 to 2000-01 and, further, the events taking place in the year 2000 cannot relate back to earlier years. EHIRCL has challenged the reopening of assessment for the assessment year 1997-98 before the Delhi High Court in a writ petition filed on July 27, 2005. The Hon’ble Court in its interim order dated September 20, 2005 has directed the assessing officer to complete the assessments for all these years and has also directed that the operation of assessment orders for assessment years 1997-98, 1998-99, 1999-00 and 2000-01 shall remain suspended till the matter is heard and decided by the Court. EHIRCL has filed appeals before the Commissioner of Income –tax (Appeals) for all these years. (b) The Additional Commissioner of Income-tax, Chandigarh, has also raised a demand of tax amounting to Rs. 525.3 million and interest thereon amounting to Rs.291.6 million by treating the excess of assets over liabilities as short term capital gains on registration of the Amalgamated Society as a Company. EHIRCL feels that the above registration does not give rise to transfer of assets and consequent capital gains and, therefore, has preferred an appeal before the Income-tax Appellate Tribunal, Chandigarh, which is pending disposal. Regular assessment under section 143(3) of Income-tax Act, 1961, has been completed for assessment year 2003-04 in the case of EHIRCL, whereby a demand of Rs.42.4 million has been raised. Appeal has been filed before the Commissioner of Income-tax (Appeals) against the disallowances made in the assessment order which is pending disposal. The management is of the view that the eventual outcome of the above matters cannot presently be estimated. 17. Pursuant to a notice under Section 59 of the Delhi Value Added Tax Act, 2004, EHIRCL submitted an application dated September 20, 2005 before the Commissioner of Trade and Taxes (‘Commissioner’), New Delhi for determination of whether it is liable to pay tax under the provisions of the Delhi Value Added Tax Act, 2004 in respect of medicines, diet, drugs, implants, devices, consumables etc., which are administered in the course of treatment of patients. The application was made on the basis that the above items are not marketable commodities and, hence, are not goods. The Commissioner, vide his Order dated March 17, 2006 has held that EHIRCL is liable to pay Value Added Tax (‘VAT’) on the said items. EHIRCL has filed an appeal before the Delhi Value Added Tax Appellate Tribunal against the aforesaid Order of the Commissioner

(c)

195

on April 27, 2006, which is pending for disposal. EHIRCL has, out of an abundant caution, made an estimated provision of Rs.4.80 million in the matter, without considering the items used in composite packages for which no separate bills are raised, although it is of the view that no such liability would arise. Fortis Healthcare Limited has incurred losses of Rs. 276.71 million during the current year and has accumulated losses of Rs 895.67 million as at March 31, 2006 which has resulted in erosion of a portion of the Company's net worth. The cash loss component out of total loss of Rs. 276.70 million is Rs. 203.35 million and includes borrowing cost of Rs. 244.11 million relating to the investment in a subsidiary. The Company has, thus, earned operating profit of Rs. 40.76 million during the current year. Further, the promoters have infused additional funds of Rs 3,451.8 million (approx) into the Company during the financial year. The Company is also planning to raise additional funds through an Initial Public Offer during the coming months. In view of above and the expected improvement in the financial results projected by the management, the accounts have been continued to be prepared on a going concern basis. The expenses shown in the Profit and Loss Account are net of expenses aggregating to Rs 77.20 million during the year 2005-06,Rs. 62.15 million during the year 2004-05, Rs. 40.65 million during the year 2003-04, Rs, 27.35 million during the year 2002-03 and Rs. 1.89 million during the year 2001-02 allocated/ apportioned by the Company to Board controlled Subsidiary Companies, Companies under the same management and to another party with whom the Company has entered into an operations and management agreement, as per estimation made by the management. In the opinion of the Board of the Directors of the Company, the expenses so transferred are attributable to the activities of/services rendered to/availed by these companies / parties. In respect of FHL, Sundry debtors’ balances for Ex-Servicemen Contributory Health Scheme (ECHS) and Serving Defence Personnel of Rs 164.15 million and Rs 4.59 million respectively as at March 31, 2006 remain subject to confirmation. The Company has made the provision for doubtful debts of Rs 3.19 million against the above which, in the opinion of the management, is adequate. EHIRCL takes endowment/keyman insurance policies on the lives of its Chairman, Managing Director and Chief Surgeon, which, from time to time, have been assigned to the assured. The consideration for such assignments is the guaranteed surrender value as certified by Life Insurance Corporation of India. The company has been advised that such surrender value is adequate consideration for the assignments and, on receipt thereof, there is no benefit accruing as remuneration. As FHL had commenced commercial operations effective June 28, 2001, the Profit and Loss Account for the year 2001-02 was prepared for the period from June 29, 2001 to March 31, 2002.

18.

19.

20.

21.

22.

196

17 0.07 4.02 1.75 41.13 5.06 54.52 3.61 28.11 As at March 31.23 51.55 4. as restated under Indian GAAP for Fortis Healthcare Limited. Ltd.13 105.39 1.41 3.17 2.97 9. 2002 Amounts due from promoter group/associate companies International Hospital Limited Fortis Medical Centre Holding Limited SRL Ranbaxy limited Escorts Heart Super Speciality Institute Limited Sunrise Medicare Pvt.13 20. 2005 As at March 31.55 0.29 20.15 2.52 2. 2003 As at March 31.70 98.06 65.23 62.11 28.48 0.91 2. 2006 As at March 31.47 208.86 1.17 12.32 8.92 0.23 217.36 1.17 0.53 1.33 1.ANNEXURE V .82 32.80 0.38 3.95 0. Fortis Financial Services 32.68 0.45 47. 197 .17 2.23 Note:1.01 1.05 80.17 2.15 53.DETAILS OF LOANS AND ADVANCES (Rs.19 2.83 3.96 1.92 65. Considered good Advances recoverable in Cash or in kind Security Deposits Loans to Subsidiaries Inter Corporate Deposits Loans to Employees Advance Tax and Tax deducted at source Considered Doubtful Advances recoverable in Cash or in kind Advance Tax and Tax deducted at source Total Less : Provision for Doubtful advances Total 0.33 12.06 219. 2004 As at March 31.42 2.93 14.47 16.96 1.06 4.47 206.47 18. The above amounts are as per the Restated Unconsolidated Summary Statement of Assets and Liabilities.53 0.83 0.39 12. in Million) Particulars Unsecured.

75 As at March 31.90 7.89 45. 2003 As at March 31.80 0.19 1.03 9. The above amounts are as per the Restated Unconsolidated Summary Statement of Assets and Liabilities. 198 . 2006 As at March 31.45 1. as restated under Indian GAAP for Fortis Healthcare Limited.85 0.ANNEXURE VI .84 0.33 190.06 10.89 0.35 4.26 8. 2002 60.62 0.94 12.13 44.14 9.90 6.45 10.17 5. in Million) Particulars Debts Outstanding for a period exceeding 6 Months Unsecured. 2004 As at March 31.62 3.27 0.64 14.Considered Good Considered Doubtful Less : Provision for Doubtful Debts Total 129.66 3. 2005 As at March 31.69 0.48 5.33 0.09 - Note:1.Considered Good Considered Doubtful Other Debts Unsecured.DETAILS OF SUNDRY DEBTORS (Rs.

800.02 0.090 (Previous years 160) Equity Shares of Rs.10/. International Hospital Limited (4.02 - Note:1. 1.48 5.10/.02 - 450.11 0. 2003 As at March 31.09 - 402.68 6.02 0. 2005 As at March 31.746.each) (Of the above.each) B.ANNEXURE VII .68 0.366 Equity Shares of Rs.100/each) (Of the above.DETAILS OF INVESTMENTS (Rs. 2002 Long Term Investments ( At Cost) Unquoted.889. (509.014.000.02 0.930 Equity Shares are pending registration in the name of the Company .since registered) Oscar Biotech Pvt Limited (45.each) (Of the above.021.800. 2004 As at March 31.300 Equity Shares of Rs.000 Equity Shares of Rs. In Subsidiary Companies Escorts Heart Institute & Research Center Limited (1. The above amounts are as per the Restated Unconsolidated Summary Statement of Assets and Liabilities.40 shares are held by nominee share holders & 200 shares are pending registration in the name of the Company. Further. as restated under Indian GAAP for Fortis Healthcare Limited. 100 shares are held by nominee share holders and 25. fully paid-up A.02 0.746. Trade Sunrise Medicare Pvt Ltd. 3.000 shares are pledged with a Bank as security for term loan).02 0. 2006 As at March 31. in Million) Particulars As at March 31.10/.02 0.000 shares are pending registration in the name of the Company-since registered) Total Aggregate amount of quoted investments Aggregate amount of unquoted investments 5.00 - - - - 6. 199 .02 0.

adjusted by the no. 2003 (2.061.359 69. 5.weighting factor.ANNEXURE VIII . of equity shares is the no.as restated attributable to equity shareholders Weighted average number of equity shares outstanding during the year Diluted Earnings/ (Loss) per share (Rs. 200 .43 85.77) -25% 3. 2002 (4. The time weighting factor is the no.820 74.at the end of the year (excluding preference share capital) Net Asset Value (NAV) per share (Rs.77) (0.Miscellaneous Expenditure not written off or adjusted-Debit balance in Profit and Loss Account.68) -67% 3.11 Year ended March 31.) Diluted Earnings/ (Loss) per share (Rs. 3.92 Period ended March 31. have been considered for the purpose of computing the above ratios.STATEMENT OF ACCOUNTING RATIOS (ON RESTATED PROFITS/LOSSES) Particulars Basic Earnings / (Loss) per share (Rs.)= Net Worth. 2004 (0.074 Year ended March 31.06) -35% 2.06) (1.) Weighted average number of equity shares used for: Basic Earnings/ (Loss) per share Diluted Earnings/ (Loss) per share 85.) = Net Profit/(loss) after Tax.) Return on Net Worth % Net Asset Value per share (Rs.868.as restated attributable to equity shareholders Weighted average number of dilutive equity shares outstanding during the year Return on Net Worth (%) = Net Profit/(loss) after Tax.719. 2005 (1.723.81) (4.) = Net Profit/(loss) after Tax. of equity shares issued during the year multiplied by the time . 2006 (3. These ratios are computed on the basis of restated unconsolidated summary statements of the Company. 2.738 49.605 Ratios have been computed as per the following formula Basic Earnings/ (Loss) per share (Rs. of days during the year.86 Year ended March 31.as restated.126. Earnings per share calculations are in accordance with Accounting Standard 20 "Earnings per Share" issued by the Institute of Chartered Accountants of India.as restated Net Worth.986.72) -52% 7.11 Year ended March 31.166. of equity shares outstanding at the beginning of the year.as restated.430 72.352 78.80) (2.025.957 74. Weighted average no.25) -8% 20. Net profits/(losses).781 78. The figures above are based on the restated unconsolidated financial statements of Fortis Healthcare Limited. as appearing in the restated summary statement of profits and losses of the respective years. Net worth means Equity Share capital + Share Application Money pending allotment + Reserves and Surplus (excluding asset revaluation reserve) .784 50.at the end of the year (excluding preference share capital) Number of equity shares outstanding at the end of year 1.754.658. 4.25) (3.

93 20.14 - - - - - 20.00 - - - - 3. SUB-TOTAL 20. 2004 As at March 31. 2005 As at March 31. (ECB Loan denominated in foreign currency).795.000.00 - - - - - 672.50. medical equipments.53 - - - 295.Punjab or kept at any other hospital site.000 Shares of Ranbaxy Laboratories Ltd (RLL) by Ranbaxy Holding Company (RHC) and also secured by personal guarantee of two Directors of the Company. with an asset cover of 1. computers. Secured by second charge on all present and future fixed assets of the Company on pari passu basis with other lenders and is also secured by Corporate Guarantee from Ranbaxy Holding Company (RHC).Further secured by Corporate Guarantee from Ranbaxy Holding Company covering principal and interest.29 3.000 shares of Escorts Heart Institute & Research Center Ltd.DETAILS OF SECURED AND UNSECURED LOANS SECURED LOANS (Rs.ANNEXURE IX .00 750.(EHIRCL) and also secured by personal guarantee of two Directors of the Company. Secured by Second charge by way of hypothecation over movable Fixed Assets of the company and further secured by pledge of 7.90 250.00 - - - - 500.79 - - - - 41. Mohali and is also secured by Corporate Guarantee from Ranbaxy Holding Company (RHC).800. SUB-TOTAL TERM LOANS LONG TERM LOANS FROM BANKS Secured by first charge by way of hypothecation of all present and future moveable properties of the company which inter alia include plant and machinery. 2002 I) A 1 2 3 II) A) 1 2 3 4 5 6 WORKING CAPITAL LOANS FROM BANKS Secured by first charge on current assets both present and future of the Company situated at Fortis Hospital. NO Particulars As at March 31. Secured by pledge of 1. in Million) S. Working Capital Demand Loan / Bank Overdraft Secured by first pari passu hypothecation charge over present and future current assets of the Company.29 201 . furniture and fixtures and other fixed assets installed / stored at Mohali.53 - - - 61.00 672.12 327.12 327.35 times.90 - - - - - 250. Secured by way of first charge of all present and future fixed assets of the company ( excluding vehicles hypothecated against specific loans) Secured by first charge on a pari-passu basis over the present and future fixed and movable assets of the company(excluding assets of the hospital at Mohali charged for working capital facilities from a bank and vehicles hypothecated against specific loans Secured by first pari-passu charge over the present and future fixed assets and movable assets (excluding those charged for working capital facilities) of the hospital at Mohali.00 - - - - - 750. 2006 As at March 31. 2003 As at March 31.

SUB-TOTAL VEHICLE LOANS Secured by hypothecation of respective vehicles SUB-TOTAL GRAND TOTAL - - - - 150. 2) Interest on Term Loans from banks was payable in the range of 13% to 13. 8) Interest on Unsecured Loans from Subsidiaries was payable at the rate of 10% per annum both for the years ended March 31. 11%.49 679.00 7.007.23% to 8.27% and 4. 2002.36 7. 2005 and 2006 respectively. 11% to 11. 11% to 13. 2006.16% per annum for the year ended March 31. 2006 - As at March 31. 2003.21 2. 2002 - 1 2 III) 1 FROM BANKS Secured by first charge over current assets of the Company and further secured by guarantee from Ranbaxy Holding Company.78%.09 2.5% to 12%. 2005 As at March 31.87 2.21 90. 8. NO A 1 2 Particulars As at March 31.573.44 690.5% to 10%.36 7.87 Notes: 1) Interest on Overdraft Facility/ Working Capital Demand Loans was payable in the range of 8.Housing Development Finance Corporation Ltd. 2005 As at March 31.000 shares of Ranbaxy Laboratories Limited (RLL) by Ranbaxy Holding Company (RHC).36% for the years ended March 31.B) SHORT TERM LOANS As at March 31. Secured by second charge over the present and future fixed Assets of the company and present and future fixed and movable assets of International Hospital Limited (a subsidiary company) and further secured by guarantee from Ranbaxy Holding Company. 2002 - B C D From Banks Obtained on Personal Guarantee of Managing Director Obtained by pledge of 1. 2003 100. 2004. 9) The above amounts are as per the Statement of Assets and Liabilities. 9.863. 2006 300.78 UNSECURED LOANS (Amounts in Rs. per annum for the years ended March 31.00 As at March 31.27% to 6.04 3. 4) Interest on Vehicle Loans was payable in the range of 11%.50 46.71 0. 2003.00 300. 2002. 202 . 6.5% to 10.5% to 11% per annum for the year ended March 31.26 253.64 3.00 - 6.3% to 4. 2002 and 2003. 7) Interest on Unsecured Loans from a Body Corporate was payable in the range of 7% to 11% per annum for the year ended March 31.42%. 2003 As at March 31.5% to 10%. 5) Interest on Unsecured Loans from Banks was payable in the range of 8. 7. 2006.21 350. 3) Interest on Short Term Loans from banks was payable in the range of 10% to 11% per annum for the year ended March 31. per annum for the years ended March 31. 2004 and March 31. Million) S.04 6. as restated of Fortis Healthcare Limited.44 - 44. 6) Interest on Unsecured Loans from a Financial Institution was payable at the rate of 10% per annum for the years ended March 31. 2004. From a Body Corporate From Subsidiaries TOTAL 90. 2004 As at March 31.26 250. From a Financial Institution. 2005 and 2006 respectively.70 0.5%.00 As at March 31. 2005 and 2006 respectively. 2004. 10% to 11. 2003.36 1. 2005 and 2006 respectively.5%.26 3.49 7. Foreign currency Loan carries interest in the range of 3. 2004 - As at March 31. 11%.67%.70 2.

52 Year Ended March 31.53 13. as restated and the adjustments have been listed separately. The same have been shown gross of restatement in the summary Statement of Profits & Losses.02 14.91 Year Ended March 31. 2004 4.52 (195.45 22. 2004 22. 2003 13. the percentages have not been shown.63 0.44 1.91 1.65) -* Year Ended March 31.69 1.65 1.25 (236.ANNEXURE X .03 Year Ended March 31.DETAILS OF OTHER INCOME (Rs.50) -* Year Ended March 31.52 Rehabilitation Centre Rent Interest Exchange gain Miscellaneous Income Total Notes : Recurring Recurring Recurring NonRecurring Recurring (i) * Since there is a net loss before tax. 2005 25.54 1. 2002 0.03 7.52 (83. 203 .82 25.71 12. 2006 21. 2003 3. in Million) Period Ended March 31. 2005 4. (iii) The classification of other income as recurring/non-recurring and related/not related to business activity is based on the current operation and business activity of Fortis Healthcare Limited as determined by the management. as restated after prior period and extraordinary items Percentage Source of other income Year Ended March 31. 2002 3. as restated.70 2.03 (57.91 (274.26 6. (iv) The above amounts are as per the Restated Unconsolidated Summary statement of Profits and Losses of Fortis Healthcare Limited. (ii) The details of ''Other Income'' disclosed above are stated after adjusting the effect of restatement.21 21.80 3.74 3.38 0.41) -* Period Ended March 31.25 Year Ended March 31.27 1.67) -* Related/N ot related to Business activity Related Related Non Related Related Related PARTICULARS Year Ended March 31. 2006 9.49) -* Nature Other income Net Profits/(Losses) before tax.74 4.71 1.

97 0. 4.16 1.252.04 15.60 (895. 4) Long term debt/equity :.00 2.2006.429. 2006 (Rs.67) 3. 3) Reserves represent reserves arising out of amalgamation of Fortis Medical Centre Holdings Limited with the Company.12 204 .700.00 10.600. 6) The above amounts are as per the Restated Unconsolidated Summary Statement of Assets and Liabilities of Fortis Healthcare Limited.79 4. 2) Long Term debt represents debt other than short term debt as defined above. in Million) Pre Issue Post Issue Borrowings Short Term Debt Long Term Debt Total Debts Shareholders' funds Equity Share Capital 1% Non Cumulative Redeemable Preference Share Capital Share Application money pending allotment Reserves & Surplus Profit & Loss Account (Debit Balance) Total shareholders' funds Long Term debt/equity ratio Notes: 1) Short Term debt represents debts which are due within twelve months from 31st March.CAPITALISATION STATEMENT AS AT MARCH 31.ANNEXURE XI .Long Term Debt / Total Shareholder's funds 5) Shareholders' Funds considered above include Share Application Money pending allotment.657.37 404.

72 (107.40 (253.61) (302.40 2.68 5.25 13.79) (22.83 3.79 24.43) Notes to the tax shelter statement 1.77) (82. as restated.15 23.08 3.84 (25. 2004 vide scheme of amalgamation dated October 7.02 2. 2006 (276.02 (20. 2004 (57. The aforesaid Statement of Tax Shelters has been prepared as per the Restated Unconsolidated Summary Statement of Profits and Losses.03 35. the working above is subject to any changes which maybe made between the date of this statement and the date of filing the income tax return with the income tax authorities. Fortis Medical Centre Holdings Limited ("FMCHL") (an erstwhile Board controlled subsidiary) got merged with the Company effective April 1.25 2.84) (84.55) Year ended March 31.47) 3. 3.55 3.08) 21.60) 2.39) 5. The figures for the year ended March 31.51) 154.02) (104.72 (2.14) 2.41) 35.18 (160.97) 1.STATEMENT OF TAX SHELTER (Rs. of Fortis Healthcare Limited.75% 35.Disallowances made by the tax authorities on account of assessments. 4.88% (20.15 34.30) (36.50 1. in Million) Year ended Year ended March 31.80 (109. For the same reason.10) 1.30) Year ended March 31.49) 2. 2004.56 (24. have been adjusted to losses of the respective years to which they pertain.ANNEXURE XII .87) 2. proceedings etc. Since the Company is yet to file the income tax return for the said financial year.58) 0. The Company is yet to file a revised return for AY 2005-06 and accordingly the loss of FMCHL for the said assessment year is not included in the figure of restated loss considered above.67 (6. the above statement also does not take into consideration the brought forward losses of FMCHL as on April 1. The permanent/timing differences have been computed considering the acknowledged copies of the income-tax returns filed by the Company for each of the respective years presented in the above statement.05) 0.27) (351.40 (119.94) Net Profit/(Loss) before tax as restated (a) Income tax rates applicable Tax at notional rates Income tax provision in books Permanent Differences Expenses disallowed Pre operative Expenditure written off disallowed Profit on sale of hospital land & building considered separately Total (b) Temporary Differences Difference between tax depreciation and book depreciation Provision for doubtful debts & advances Provision for Retirement Benefits Other disallowances Total (c ) Losses adjusted against Capital Gains/Income from Other Sources (d) Net adjustments (e=b+c+d) Business losses carried forward for set off in subsequent years (f=a+e) Year ended March 31. 205 . March 31.62 5.70% (71.01) (106.96 3. 2005 (59. 2006 are based on the provisional computation of total income prepared by the Company.32) 2.13 (115. 2003 2002 (195. 2.95 0.49) (236.67) 36.98 (32.78) 36. 2005 sanctioned by the High Court at Delhi.59% (21.78 (150.70) 33.66% (93.

Batliboi & Co Chartered Accountants Per Raj Agrawal Partner Membership No: 82028 Place: New Delhi Date: September 29. 1961 and Wealth Tax Act. Dear Sirs. each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. Hence. explanations and representations obtained from the Company and on the basis of their understanding of the business activities and operations of the Company. The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. We do not express any opinion or provide any assurance as to whether: i) the Company or its share holders will continue to obtain these benefits in future. or ii) the conditions prescribed for availing the benefits have been / would be met with. Fortis Healthcare Limited. which based on business imperatives the Company faces in the future. the ability of the Company or its shareholders to derive the tax benefits is dependent upon their fulfilling such conditions. Statement of Possible Tax Benefits available to the Company and its shareholders We hereby report that the enclosed statement states the possible tax benefits available to the Company and to the shareholders of the Company under the Income Tax Act. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute.2006 206 . the Company may or may not choose to fulfill. presently in force in India. Escorts Heart Institute & Research Centre. New Delhi – 110 025.STATEMENT OF TAX BENEFITS Auditor’s Report The Board of Directors.R. 1957. Okhla Road.ANNEXURE XIII . The contents of the enclosed statement are based on information. In view of the individual nature of the tax consequences and the changing tax laws. For S.

long term capital gains of a company shall be taken into account in computing tax payable under section 115JB. copyright.2 Under Section 32 of the Act. on their entire income including income from investment in the shares of the company. plant and machinery. public financial institutions or mutual funds registered under the Securities and Exchange Board of India (SEBI) or authorized by the Reserve Bank of India are eligible for exemption from income-tax. etc. as per Finance Act 2006. long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company (i. e) Under Section 54EC of the Act. 1. if acquired after March 31. know-how. shall be exempt from tax.3 Under section 80-IB of the Act. it may not choose to fulfill. However.1 To the Company . The credit is available for set off only when tax becomes payable under the normal provisions and that tax credit can be utilized to set-off any tax payable under the normal provisions in excess of MAT payable for that relevant year.1 a) To the Members of the Company – Under the Income Tax Act Resident Members Under Section 10(34) of the Act. the Company can claim depreciation allowance at the prescribed rates on tangible assets such as building. which based on business imperatives it faces in the future. MAT credit in respect of MAT paid prior to AY 2007-08 shall be available for set-off upto 5 years succeeding the year in which the MAT credit initially arose. Hence.e. if the capital gain are invested within a period of six months from the date of transfer in the bonds redeemable after three years and issued by – 207 . as per Finance Act 2006 MAT credit for MAT paid for AY 2007-08 or thereafter shall be available for set-off upto 7 years succeeding the year in which the MAT credit initially arose. Several of these benefits are dependent on the Company or its Shareholders fulfilling the conditions prescribed under the relevant tax laws. 2. profits of an undertaking deriving profits from the business of operating and maintaining a hospital in rural area. subject to the conditions specified therein. the Securities Transaction Tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of the business would be eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions. However. 2. d) As per the provisions of Section 10(23D) of the Act. all mutual funds set up by public sector banks. Finance Act 2006 has introduced section 80AC which provides that no deduction under section 80-IB shall be allowed if the return is not filed on or before the due date. furniture and fixtures. any income by way of dividends referred to in Section 115O (i. trademark. distributed or paid on or after April 1. However. 1. 2006.STATEMENT OF TAX BENEFITS The tax benefits listed below are the possible benefits available under the current tax laws in India.4 In terms of Section 115JAA (1A) of the Act tax credit shall be allowed for any Assessment Year commencing on or after April 01. The following tax benefits shall be available to the Company and the prospective shareholders under Direct Tax. etc. 1961 (the Act) Under section 10(34) of the Act. Credit eligible for carry forward is the difference between MAT paid and the tax computed as per the normal provisions of the Act. the ability of the Company or its Shareholders to derive the tax benefits is dependent upon fulfilling such conditions. subject to the conditions and to the extent specified therein. 1998 1.Under the Income-tax Act. and intangible assets such as patent. 1. income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income-tax in the hands of the shareholders. b) Under Section 10(38) of the Act. 1. dividends declared. capital gain arising from transfer of long term capital assets [other than those exempt u/s 10(38)] shall be exempt from tax. 2003 by domestic companies) received on the shares of any company is exempt from tax. licenses. c) In terms of Section 88E of the Act. which is chargeable to Securities Transaction Tax. is eligible for 100% deduction for first five years subject to conditions specified in that section.e. capital asset held for the period of more than twelve months) entered into in a recognized stock exchange in India and being such a transaction.

h) Under Section 112 of the Act and other relevant provisions of the Act. the amount so exempted shall be chargeable to tax subsequently. shall be taxed at a rate of 20% (plus applicable surcharge and educational cess on income-tax) after indexation as provided in the second proviso to Section 48 or at 10% (plus applicable surcharge and educational cess on income-tax) (without indexation). capital gain arising from transfer of long term capital assets [other than those exempt u/s 10(38) of the Act] shall be exempt from tax. However. or Rural Electrification Corporation Limited (‘RECL’). subject to the conditions and to the extent specified therein. a company formed and registered under the Companies Act. will be exempt if the net sales consideration from such transfer is utilized for purchase of residential house property within a period of one year before or two year after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.2 Non Resident Indians/Members other than Foreign Institutional Investors and Foreign Venture Capital Investors By virtue of Section 10(34) of the Act.(i) (ii) National Highways Authority of India (‘NHAI’) constituted under Section 3 of National Highways Authority of India Act. income earned by way of dividend income from a domestic company referred to in Section 115-O of the Act. where in the case of an individual or HUF capital gain arise from transfer of long term assets [other than a residential house and those exempt u/s 10(38) of the Act] then such capital gain. if the new bonds are transferred or converted into money within three years from the date of their acquisition. is exempt from tax in the hands of the recipients. 2. In terms of Section 88E of the Act. in computing the capital gains arising from transfer of shares of the company acquired in convertible foreign exchange (as per exchange control regulations). 1956 and notified by the Central Government in the Official Gazette for the purpose of this section. or Rural Electrification Corporation Limited (‘RECL’). 1988 and notified by the Central Government in the Official Gazette for the purpose of this section. shall be exempt from tax. long term capital gains [not covered under Section 10(38) of the Act] arising on transfer of shares in the Company. Cost indexation benefits will not be available in such a case. f) Under Section 54F of the Act. being an equity share in a company which is subject to Securities Transaction Tax will be taxable under the Act @ 10% (plus applicable surcharge and educational cess). If only a part of the net consideration is so reinvested. the Securities Transaction Tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of the business would be eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions. at the option of the Shareholders. 1988 and notified by the Central Government in the Official Gazette for the purpose of this section. subject to the conditions and to the extent specified therein.e. if shares are held for a period exceeding 12 months. If only part of the capital gain is so reinvested. in case of a non resident. Under the first proviso to section 48 of the Act. the exemption shall be proportionately reduced. Under Section 10(38) of the Act. if the capital gain are invested within a period of six months from the date of transfer in the bonds issued by – a) b) c) d) e) (i) (ii) National Highways Authority of India (‘NHAI’) constituted under Section 3 of National Highways Authority of India Act. and 208 . Under Section 54EC of the Act. g) Under Section 111A of the Act. which is chargeable to Securities Transaction Tax. a company formed and registered under the Companies Act. long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company or unit of an equity oriented mutual fund (i. the exemption shall be proportionately reduced. capital gains arising from transfer of short term capital assets. capital asset held for the period of more than twelve months) entered into in a recognized stock exchange in India and being such a transaction. 1956 and notified by the Central Government in the Official Gazette for the purpose of this section. protection is provided from fluctuations in the value of rupee in terms of foreign currency in which the original investment was made.

subject to the conditions and to the extent specified therein. purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from. Under Section 10(38) of the Act. Taxation of Income from investment and Long Term Capital Gains [other than those exempt u/s 10(38)] g) h) i) (i) A non-resident Indian. shall be exempt from tax. an individual being a citizen of India or person of Indian origin has an option to be governed by the special provisions contained in Chapter XIIA of the Act. are exempt from tax in the hands of the institutional investor. The amount so exempted shall be chargeable to tax subsequently. long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company (i. i. where shares in the company are subscribed for in convertible Foreign Exchange by a non-resident Indian. capital gains arising from transfer of short term capital assets.e.If only part of the capital gain is so reinvested. the amount so exempted shall be chargeable to tax subsequently. the exemption shall be proportionately reduced. However.e. the exemption shall be proportionately reduced. will be exempt if the net sales consideration from such transfer is utilized for purchase of residential house property within a period of one year before or two year after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer. capital gains arising to the non resident on transfer of shares held for a period exceeding 12 months shall [in cases not covered under Section 10(38) of the Act] be concessionally taxed at a flat rate of 10% (plus applicable surcharge and educational cess) without indexation benefit but with protection against foreign exchange fluctuation under the first proviso to Section 48 of the Act. In such a case the tax on investment income and long term capital gains would be computed as per normal provisions of the Act. “Special Provisions Relating to certain incomes of Non-Residents”. 2. long term capital gains [not covered under section 10(38) of the Act] arising to a non-resident Indian from the transfer of shares of the company subscribed to in convertible Foreign Exchange shall be exempt from income tax if the net consideration is reinvested in specified assets within six months of the date of transfer. Under Section 115E of the Act. the exemption shall be proportionately reduced.3 a) Foreign Institutional Investors (FIIs) By virtue of Section 10(34) of the Act. being an equity share in a company which is subject to Securities Transaction Tax will be taxable under the Act @ 10% (plus applicable surcharge and educational cess). f) Under Section 54F of the Act.e. where in the case of an individual or HUF capital gain arise from transfer of long term assets [other than a residential house and those exempt u/s 10(38) of the Act] then such capital gain. shall be taxed at applicable rates. (ii) (iii) Under provisions of section 115F of the Act. which is chargeable to Securities Transaction Tax. if shares are held for a period exceeding 12 months. long term capital gains [not covered under Section 10(38) of the Act] arising on transfer of shares in the Company. Under Section 111A of the Act. if the new bonds are transferred or converted into money within three years from the date of their acquisition. (iv) Under provisions of Section 115-G of the Act. (v) Under Section 115-I of the Act. Under Section 112 of the Act and other relevant provisions of the Act. if the specified assets are transferred or converted within three years from the date of their acquisition. capital asset held for the period of more than twelve months) entered into in a recognized stock exchange in India and being such a transaction. income earned by way of dividend income from another domestic company referred to in Section 115-O of the Act. a non resident Indian may elect not to be governed by the provisions of Chapter XII-A of the Act for any assessment year by furnishing his return of income under section 139 of the Act declaring therein that the provisions of the Chapter shall not apply to him for that assessment year and if he does so the provisions of this Chapter shall not apply to him. i. If only a part of the net consideration is so reinvested. If only part of the net consideration is so reinvested. b) 209 . it shall not be necessary for a non-resident Indian to furnish his return of income if his only source of income is investment income or long term capital gains or both arising out of assets acquired.

Wealth Tax Act. set up for raising funds for investment in a Venture Capital Undertaking. c) 210 . 1957. or Rural Electrification Corporation Limited. Notes: a) b) All the above benefits are as per the current tax law and will be available only to the sole/ first named holder in case the shares are held by joint holders. hence. Under Section 115AD capital gain arising on transfer of long term capital assets. In view of the individual nature of tax consequence. income of Venture Capital Company which has been granted a certificate of registration under the Securities and Exchange Board of India Act. a company formed and registered under the Companies Act. In respect of non-residents. wealth tax is not leviable on shares held in a company. if the new bonds are transferred or converted into money within three years from the date of their acquisition. are taxed at the rate of 10% (plus applicable surcharge and education cess).4 Venture Capital Companies / Funds As per the provisions of section 10(23FB) of the Act. Under Section 54EC of the Act. 3. the Securities Transaction Tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of the business would be eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions. 1988 and notified by the Central Government in the Official Gazette for the purpose of this section.c) In terms of Section 88E of the Act. Under Section 111A of the Act. the benefit of indexation. being shares in a company (other than those mentioned in point b) above). 1992 and fulfilling such conditions as may be notified in the Official Gazette. capital gain arising from transfer of long term capital assets [other than those exempt u/s 10(38) of the Act] shall be exempt from tax. being an equity share in a company which is subject to Securities Transaction Tax will be taxable under the Act at the rate of 10% (plus applicable surcharge and educational cess). 1957 Shares in a company held by a shareholder will not be treated as an asset within the meaning of Section 2(ea) of Wealth-tax Act. and Venture Capital Fund. subject to the conditions and to the extent specified therein. However. operating under a registered trust deed or a venture capital scheme made by Unit Trust of India. the exemption shall be proportionately reduced. 1992 and notified as such in the Official Gazette. taxability of capital gains mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement. capital gains arising from transfer of short term capital assets. In other words. direct or indirect. the amount so exempted shall be chargeable to tax subsequently. each investor is advised to consult his/ her own tax adviser with respect to specific tax consequences of his/ her participation in the scheme. which has been granted a certificate of registration under the Securities and Exchange Board of India Act. Such capital gains would be computed without giving effect to the first and second proviso to Section 48 of the Act. if the capital gain are invested within a period of six months from the date of transfer in the bonds issued by – d) e) f) (i) (ii) National Highways Authority of India (‘NHAI’) constituted under Section 3 of National Highways Authority of India Act. if any between India and the country in which the non-resident has fiscal domicile. as mentioned under the two provisos would not be allowed while computing the capital gains. If only part of the capital gain is so reinvested. 1956 and notified by the Central Government in the Official Gazette for the purpose of this section. is exempt from income tax. 2.

Consolidated financial information of the Company 1. 2004. The Company had no other class of shares during these years. 211 . ii. which have been examined by other auditors whose reports have been furnished to us and our confirmation. iii. There were no qualification in the auditors’ reports on the consolidated financial statements for the financial years ended on March 31. insofar as it relates to the amounts in respect of these subsidiaries. annexed to this report. the holding company. 2003. Paragraph B (1) of Part II of Schedule II to the Companies Act. 2002.note 15 in Annexure III. There are no extraordinary items which are required to be disclosed separately in Summary Statements. attached to this report: i. 2004 and 2005. ii. as stated in note 2(a) in Annexure III. 2005 and 2006 (Annexure-I) and the accompanying Statement of Adjusted Consolidated Profits and Losses of the Company and its subsidiaries for the financial years ended on March 31. which has been prepared in accordance with the requirements of: i. We have examined the consolidated financial information of Escorts Heart Institute and Research Centre Limited (the Company) and its subsidiaries. 2002. and . We have examined the following consolidated financial information relating to the Company. The qualifications in the auditors’ report on the consolidated financial statements for the year ended March 31. no dividend has been paid by the Company in respect of each of the financial years ended on March 31. 2005 and 2006 on the equity shares. except in respect of the qualifications.note 16 in Annexure III. and iv. 2003. iii. Based on our examination of these Summary Statements. 4. is based solely on the reports of these auditors. 2. 3. The matters are pending in appeals at various stages. the effect of which cannot presently be quantified and which have been stated in paragraph 3 below. Material amounts relating to adjustments for the previous years have been identified and adjusted in arriving at the consolidated profits/losses for the years to which they relate irrespective of the year in which the event triggering the consolidated profit or loss occurred. 2005 and 2006 (Annexure-II) (Summary Statements). We have not examined the restated financial statements of Escorts Heart Centre Limited and Escorts Hospital and Research Centre Limited. 2002. for want of necessary information for prior years. The changes in accounting policies which required adjustments to arrive at the Summary Statements have been carried out [refer to note 2(b) in Annexure III] except for a change in recognizing unbilled revenue with effect from financial year ended on March 31. The instructions received from the Company. The significant accounting policies followed and notes pertaining to the Summary Statements. duly approved by the Board of directors and audited by us. we confirm that: i. 1956 (the Act). 2003. and The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. We have examined the attached Statement of Adjusted Consolidated Assets and Liabilities of the Company and its subsidiaries as at March 31. We further report that as per the books and records produced to us. 1992. These Summary Statements have been extracted by the Company from the consolidated financial statements of the Company and its subsidiaries for the respective periods. 2004. 2003. Statement of Adjusted Cash Flows. enclosed as Annexure-III. We are unable to express an opinion at this stage in these matters. the eventual outcome of which cannot presently be estimated. ii. which sets out in details the position of land under leasehold arrangements with Delhi Development Authority. requesting us to examine the consolidated financial information referred to above in connection with the proposed initial public offer of equity shares by Fortis Healthcare Limited. 2004. 2002. enclosed as Annexure-IV.62 millions (net of demands raised twice in respect of certain years) raised by the Income-tax Authorities. which sets out in details the position with regard to certain demands aggregating Rs.AUDITORS’ REPORT The Board of Directors Escorts Heart Institute and Research Centre Limited Okhla Road New Delhi . 2000 (‘the SEBI Guidelines’) issued by the Securities and Exchange Board of India (‘SEBI’) and amendments made thereto from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act. 2004. 5. 2006 have been adjusted in that year [refer to note 8(a)(i) in Annexure III]. Attention is invited to: .110025 Dear Sirs.2060.

This report is intended solely for your information and for forwarding it to Fortis Healthcare Limited. Ferguson & Co. Chartered Accountants J. for the purpose of inclusion in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose without our prior written consent. 2006. 2006 212 . vi. enclosed as Annexure-VII. Summary of accounting ratios based on the adjusted profits relating to earnings per share. Statement of Tax Shelter. For A. the holding company. 6. Seth (Partner) Membership No. Statement of Capitalisation as at March 31.iii.M.17055 Place: New Delhi Date: September 29. iv. v. The details of transactions with the related parties in accordance with the Accounting Standard 18 – Related Party Disclosures issued by the Institute of Chartered Accountants of India (refer to note 19 in Annexure-III). F. enclosed as Annexure-V. enclosed as Annexure-VI. net assets value and return on net worth.

85 247.27 468.603.858.71 0.742.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED .74 26.26 253.38 1.65 219.66 190.22 218.89 501.58 520.88 1.64 42.918.38 2. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 213 .00 398.152.68 336.80 4.49 1.53 53.594.018.757.93 20.758.74 67.60 20. Reserves and surplus Total Less: Miscellaneous expenditure to the extent not written-off or adjusted Net worth 20.816.32 1.45 428.684.31 2.24 2005 As at March 31.93 3.440.71 1.CONSOLIDATED ANNEXURE . F.87 1.I STATEMENT OF ADJUSTED CONSOLIDATED ASSETS AND LIABILITIES (Rs.63 42.26 1.73 113.792.78 555.575.71 9.45 1.00 1.00 1.51 142.221.32 2.95 2.22 468.10 44.80 1.45 1. 2004 2003 2002 B C D E Project and pre-operative expenditure pending allocation Investments Deferred tax assets (net) (Refer to note 8 in Annexure III) Current assets.31 1.832.319.91 501.42 597.647.19 502.31 0.61 1.85 For A. Share Capital 2.14 112. Chartered Accountants J.05 3.45 1.75 3.00 1.86 1.76 30.793. in millions) Particulars 2006 A Fixed assets Gross block Less: Depreciation Net block Add: Capital work in progress Total 3.25 165.75 2.64 20.71 1.210.71 285.02 35.30 1.00 475.890.44 47.00 1.12 33.49 662.21 26.22 77.Total (A+B+C+D+E-F-G) Represented by 1.M.24 20.43 1.16 307.594.24 46.773.04 1.16 1.68 230.64 129.25 14.832.60 62.85 F Liabilities and provisions Secured loans Unsecured loans Current liabilities and provisions In-patient advances Total G H I Minority Interest Net worth .85 828.31 1.24 2.65 523.51 248.432.12 1.59 172.232. loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Other current assets Total 1.023.99 25.08 1.47 79.40 719.16 53.92 909.97 992.02 1.595.05 1.88 25.64 1.90 1.01 45.14 428.70 726.00 1.401.55 401.792.37 18.93 43.417.88 1.84 34.08 25.878.876.836.762.37 457.64 1. Ferguson & Co.40 44.02 1.428.383.17055 Place: New Delhi Date: September 29.30 494.876.101.57 60.64 32.93 32. Seth (Partner) Membership No.758.59 491.

62 2.01 62.62 5. Ferguson & Co. F.53 29.38) (7.26 42.51 (127.18 Year ended March 31.922.46 (5.75 1.67) - 30.Deferred tax (charge) / benefit (56.II STATEMENT OF ADJUSTED CONSOLIDATED PROFITS AND LOSSES (Rs.29 6.87 49.04 1.02 (84.82 1.75 58.32 2.03 1.91 65.26 246.81) (70.57 295.38 163.67) (84.847.59 140.99 73.04 2.49 79.44 120.04) 42.99 223.913.00 388.38 143.37 200.98 70.32 68.72 226.385.79 1.473.00 177.07 290.00 138.62 247.29 45.57 249.93 15. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 214 .90) (58.81 84. 2006 2005 2004 2003 2002 Profit / (loss) after tax before minority interest and preacquisition cost adjustments Minority Interest Profit / (loss) before pre-acquisition cost adjustments Goodwill Capital reserve Profit / (loss) for the year (93.36 1.33) 987.91 206.26 57.Current tax .464.77 77.88 2.29 42.17055 Place: New Delhi Date: September 29.60 1.74 2.00) (15.62 (80.81 276.208.394.00) 1.69) 9.48 29.86 2.04 2.30 366.91 740.49 594.06 170.Fringe benefit tax .97 11. Seth (Partner) Membership No.53 828.04 2.88 1.05) 32.42 96.32 2.25 8.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED .40 941.24 1.734.M.25 155.01 70.73 1.574.369.97 17.69 86.45) 223.76 96.665.26 1.64 For A.69 349.72 2.00 348.24 95.22 611.701.46 79.72 2.893.454.CONSOLIDATED ANNEXURE .32 73.63 3.708.25 161.48 (94.40 813.63 220.00 274.894.13 135.06 2.71 70.60 1.942.769. Chartered Accountants J. in millions) Particulars Income Operating income: Income from: In-patients Out-patients Income from satellite centres Less : Subsidy Other income (refer note 3 in Annexure III) Total Expenditure Materials consumption Staff Costs Professional fees Other operating expenses Administration and other expenses Provision for diminution in the value of investment Depreciation Interest Miscellaneous expenditure written off Total Profit before tax Provision for taxation : .11 178.74 394.86 34.99 223.37 452.04 297.56 28.816.39 72.44 254.

16 82. 2003 77. The consolidated financial statements relate to Escorts Heart Institute and Research Centre Limited (‘the Company’) and its Subsidiary Companies.98 Escorts Heart Centre Limited (EHCL) Escorts Heart and Super Specialty Institute Limited (EHSSIL) Escorts Heart and Super Specialty Hospital Limited (EHSSHL)* Escorts Hospital and Research Centre Limited (EHRCL) India India India 100. 1. on the audited financial statements prepared for consolidation in accordance with the requirements of Accounting Standard 21 by the concerned subsidiaries. The consolidated financial statements have been prepared on the following basis: . 2002.16 80. 2005 AND 2006.the financial statements of the Company and its Subsidiary Companies have been consolidated on a line-by-line basis by adding together the book values of like items of assets. 2003 and yet to commence its commercial operations. liabilities. 3.00 100. which is amortised over a period of ten years.61 As at March 31.the excess of cost to the Company of its investments in the Subsidiary Companies over the Company’s portion of equity of the shareholders at the date on which investment in subsidiaries is made is recognised in the financial statements as goodwill. 2. 2002 75. 2004 77. after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses. All other borrowing costs are recognized as an expense in the year in which they are incurred. Borrowing costs Borrowing costs that are attributable to the acquisition and construction of fixed assets are capitalised as part of cost of such asset upto the date the assets are put to use. b) Fixed assets Fixed assets are stated at cost less accumulated depreciation.00 82.80 - - India 100.00 100. 2003.the excess of Company’s portion of the equity of the subsidiaries at the date on which investment in subsidiaries is made over cost thereof to the Company. These Consolidated Financial Statements are based. is credited to capital reserve. 2005 77.96 75.61 As at March 31. in so far as they relate to amounts included in respect of subsidiaries.the result of operations of a subsidiary are included in the consolidated financial statements as from the date on which parent-subsidiary relationship came in existence. 2004. . Cost of acquisition is inclusive of freight.00 100. .00 - - * Incorporated on April 24.89 As at March 31. Statement of Accounting policies a) Principles of consolidation 1. 2006 100.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED . .III SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF STATEMENT OF ADJUSTED CONSOLIDATED ASSETS AND LIABILITIES AND STATEMENT OF ADJUSTED CONSOLIDATED PROFITS AND LOSSES FOR THE YEARS ENDED MARCH 31.CONSOLIDATED ANNEXURE. taxes and other incidental expenses relating to acquisition and installation of assets. c) 215 . duties.16 78. The subsidiary companies considered in the consolidated financial statements are: % of voting power held Name of the Company Country of Incorporation As at March 31.42 As at March 31. income and expenses.00 98.

l) Miscellaneous expenditure (to the extent not written off or adjusted) i) ii) “Preliminary expenses” incurred by EHSSIL during construction period are written off over a period of 5 years from the date of commencement of commercial operations. subject to the consideration of prudence. over a period of five years. over a period of five years.) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date. Monetary items (i. receivables. e) f) g) Revenue recognition Revenue is recognised on an accrual basis and includes value of services rendered pending billing in respect of in-patients undergoing treatment as at the end of the financial period except in respect of the years ended March 31. loans. is being amortised. Medical consumables and drugs and pharmaceuticals are valued at the lower of cost and net realisable value.e.e. etc. The contributions to the provident and other funds are charged against revenue every year. payables. i) Retirement benefits Provisions for gratuity. k) Taxation The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act. Investments Long term investments are stated at cost or under. h) Research and development expenditure Research and development expenses excluding capital expenditure are charged to revenue in the year in which these are incurred. 2003 being:- j) 216 . 2004 and subsequent thereto in case of fixed assets acquired from a country outside India. in which revenue from patients was recognised on discharge of the patients i. though incurred by EHSSIL but ownership of which belongs to Punjab State Electricity Board (PSEB).d) Depreciation (i) Depreciation on fixed assets is provided on the written down value method on a pro-rata basis at the rates specified in schedule XIV to the Companies Act. (ii) Cost of Independent feeder. 2002 and 2003. Project and preoperative expenditure incurred upto January 31. on timing differences. The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which they arise except where the foreign currency liabilities have been incurred in connection with fixed assets acquired up to March 31. Superannuation charges in EHRCL have been accounted for on the basis of payments made to the Superannuation Trust maintained by the ultimate holding company based on the entitlement of the employees covered under the scheme. superannuation and leave encashment benefits are determined on an actuarial valuation at the year end. bills raised (Also refer to note 2 below). 1956. Deferred tax is recognised. 1961. as the leases are for long term. Intangible asset in the form of software for internal use is amortised on straight line basis. No write-off is made in respect of leasehold land. Depreciation on additions/deletions is charged for the full month irrespective of the date of acquisition/deletion. Weighted average method is used in determining the cost of inventories. Foreign currency transactions Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing at the time of transaction. being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years. Inventories Stores and spares are valued at cost or under. where the exchange differences are adjusted in the carrying amount of concerned fixed assets.

e. 2003.63 0.19 8. 2003. arising in and incidental to normal business activities of the Company.60 39. 2002.11 0. b) During the year 2001-02.93 34.18 Most of the above items of other income are of recurring nature. March 31. 2003. for want of necessary information for prior years.86 5. in millions) 2002-03 2001-02 357.22 7. a) The Statement of Adjusted Consolidated Profits and Losses for the financial years ended on March 31. 2002 2003 1.24 30. 2004.a) project and preoperative expenditure other than expenditure which can be allocated directly have been allocated to buildings. 2004. 2004.86 79.2 of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines.81 11.51 0. 217 . 2000 except for a change in recognising unbilled revenue with effect from the year ended March 31. 2004 (Rs.90 19.32 0. plant and machinery. 2005 and 2006 and the Statement of Adjusted Consolidated Assets and Liabilities as at March 31.88 96. 3. as stated in note 1(g).32 3. 4.50 5.33 millions has been adjusted in the profit and loss account.24. 2006 Year ended March 31.90 29.92 1.99 28. m) Preliminary expenses Preliminary expenses / fees paid for increase in authorized capital by EHRCL is charged to profit and loss account as and when incurred. CONSOLIDATED NOTES 2. February 1.32 0.30 33.10.23 33.47 9. 2005 Year ended March 31. 2002.49 1.70 120.77 2004-05 416.60 367. Accordingly provision written back of Rs.77 12. These statements have been prepared by extracting from the audited consolidated profit and loss accounts and consolidated balance sheets for the aforesaid years after making therein the disclosures and adjustments [refer to note 2(b) and 8(a)(i) below] required to be made in accordance with the provisions of paragraph 6. and b) indirect expenditure not related to construction activity has been carried forward under the head “Project and preoperative expenditure” to be written off over a period of 5 years from the date of commencement of commercial production i.00 19.58 Particulars Dividend received from Unit Trust of India Interest on: Investments Fixed deposits Income tax refund Others including Inter Corporate Deposits Profit on sale of assets Profit on sale of investment Surrender value of keyman insurance policies Others Total 0. 2004.00 2003-04 387.96 7.30 1. in millions) Year Year ended ended March 31.45 12. 2002. 2003. 2005 and 2006.58 13. The Company has not declared any dividend during the financial years ended March 31.08 13.85 (Rs.85 2. 2005 and 2006 reflect the profits and losses and assets and liabilities for each of the relevant years indicated above. the Company changed the policy of determining provision for gratuity and leave encashment from an arithmetical basis to actuarial basis.93 23.02 1. (a) Claims against the Company not acknowledged as debts in the reported five years: Particulars Claims for medico legal cases Others 2005-06 384.03 0.22 0. medical equipments and furniture and fixtures of EHSSIL in the ratio of direct cost of concerned assets.86 8.18 6.36 1. The analysis of the other income is as under: Year ended March 31.

2003 2004 2005 2006 Net deferred tax assets 96. in millions) As at As at As at As at As at March 31.00 Registration of Escorts Limited. 218 . EHCL has closed the hospital operations in Kanpur with effect from August 31.89 156. under Haryana Value Added Tax Act.00 875. March 31.40 49. the management based on future projections. March 31. will be realized: (Rs. 2005. Managing Director and Chief Surgeon which.09 However. there is no benefit accruing as remuneration. the Company has received a comfort letter from Fortis Healthcare Limited.42 116. in the absence of evidence with regard to virtual certainty of its realisation has been a subject matter of audit qualification in the audit report of EHSSIL for the year ended March 31.00 125. March 31. 8.00 125. created by the Company on its receivables and collectibles: (Rs. Estimated amount of contracts remaining to be executed on capital account in the reported five years: (Rs. due and payable by Escorts Limited.00 35.73 16. 2006. as the recognition of deferred taxation. etc. (Insurance cover of Rs. liquidated damages. for liability (if any) which may arise under this guarantee.574 millions taken by the Company). 2002 2003 2004 2005 2006 Capital commitments 169. March 31. in millions) Particulars 2005-06 2004-05 2003-04 2002-03 2001-02 Subscription to non-convertible 750.00 875. is of the view that there will be sufficient future taxable income against which the following net deferred tax assets as at the end of respective years.12 300. The consideration for such assignments is the guaranteed surrender value as certified by the Life Insurance Corporation of India. on receipt thereof. 2006.00 interest. 2003 and has incurred losses. the amount of net deferred tax asset of Rs. After the closure of operations. (ii) In view of substantial reduction in the number of patients visiting the hospital resulting in low revenue and mounting losses.00 750. the erstwhile ultimate holding company. March 31.The Company has taken professional indemnity / error and omission policies to cover the hospital. front end fees.16 The Company takes endowment/key-men insurance policies on the lives of its Chairman. from time to time. (b) The charge by way of hypothecation.00 debentures of Escorts Limited.00 750. 2003 However.74 188. by ICICI Bank Limited Financial assistance to Escorts Limited 125. March 31.00 35. in millions) Particulars 2005-06 2004-05 2003-04 2002-03 2001-02 Charge for the amounts alongwith all 875. 6.82 74. Particulars March 31. in millions) Particulars 2005-06 2004-05 2003-04 2002-03 2001-02 35. in millions) As at As at As at As at Particulars March 31.82 millions has been adjusted in the Statement of adjusted consolidated profit and loss for the year ended March 31. have been assigned to the assured.00 750. holding company.00 750. the erstwhile holding company The above charge is on account of: (Rs. a) (i) EHSSIL started its commercial operation from February 1.96..00 (c) Corporate guarantee given by EHRCL to the Governor of Haryana in respect of: (Rs. The Company has been advised that such surrender value is adequate consideration for the assignments and. this company is moving into the business of managing the 7. its doctors and staff for any possible liability arising from claims for medico legal cases. Since the gestation period in such projects are comparatively longer and the losses reflect mainly depreciation charge and finance cost.

34 Particulars Net deferred tax assets As at March 31.23 Net deferred tax assets 53.00 - - 100. in millions) As at March 31. 2006 * As at March 31.14 248.90 113. 2004 As at March 31.22 As at March 31. 2003 (Rs.97 48. 2002 Description Deferred tax assets on: Accelerated depreciation 19. in millions) As at March 31.38 181.33 As at March 31.81 18.56 (15. 2006 As at March 31.00 - - 219 . in the absence of evidence with regard to virtual certainty of its realisation has been a subject matter of audit qualification in the audit report of EHSSIL for the year ended March 31.74 * As the recognition of deferred taxation.23 Deferred revenue expenditure 0. the amount of net deferred tax asset has been adjusted in the Statement of adjusted consolidated profit and loss for the year ended March 31.24 (iii) EHRCL has recognized net cumulative deferred tax assets as at the end of reported years as under: (Rs. 9.40 52.20 1. 2003 7.14 100. this company has created deferred tax asset for brought forward losses and unabsorbed depreciation as at the end of the reported years as under: (Rs.84 157.00 90. 2004 11. in millions) As at March 31.31 79.34 23.70 deprecation Others 0. 2004 As at March 31. 2002 3. Year wise analysis of Unsecured loans As at March 31. March 31.59 Sub-total 41.52 172.71 131. Looking into certainty of future income expected out of new business plan. 2005 15.12 21.65 payment Accumulated loss and unabsorbed 65.89 68.68 34.00 190. 2003 (Rs. in millions) As at As at As at As at March 31.32 1.25 32.00 98.03 As at March 31. March 31.74 Deferred tax liabilities on: Accelerated depreciation 41.67 50.89 69. 2003 2004 2005 2006 Net deferred tax assets / (liability) 27. 2006. Based on this new business plan.16 8.29 14.11 47.38 Sub-total 95.81 52.29 14. 2005 As at March 31.operations of the Cardiac Care Units located at various hospitals across the country. 2006. Particulars March 31. 2005 As at March 31. 2002 Name of the Institution / Bank Long-term From others: Infrastructure Leasing & Financial Services Limited Short – term From Banks: Lord Krishna Bank Unit Trust of India Punjab National Bank (Cash credit) Total 16. with the view to provide exclusive focus and direction to the said unit for achieving higher efficiency. 2006 17.48 32.19 100.49 112.00 55.54 30.86 3. this company would generate enough revenue to cover up all its brought forward business losses and unabsorbed depreciation.01 Accrued expenses deductible on 29.61) b) Deferred tax assets / (liability) have been computed for the reported years as under: As at March 31.

2006: Name of the Institution / Bank Infrastructure Leasing & Financial Services Limited Loans outstanding as at March 31.13 248.55 0. 2006 Cash credit facility 9. Analysis of Unsecured loans as at March 31.02 468. 2006 (Rs.59 3.10.80 3.90 151. 2004 (Rs.18 0.19 46.24 249. 2007 Four equal quarterly instalments commencing from June 24.85 60.50% (increased from 8. 2006 As at March 31. 2002 2003 248.87 520. 2006 100.51 81.43% 9.57 1.54 6.80 244.55 0. in millions) As at As at March 31.06) 10.f.28 0. 2005 As at March 31.59 67.52 172.42 4. Year wise analysis of Secured loans As at March 31. 2005 As at March 31. in millions) As at As at March 31.13 50.82 50. in millions) 16.65 - 8.53 491.00 65.03.52 0.e.32 12.66 253.09 - Name of the Institution / Bank Short – term From Bank: ICICI Bank Citibank Limited HDFC Bank Working capital loan from State Bank of India Cash Credit from Union Bank of India Working capital loan from Punjab National Bank Total As at March 31.00 32.90 135.93 6.30 220 .19 Name of the Institution / Bank Long-term From Bank: Central Bank of India State Bank of India Punjab National Bank Lord Krishna Bank Limited State Bank of Indore Union Bank of India Interest accrued and due From Others: Infrastructure Development Finance Company Limited GE Capital Services India As at March 31. 2003 2002 1.26 1. 2004 (Rs.40 2.91 0.00 55.50% w. March 31.75% Unit Trust of India Punjab National Bank Total 11.54 22.28 45. 14.67 Rate of Interest (per annum) Repayment Schedule 60 equal monthly instalments commencing from April 15. March 31.

000 each ending on January 7.28.75% 9.50% 11. 2005 Equated monthly instalments of Rs. 2009 Equated monthly instalments of Rs.90 Rate of Interest (per annum) Name of the Institution / Bank Repayment Schedule Nature of security Punjab National Bank (Term loan) 9.06 6. Six equal quarterly instalments commencing from June 28. 2005 Twenty four equal monthly instalments commencing from November 1. 221 .000 each ending on September 1.000 each ending on July 1. Loan from Union Bank of India is secured by way of first and exclusive charge over the entire moveable and immovable assets of EHRCL and further secured by equitable mortgage of hospital’s land and building situated at Neelam Bata Road. 2006 (Rs. 2008 - refer to foot note (i) refer to foot note (ii) refer to foot note (iii) refer to foot note (iv) refer to foot note (iv) refer to foot note (iv) refer to foot note (v) refer to foot note (v) refer to foot note (v) refer to foot note (v) refer to foot note (vi) refer to foot note (vii) ICICI Bank Limited 0. Repayment of final instalment of Rs.32 12.12. Four quarterly instalments of Rs.14.75% 30. 2009 Equated monthly instalments of Rs. Four quarterly instalments of Rs. 2004 Twenty four equal monthly instalments commencing from April 1.5 millions each.00% Infrastructure Development Finance Company Limited GE Capital Services India GE Capital Services India GE Capital Services India ICICI Bank Limited 50.00% Union Bank of India 135.75% Citibank Limited 0.4. During the year 2008-09. 2006: Loan outstanding as at March 31.22% Twenty equal quarterly instalments commencing from December 2006 During the year 2006-07.7.53 8. in millions) 248.00% 12.50 millions each.85 8. During the year 2007-08.00 9. Faridabad.000 each ending on July 1.5 millions each.82 8.42 4.90% 22.22.28.55 8.86 8.50% (ii) Term loan from Punjab National Bank is secured by way of equitable mortgage of EHSSIL and and buildings and hypothecation of all other fixed assets and further secured by corporate guarantee given by Escorts Heart Institute and Research Centre Limited.9 millions in April 2009.87 520.12.75% HDFC Bank Cash Credit from Union Bank of India Punjab National Bank (Working capital loan) Total (i) 0. Four quarterly instalments of Rs. the holding Company.59 8.75% 1. Analysis of Secured loans as at March 31.41 8.12. 2008 Equated monthly instalments of Rs. 2005 Twenty four equal monthly instalments commencing from September 4.

Delhi High Court has granted a stay restraining DDA from recovering physical possession of the property.79 130.considered good) As at March 31. EHIRC has filed an Original Miscellaneous Petition and Civil Suit in the Delhi High Court seeking a declaration that the DDA Order is illegal and praying for a permanent injunction restraining DDA from dispossessing EHIRC without due process of law. the holding Company. 2005 determined the lease deeds and allotment letters of EHIRC (“DDA Order”). The Delhi High Court. The matter was being defended by EHIRC and the proceedings have been suspended by the Estate Officer in view of the Order in the LPA mentioned below. by way of hypothecation of stocks and book debts of EHRCL. 2003 21. 2004 79.00 142. The matter is pending in Delhi High Court. 2006 90. The matter is being duly defended in the Court and is pending before the Delhi High Court.88 As at March 31. 2002 299.32 15. 2006 37. 222 . 2005. A Civil suit (“Civil Suit”) has been filed for declaration and permanent injunction against Escorts Heart Institute and Research Centre Limited (EHIRC) amongst others in the Delhi High Court seeking amongst others (a) declaration that the amalgamation of Escorts Heart Institute and Research Centre. EHIRC) is void. whether present or future. in millions) As at As at March 31. 2002 2003 14.00 218. 2005 and initiated eviction proceedings against EHIRC.36 15. Analysis of Sundry debtors (Unsecured .23 165. Analysis of loans and advances (Unsecured .73 26.55 457. attachments.76 305.02 (Rs. 2004 34. Secured by first charge on certain specific medical equipment financed through loan. March 31.40 77. vide its Order dated September 30.64 As at March 31. 2002 228. Chandigarh (EHIRC Chandigarh) a society registered under the Societies Registration Act. 2006 171.53 As at March 31.79 As at March 31. 1956 (i.considered good) As at March 31.50 millions from Industrial Development Finance Company Limited is secured by a first and exclusive charge over all movable properties.00 501. Working Capital Loan from Punjab National Bank taken by EHSSIL is secured by way of hypothecation of stocks of medicines including life saving drugs and further secured by a corporate guarantee given by Escorts Heart Institute and Research Centre Limited.65 Particulars Debts over six months Other debts 14. including all additions.88 15. 2004 28. accessories and replacements to the said equipment. Delhi. 1860 and subsequent incorporation of EHIRC Chandigarh Society (post amalgamation) into a Company under Part IX of the Companies Act. 2005 has.92 182. a society registered under the Societies Registration Act. pertaining to the hospital at Jaipur and additionally secured by immovable properties of the said hospital at Jaipur. Cash credit facility from Union Bank of India is secured by way of security given in respect of term loan mentioned in (ii) above and in addition.56 As at March 31. Citibank Limited and HDFC Bank are secured by way of hypothecation of cars financed. March 2003 31.61 285. 1860 (EHIRC Delhi) with Escorts Heart Institute and Research Centre. in millions) As at As at March 31.10 (Rs.44 Particulars Loans and advances recoverable in cash or in kind or for value to be received Loans to erstwhile holding Company Particulars Advance tax (net of provisions) Deposit with customs and port trust Total 15. (b) seeking a restoration of charitable status of EHIRC Delhi Society.e.00 428.00 As at March 31.55 22.56 As at March 31.34 15.28 135.(iii) (iv) (v) (vi) (vii) Loan of Rs. 2005 52.42 15.57 285. Delhi Development Authority (DDA) vide its Order dated October 6. 2005 102.21 257. only ordered the parties to maintain status quo as of September 30.25 63.00 336. 13. however.00 As at March 31. Car loans from ICICI Bank Limited.12 As at March 31.18 4. The Estate Officer of the DDA issued a show cause notice dated November 9. 2005 16.

2004 in respect of medicines. the exemption availed by the erstwhile Delhi Society by virtue of being an approved scientific research organisation has been withdrawn in these years. which was dismissed by the Hon’ble Single Judge. assessment years 1997-98.526. 525. which is pending disposal. 17. the Income-tax Authorities have re-opened the assessments of Chandigarh and Delhi Societies.1243. amongst other hospitals. has been completed for assessment year 2003-04 in the case of the Company whereby a demand of Rs.42 millions has been raised. i.291. hence. therefore. 2006 has held that the Company is liable to pay Value Added Tax (“VAT”) on the said items. The Division Bench of the Delhi High Court while issuing notice to the Estate Officer passed an interim order in favour of EHIRC directing that no final order on eviction can be passed by the Estate Officer.694. In view of the management. and later on registration of the Amalgamated Society as a company. 223 . 2005. The PIL is being defended and the matter is pending in the Delhi High Court. drugs. Delhi has completed the reopened assessments of the Delhi Society for four assessment years.80 millions in the matter. 1999-2000 and 2000-01. The Company has filed appeals before the Commissioner of Income– tax (Appeals) for all these years. The Delhi High Court in March 2004. diet. EHIRC thereafter filed Letters Patent Appeal (LPA) against the above order before the Delhi High Court. implants. 1998-99. wherein. The Hon’ble Court in its interim order dated September 20. 1996 has been brought to tax and the incomes of the respective years thereafter have been subject to tax as normal business income. whereby the entire accumulations and allowances made in earlier years have again been brought to tax. The Company has out of an abundant caution. Chandigarh. the Company submitted an application dated September 20. without considering the items used in composite packages for which no separate bills are raised. The LPA is pending before the Delhi High Court. 1999-00 and 2000-01 shall remain suspended till matter is heard and decided by the Court. Chandigarh. New Delhi for determination of whether the Company is liable to pay tax under the provisions of the Delhi Value Added Tax Act. made EHIRC a party to a Public Interest Litigation (PIL) filed in July 2002 (Social Jurist matter). The Company is of the view that the demand raised for the assessment year 2001-02 includes duplication on account of demands raised in the assessment years 1997-98 to 2000-01 and. hence raising a cumulative demand of Rs. The Deputy Commissioner of Income-tax.32 millions and interest thereon amounting to Rs.42. (a) The Income-tax Authorities carried out a survey on August 21.EHIRC filed a civil writ petition in the Delhi High Court challenging the show cause notice issued by Estate Officer. made an estimated provision of Rs. devices. further.e. which are still in possession of the Authorities). The past accumulated income upto March 31. raising a further demand of Rs. 1998-99. Delhi (Delhi Society) with a society at Chandigarh with a similar name (Chandigarh Society). The application was made on the basis that the above items are not marketable commodities and.60 millions). The Deputy Commissioner of Income-tax has also assessed the income for assessment year 2001-02. consumables etc.985. Appeal has been filed before the Commissioner of Income-tax (Appeals) against the disallowances made in the assessment order which is pending disposal. are not goods. The Company feels that the above registration does not give rise to transfer of assets and consequent capital gains and.. the events taking place in the year 2000 cannot relate back to earlier years. Pursuant to the survey. concerning the applicability of certain free bed conditions on certain plots of land allotted to EHIRC by DDA. The Commissioner. 2006. has also raised a demand of tax amounting to Rs.4. which is pending for disposal. Pursuant to a notice under Section 59 of the Delhi Value Added Tax Act.70 millions (including interest of Rs..91 millions (including interest of Rs. which are administered in the course of treatment of patients. EHIRC has filed an appeal before the Delhi Value Added Tax Appellate Tribunal against the aforesaid Order of the Commissioner on April 27. 1961. 2005 before the Commissioner of Trade and Taxes (“Commissioner”). (c) Regular assessment under section 143(3) of Income-tax Act. the eventual outcome of the above matters cannot presently be estimated. although it is of the view that no such liability would arise. 16. The Company has challenged the reopening of assessment year 1997-98 before the Delhi High Court in a writ petition filed on July 27.91 millions). 2003 (certain statutory records of the Company were impounded.60 millions by treating the excess of assets over liabilities as short term capital gains on registration of the Amalgamated Society as this Company. (b) The Additional Commissioner of Income-tax. regarding amalgamation of Escorts Heart Institute and Research Centre. vide his Order dated March 17. has preferred an appeal before the Income-tax Appellate Tribunal. 2004. 2005 has directed the assessing officer to complete the assessments for all these years and has also directed that the operation of assessment orders for assessment years 1997-98.

the disclosure requirements of Accounting Standard (AS-17) “Segment Reporting”.e.e. IFS Solutions India Private Limited Escorts Construction Equipment Limited Escorts Automotive Escorts Securities Escorts Assets Management IFS Solutions India Private Limited - Escorts Telecommunicatio n Limited - - - 10. 8. 2005) Fortis Healthcare Limited (w. - - - 224 . 9. Related party disclosures under Accounting Standard 18 I) A. 4. 12. issued by The Institute of Chartered Accountants of India are not applicable. 1.f. B. September 29. 13. C.2005) Holding Company 2005-06 Escorts Limited (till September 28. 11. 6. 2005) 2004-05 Escorts Limited 2003-04 Escorts Limited 2002-03 Escorts Limited 2001-02 Escorts Limited 2004-05 2003-04 2002-03 2001-02 19. 2. “Health Care Services”. 1.f. As the Company’s business activity falls within a single primary business segment. viz. Fellow Subsidiaries Sr. Sr. 5. Cellnext Solutions Limited Escorts IT Services Private Limited Cellnext Solutions Limited Escorts IT Services Private Limited IFS Solutions India Private Limited Escorts Construction Equipment Limited Escorts Automotive Escorts Securities Escorts Assets Management - 7. Escosoft Technologies Limited 2004-05 Escosoft Technologies Limited 2003-04 Escosoft Technologies Limited Esconet Services Limited Iserve India Solutions Private Limited Cellnext Solutions Limited Escorts IT Services Private Limited 2002-03 Escorts Hospital and Research Centre Limited Escosoft Technologies Limited Esconet Services Limited Iserve India Solutions Private Limited Cellnext Solutions Limited Escorts IT Services Private Limited 2001-02 Escorts Hospital and Research Centre Limited Escosoft Technologies Limited Esconet Services Limited Iserve India Solutions Private Limited Escotel Mobile Communication Limited - 3. Sr. No. September 29. No. Name of related party and nature of related party relationship Ultimate Holding Company 2005-06 Fortis healthcare Holdings Limited ( w. 2005-06 No. 1..18.

No. 2005) Ranbaxy Laboratories Limited (w. E.e.e. Gen. Malvinder Mohan Singh (w. September 29. No. September 29. September 29. Ritu Nanda Mrs.f. Sr.f. 2005) Mrs. Sr. N. Gen. Shivinder Mohan Singh (w. No. 15.f. Ritu Nanda (till September 28.) Harcharan ingh - - - F. 5.e. Mrs. Gen. 2005) (Lt.f. Rajan Nanda 2002-03 Mr. 2005) 2004-05 2003-04 2002-03 2001-02 - 225 . Harpal Singh (w. 2005-06) 2004-05 Mr. September 29.f. 1.f.14. Rajan Nanda 2001-02 Mr. Rajan Nanda 2003-04 Mr. International Hospital Limited Oscar Bio-tech Private Limited - - - - D. September 29. 2.e.) Harcharan Singh Mr. K. Joint Venture of Holding Company 2005-06 2004-05 2003-04 Escotel Mobile Communication Limited 2002-03 2001-02 - Key management personnel 2005-06 Mr. Rajan Nanda (till September 28. Rajan Nanda 2. 4. (Lt. Ritu Nanda Mrs. Ritu Nanda Mrs. 2005) Mr. 1. Sr. 2005) Mr. Enterprises significantly influenced by key managerial personnel 2005-06 SRL Ranbaxy Limited (w. Ritu Nanda 3. 1.) Harcharan Singh - (Lt. Pandey (w.e.e. 2005) Mr.

94 0.29 - - - - 0.32 (Cr.02 0.57 7. in millions) 2001-02 Fortis Healthcare Limited (holding company) (a) Rendering of services (b) Receiving of services (i) Professional services (ii) Others (c) Closing balances : Amount payable / (i) receivable Escorts Limited (erstwhile holding company) (a) Sale of assets Rendering of service (b) (#1 Rs.09 (Dr.55 50.81 2.16 (Dr.) 3.53 25.84 (Cr.42 (Cr.) 1.51 (Cr.00 30.05 4.25 0.86 22.00 - 0.) 285.53 135. 4000) Software development (ii) charges (iii) Others (b) Closing balance: Amount payable 0.00 (Cr.94 5.73 Refer to note 5b above #2 0.38 0.05 #1 0.00 (Cr.41 0.) 12.82 3.) 135.65 31.50 (Cr.) 220.00 (Dr.52 160.) 0.94 3.51 0.03 (Cr.) 5.00 (Dr.66 0.) 200.55 150.47 7.) 15.92 2.) 0.II) Transactions with related parties 2005-06 2004-05 2003-04 2002-03 (Rs.00 125.) 0.06 1.) 0.) 0.15 0.) 5.03 - 1.17 (Cr.81 2.35 1.04 0.94 3.) 6.62 (Dr.96 1.00 (Dr. 1000) (c) Receiving of services (i) Rental and hire charges Management (ii) contracts/deputations (iii) Others (d) Interest accrued / received on inter corporate deposits (e) Purchase of investment (f) Inter corporate deposit: (i) Given (ii) Received back / adjusted (g) Closing balances : Amount payable / (i) receivable (ii) Inter corporate deposit Interest on inter corporate (iii) deposits Security by way of (h) hypothecation FELLOW SUBSIDIARIES: Escosoft Technologies Limited (a) Receiving of services Management contracts / (i) deputations (#2 Rs.09 0.78 226 .44 16.46 0.79 2.00 (Dr.71 (Dr.67 3.) 0.00 - 0.00 60.

41 0.) 0.92 0.10 - - - - 0.01 - - - - (Dr.10 (Cr.01 5.69 - 1.23 (Cr.17 0.26 0.10 0.) 2. 4000) (b) Receiving of services Management contracts / (i) deputation (ii) Others Interest received on inter (b) corporate deposits Inter corporate deposit (c) given / repaid (d) Closing balance : Amount payable / receivable 2004-05 2003-04 2002-03 (Rs.) 0.25 (Cr.41 8.11 10.00 - - - - 0. in millions) 2001-02 - 0.) 0.02 227 .00 0.62 (Cr.03 - 0.01 - - - - # - - - 2.09 - 0.59 - - - 0.94 (Cr.) 0.38 (Cr.) 0.25 - - - 0.2005-06 Cellnext Solutions Limited (a) Receiving of services Software development (i) charges (ii) Others (b) Closing balance: Amount payable IFS Solutions India Private Limited (a) Receiving of services (b) Closing balance: Amount payable Escolife IT Services Private Limited (a) Receiving of services Management contracts / (i) deputations (b) Closing balance : Amount payable Escorts Telecommunications (a) Rendering of services (b) Closing balance : Amount receivable Esconet Services Limited (a) Sale of assets (b) Rendering of services (c) Receiving of services Management contracts / (i) deputation (d) Closing balance : Amount payable Escotel Mobile Communications Limited (a) Rendering of services Escorts Hospital and Research Centre Limited Rendering of services (a) (# Rs.23 - - - - 0.) 3.04 - 0.

01 (Cr. 1000) KEY MANAGEMENT PERSONS: Remuneration to key (a) management persons Assignment of Keyman (b) insurance policy (c) Closing balance : Amount Payable - - 0.) 0. 2000) Escorts Assets Management Receiving of services (a) (#3 Rs.) 2.88 - 15.21 - - - - Ranbaxy Laboratories Limited (a) Rendering of services 0.20 9.10 (Cr.73 19.10 (Cr.39 (Cr.82 10.06 - 0.) 2.2005-06 I Serve India Solutions Pvt.) 9. 2000) Escorts Securities Receiving of services (a) (#2 Rs.03 - 0. (a) Receiving of services Software development (i) charges (ii) Others (b) Closing balance : Amount payable Escorts Construction Equipment Limited (a) Receiving of services (b) Closing balance : Amount payable Escorts Automotive Receiving of services (#1 (a) Rs.60 16. Ltd.21 - - - - #1 - - - - #2 - - - - #3 - - - ENTERPRISES SIGNIFICANTLY INFLUENCED BY KEY MANAGERIAL PERSONNEL SRL Ranbaxy Limited (a) Receiving of services (b) Closing balance : Amount payable 0.30 228 .77 (Cr.03 (Cr.) 0.02 JOINT VENTURE OF HOLDING COMPANY Escotel Mobile Communications Limited (a) Rendering of services (b) Closing balance : Amount payable (# Rs.03 0. 2000) 2004-05 2003-04 2002-03 (Rs.73 18. in millions) 2001-02 - - - 0.) 0.40 (Cr.79 (Cr.) # - - 20.) 5.14 5.

52) (125.43 (56.22) C 183.01 1.10 (4.21) 219.68 34.64) 14.88 41.02) (19.36) 3.38 83.36 (88.50) 15.00 (624.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED .68 (401.04 (2.35 65.05) 95.14) 390.01) 135.75 1.46 (1.46 Year ended March 31.46) 70.56 442.74 143.00 8.40 246.49 290.70 (186.61) (4.81) 5.26 (0.58) 354.00) 0.50 B (178.29 (60.50 (62.50 (114.45 53.62 1.22 33.73) 296.91 1.34) 15.44) (303.70 (138.41) (1.01 (56. 2005 2004 2003 68.26 (8.61 219.24) 108.04 (0.CONSOLIDATED ANNEXURE .02) 0.57) 13.47) 58.59 (130.51 737.95 91.82) (63.01) 170.53 (106.88 (36.15) 217.83 314.00) 60.04 (1.44) (19. 2006 29.30 62.35) (117.IV STATEMENT OF ADJUSTED CONSOLIDATED CASH FLOWS (Rs.26) 324.66) 103.30) (10.17 (256.57 406.39) 250.57 (0.49) (9.86) (1.32 79.31 98.21 (96.70 2002 366.86) 5.52 0.00 250.40 276.85 247.45) 0.53) 15.73) (460.45 11.50 (242.46 (0.68 1.46) (614.28 185.30) (240.32) 3.87 (83.87 (79. in millions) Particulars A CASH FLOWS FROM OPERATING ACTIVITIES Net profit before tax and extraordinary items Adjustment for : Depreciation Provision for diminution in value of investments Miscellaneous expenditure written off Profit on sale of fixed asset Loss on sale of fixed asset Profit on sale of investments Interest expenses Interest income Dividend income Operating profit before working capital changes Adjustments for working capital changes Trade and other receivables Inventories Advance excluding advance Income-tax Trade and other payable Cash generated from operations Miscellaneous expenditure Direct taxes paid Net cash from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of fixed assets Investments in shares of subsidiaries Purchase of investments Inter corporate deposits given Inter corporate deposits repaid Sale of investments Interest received Dividend received Miscellaneous expenditure Net cash (used) in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares to minority Proceeds from long term borrowings Repayment of long term borrowings Proceeds from short term borrowings Interest paid Net cash from financing activities Net increase / (decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents as at the beginning of the year Add: Cash and cash equivalents acquired on acqusition of subsidiary during the year Cash and cash equivalents as at the end of the year Refer to Annexure III for significant accounting policies and notes.26 9.55 (0.96 (658.89 229 .77 35.11) 0.17 (1.87) (108.46 (19.63 0.58 198.03 (73.27 246.36 1.80 17.79 6.03 22.11) 3.58 (262.23 (109.50 113.48 (0.04 (0.00 19.55) 174.48) 390.00 78.30) 334.00 (60.08) 0.48) (23.10 62.16) 258.82 (21.71) 53.57 35.27 95.53) (16.89 113.02) 199.02) 359.52) (555.80) 113.00) 40.60 (70.22 1.

33 879.72% 2005 Year ended March 31.98 797.V SUMMARY OF ACCOUNTING RATIOS Particulars Nominal value of shares Earnings per share Net assets value per share Return on net worth Unit Rupees Rupees Rupees Percentage 2006 10 (42.19% 2002 10 111.81 937.CONSOLIDATED ANNEXURE .33) 896.62 80.25% 4.19 2. 2004 2003 10 10 10 21.13 36.04% Notes: Definition of ratios Earning per share = {Adjusted Profit/(loss) after tax as per Statement of Adjusted Profits and Losses} / {Weighted average number of shares} Net asset value = {Net worth as per Statement of Adjusted Assets and Liabilities} / {Weighted average number of shares} {Adjusted Profit / (loss) after tax as per Statement of Adjusted Profits and Losses} / {Net worth as per Statement of Adjusted Assets and Liabilities} Return on net worth = 230 .00% 9.31 14.17 -4.98 916.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED .

773. in millions) As at March 31.485.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED .Unsecured loans Total Long term debts .26 692.792.Secured loans . 2006 Particulars Borrowings: Short term debts .00 1.VI STATEMENT OF CAPITALISATION (Rs.30 Note: Post issue Capitalisation Statement : Not applicable 231 .59 16.38 0.64 (1.67 537.78 B (B) (A)+(B) 20.52 155.60 2.Secured loans .CONSOLIDATED ANNEXURE .04) 1.52 520.Unsecured loans Total Total debts C Shareholders' funds: Equity Share Capital Reserves and surplus Less: Miscellaneous expenditure to the extent not written off Total Shareholders' funds (C) D E Total Capitalisation Long term debt / Equity ratio (A)+(B)+(C) (B)/(C) A (A) 155.

CONSOLIDATED ANNEXURE . 2004. 2003. for the year ended March 31. 232 . 2002.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED .VII STATEMENT OF TAX SHELTER The statement of tax shelters of the Company and its subsidiaries. 2005 and 2006 are attached herewith per Annexures VII (a) to (d).

14) (35.97 23.00% 20.91% 20.66% 22.33 233 .59% 35.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE – VII (a) STATEMENT OF TAX SHELTER (Rs.79) 81.75% 35.78 (49.93 (0.56 1.71 367.07 115.97 4.71 38.20) (5.07 214.66 214.44% 115.14 (14.96 272.66 253.26) (5.72 111.07) 126.93) 11.65) (17.12 (15.06 16.44) 13.55 94.85 (1.40% Particulars Normal tax rate (including surcharge and education cess) Concessional tax rate for long term capital gain (including surcharge and education cess) Profit taxable at normal rate Profit taxable at concessional rate Net profit before tax as per Statement of Adjusted Profits and Losses Tax at Notional Rate Adjustments: Difference between tax and book depreciation Accrued expenses deductible on payment basis Other adjustments Net adjustments Tax (saving) / expense thereon Tax as per income tax Deferred tax charge / (benefit) 2006 33.20 15.63) 12.06) 49. 2005 2004 2003 2002 36.22 131.88% 36.73 78.93 13.27 30.24 (16.65) (12. in millions) Year ended March 31.51) 93.47 (49.56 (58.70% 20.71 18.58) 72.15 301.55 0.42 367.86 303.23 18.50% 21.51 55.19 18.87) (47.05) (26.89 (0.31) 11.

23) (1.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE – VII (b) STATEMENT OF TAX SHELTER Particulars Tax rate (including surcharge and education cess) (Loss) before tax as per Statement of Adjusted Profits and Losses Tax at Notional Rate Adjustments: Difference between tax and book depreciation Accrued expenses deductible on payment basis Other adjustments Net adjustments Tax (saving) thereon Tax as per income tax Deferred tax charge / (benefit) Year ended March 31.87 12.23 74.62) (4.29 (3.17) 0.91) (24.88% (94.26 0.40 (6.64) (34. in millions) 2 months ended March 31.75% (42.87 (5.89) (33.48) (38.13) - - - - 11.67) (15. 2003 36.89 (13.42 0.59% (66.51 0.61) 0.87) 0. 2006 2005 33.06) (13.55 4.09) 234 .66 0.99) (16.35) (Rs.66% 36.68) 2004 35.69) (82.

2.69 **** 0.5% PLUS Surcharge thereon @ 2%) which works out to Rs.34 NIL 0.5% PLUS Surcharge thereon @ 10%PLUS Education Cess thereon @ 2%) ***Brought Forward Business Losses being lower than unabsorbed depreciation as per Clause (iii) for amount deductible vide explanations to Section 115 JB of the Income Tax Act.e.69 * * Tax on Book Profit @ 7... Tax @ 10% PLUS Surcharge thereon @ 10%PLUS Education Cess thereon @ 2%) 235 . Tax @ 7. Year ended March 31.34 NIL NA for Tax on Book Profits *** NIL DUE NIL DUE NIL DUE NA for Tax on TO TO TO Book Profits LOSSES LOSSES LOSSES NA NIL 2.22% (I.50 ** 2005 2004 2003 2002 2. FARIDABAD ANNEXURE – VII (c) TAX SHELTER STATEMENT (Rs.415% (I.65% (I. Tax @ 7.69 millions ** Tax on Book Profit @ 8. 1961. ****Tax on Book Profit @ 11.ESCORTS HOSPITAL AND RESEARCH CENTRE LIMITED.15 0.82) 0.82) (1. in millions) As at March 31.e. 2006 Tax at Notional Rate Adjustments: Export Profits Difference between Tax Depreciation and Book Depreciation Other Adjustments Net Adjustments Tax Saving thereon: Total Taxation Taxation on extra-ordinary items Tax on profits before extraordinary items NIL NA for Tax on Book Profits (1..69 NIL 2.e.

88 147.43 112.38 (1.91) (112.75 20.80 (1.03 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 236 .96) (10.69 (1.86 0.82 (106.79 (0.20 41.59% 35.24 (147. Seth (Partner) Membership No.84 1. F.24 76.31 21.17 (Rs.33 62.46 33.87 30.39 (112.M.67 38. in millions) Year ended March 31.54) (20. 2005 2004 2003 2002 36.93 1.17055 Place: New Delhi Date: September 29.70) 8.61 123.21) (30. Chartered Accountants J. 2006 2006 33.45) 37.66% (61.88 5.65 52.62) 5.97 0.76 12.84 (11.90 42.32 (2.46) 11.85) 10.63) 7.34 (90.41) 3.VII (d) STATEMENT OF TAX SHELTER Particulars Tax rate (including surcharge and education cess) (Loss) before tax as per Statement of Adjusted Profits and Losses (A) Tax at Notional Rate Adjustments: Difference between tax depreciation and book depreciation Other adjustments Net adjustments Tax (saving) thereon Taxable Income (A-B) Represented by: Unabsorbed depreciation Unabsorbed loss Unabsorbed short term capital loss Total Permanent Difference (D) Deferred Tax Asset at Notional rates (Tax on A + D) Difference due to deferred taxation at substantial enacted tax rate Deferred tax charge / (benefit) For A.88% 36.36 81.75) 24.55) 3.35 (0.84) 37.02) 41.65) 32.67) (31.75% 35.ESCORTS HEART CENTRE LIMITED ANNEXURE . Ferguson & Co.70% (144.99 (99.41 31.67) (123.77 114.29) 39.51 99.97) 36.

2004. as stated in note 2 in Annexure III. Reliance has been placed on the management’s view that the gestation period in such projects is comparatively longer and there is no permanent diminution in the value of such investments and the advances are good and fully recoverable. duly approved by the Board of directors and audited by us.110025 Dear Sirs. 2004. There were no qualification in the auditors’ reports on the financial statements for the financial years ended on March 31. 2003. Attention is invited to: .124. annexed to this report. iv. Financial information of the Company 1. 1992. 2005 and 2006 (Annexure-II) (Summary Statements). and loans and advances aggregating Rs. 2004. and iii. We have examined the attached Statement of Adjusted Assets and Liabilities of the Company as at March 31. There are no extraordinary items which are required to be disclosed separately in Summary Statements. losses in these Companies have resulted either in substantial erosion or negative net worth of these companies. the eventual outcome of which cannot presently be estimated. 2005 and 2006 (Annexure-I) and the accompanying Statement of Adjusted Profits and Losses of the Company for the financial years ended on March 31. The qualification in the auditors’ report on the financial statements for the year ended March 31. The matters are pending in appeals at various stages. 2004 and 2005.note 16 in Annexure III which sets out in details the position of land under leasehold arrangements with Delhi Development Authority. no dividend has been paid by the Company in respect of each of the financial years ended on March 31. iii. Attention is invited to note 18 in Annexure III regarding investments aggregating Rs. and . due to lack of necessary information for prior years. We have examined the financial information of Escorts Heart Institute and Research Centre Limited (the Company). As per the latest available audited financial statements. 2000 (‘the SEBI Guidelines’) issued by the Securities and Exchange Board of India (‘SEBI’) and amendments made thereto from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act. 2004.AUDITORS’ REPORT The Board of Directors Escorts Heart Institute and Research Centre Limited Okhla Road New Delhi . The Company had no other class of shares during these years. the effect of which cannot presently be quantified. the holding company. 2002.2060.62 millions (net of demands raised twice in respect of certain years) raised by the Income-tax Authorities. 2. 1956 (the Act). ii.51 millions in. requesting us to examine the financial information referred to above in connection with the proposed initial public offer of equity shares by Fortis Healthcare Limited. 2002. 2006. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. The instructions received from the Company. 3.note 17 in Annexure III which sets out in details the position with regard to certain demands aggregating Rs. The changes in accounting policies which required adjustments to arrive at the Summary Statements have been carried out [refer to note 2(b) in Annexure III] except for a change in recognizing unbilled revenue with effect from financial year ended on March 31. 5. The Summary Statements have been extracted by the Company from the financial statements of the Company for the respective periods. ii. 2003. Based on our examination of these Summary Statements. which has been prepared in accordance with the requirements of: i. 2003. 2005 and 2006 on the equity shares. we confirm that: i.184. has been stated in paragraph 4 below. 4. 2002. 2002. We further report that as per the books and records produced to us. 2003.24 millions to certain subsidiary companies. Material amounts relating to adjustments for the previous years have been identified and adjusted in arriving at the profits/losses for the years to which they relate irrespective of the year in which the event triggering the profit or loss occurred. We are unable to express an opinion at this stage in these matters. 237 . Paragraph B (1) of Part II of Schedule II to the Companies Act.

7. enclosed as Annexure-VII. ii. enclosed as Annexure-III. Seth (Partner) Membership No. Statement of Capitalisation as at March 31. This report is intended solely for your information and for forwarding it to Fortis Healthcare Limited. The details of transactions with the related parties in accordance with the Accounting Standard 18 – Related Party Disclosures issued by the Institute of Chartered Accountants of India (refer to note 21 in AnnexureIII). v. The significant accounting policies followed by the Company and notes pertaining to the Summary Statements. Statement of Adjusted Cash Flows.M. attached to this report: i. iii. iv. 2006 238 . F. vi. Chartered Accountants J. Statement of Tax Shelter. For A. enclosed as Annexure-IV. enclosed as Annexure-VI. the holding company.17055 Place: New Delhi Date: September 29. enclosed as Annexure-V. Ferguson & Co. for the purpose of inclusion in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose without our prior written consent. We have examined the following financial information relating to the Company. Summary of accounting ratios based on the adjusted profits relating to earnings per share.6. net assets value and return on net worth. 2006.

79 29.01 759.13 29. in millions) Particulars 2006 A Fixed assets Gross block Less : Depreciation Net block Capital work-in-progress Total Investments Deferred tax assets (net) (refer to note 9 in Annexure III) Current assets.40 B C D 45.31 1.72 33.10 For A.49 47. Reserves and surplus Net worth 2005 As at March 31.788.42 340.233.966.577.00 1.47 46.33 15.81 939.966.89 129.03 366.18 2.928.87 82.52 403.10 F G 20.11 981.17055 Place: New Delhi Date: September 29.74 397.89 15.45 690.36 900.49 20.213.64 1.47 40.57 986.99 207.87 2.17 140. loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Other current assets Total Liabilities and provisions Secured loans Unsecured loans Deferred tax liabilities (net) (refer to note 9 in Annexure III) Current liabilities and provisions Total Net worth .382.28 474.Total (A+B+C+D-E) Represented by 1.39 659.01 - 1.597.19 905.84 10.08 22.62 1.92 1.946.04 1. Seth (Partner) Membership No.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE .00 2.I STATEMENT OF ADJUSTED ASSETS AND LIABILITIES (Rs.52 - 2.70 1.55 554.083.65 213.99 1.67 900.10 190.768.38 678.66 815.21 379.33 670.11 298.069.29 1.43 2.64 314.10 1.13 246.086.52 811.79 172.27 382.64 20.19 491. Chartered Accountants J.00 2.64 207.04 238.63 2. F.43 238.M.24 248.29 26.175.41 946.40 1.53 8.70 39.597.43 1.39 1.155.83 474.19 290.267.788.87 20.19 402. 2004 2003 2002 2.48 E 115.00 320.45 616.17 723.14 7.175.04 20.124.86 337.141.396.49 2.18 591.00 2.20 792.65 77.80 109.00 1.106.00 1. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 239 .064. Share Capital 2.00 32.29 1.106.25 21. Ferguson & Co.

00) (5.14 134.304.91 367.454.82 2. F.32 149.28 1.46 1.M.42 96.09 2.906.33) 225.18 1.Fringe benefit tax .67 141.22 132.231.79 1.585.Current tax .46 78.71 (127.30 25.95 394.71 103.77 87.00) (13.62 807.12 2.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE .110.04 303.66 (70.29 512.04 279.50 134.II STATEMENT OF ADJUSTED PROFITS AND LOSSES (Rs.00 2.77 272.15 49.85 116.42 (94.45 2.31 577.82 150.90 2.01 25.31 172.574.87 439.06 68.74) 16.77 77.142.80 18.36 146. Ferguson & Co.17055 Place: New Delhi Date: September 29.50 15.56 31.36 83.15 (80.07 (56.78) 139.69 348.178.90 17.Deferred tax (charge) / benefit Net profit after tax For A.00 86.09 45.72 218.38 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 240 .05 69.00) (18.67 114.11 2.40 1. 2006 Year ended March 31.08 33.330.825.77 331.402.83 94.265.04 96.34 214.44 120.46 115.050.42 1.92 1.39 269. Chartered Accountants J.92 2.206.473. Seth (Partner) Membership No.38 795.59 293.91 68.37 2.59 580.86 2.89 107.215.61 290.75 1. 2005 2004 2003 2002 2.85 723.12 6.888.05 115.57 102.56 222.09 109.88 657.03) (4.36 1.257. in millions) Particulars 2006 Income Operating income: Income from : In-patients Out-patients Income from satellite centres Less : Subsidy Other income (refer to note 3 in Annexure III) Total Expenditure Materials consumption Staff costs Professional fees Other operating expenses Administration and other expenses Provision for diminution in the value of investment Interest Depreciation Total Profit before tax Provision for taxation : .792.00) (15.47) 190.56) 178.

2005 AND 2006 1. payables.e. 2003. Deferred tax is recognised. 241 .) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date. Depreciation on additions/deletions is charged for the full month irrespective of the date of acquisition/deletion. 2002 and 2003. being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years. duties. etc. in which revenue from patients was recognised on discharge of the patients i. 1956. 2004. (Also refer to note 2 (a) below). taxes and other incidental expenses relating to acquisition and installation of assets. j) Taxation The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act. bills raised. i) Foreign currency transactions Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing at the time of transaction. g) Research and development expenditure Research and development expenses excluding capital expenditure are charged to revenue in the year in which these are incurred. 2004 and subsequent thereto in case of fixed assets acquired from a country outside India. receivables. as the leases are for long term.e. where the exchange differences are adjusted in the carrying amount of concerned fixed assets. Monetary items (i. Cost of acquisition is inclusive of freight. 2002. All other borrowing costs are recognized as an expense in the year in which they are incurred. e) Inventories Stores and spares are valued at cost or under. Significant accounting policies a) Fixed assets Fixed assets are stated at cost less accumulated depreciation. h) Retirement benefits Provisions for gratuity and leave encashment benefits are determined on an actuarial valuation at the year end. subject to the consideration of prudence.III SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF STATEMENT OF ADJUSTED ASSETS AND LIABILITIES AND STATEMENT OF ADJUSTED PROFITS AND LOSSES FOR THE YEARS ENDED MARCH 31. d) Investments Long term investments are stated at cost or under. The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which they arise except where the foreign currency liabilities have been incurred in connection with fixed assets acquired up to March 31.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE. 1961. f) Revenue recognition Revenue is recognised on an accrual basis and includes value of services rendered pending billing in respect of in-patients undergoing treatment as at the end of the financial period except in respect of the years ended March 31. The Company’s contributions to the provident and other funds are charged against revenue every year. over a period of five years. Weighted average method is used in determining the cost of inventories. No write-off is made in respect of leasehold land. c) Depreciation Depreciation on fixed assets is provided on the written down value method on a pro-rata basis at the rates specified in schedule XIV to the Companies Act. loans. b) Borrowing costs Borrowing costs that are attributable to the acquisition and construction of fixed assets are capitalised as part of cost of such asset upto the date the assets are put to use. Intangible asset in the form of software for internal use is amortised on straight line basis. on timing differences. Medical consumables and drugs and pharmaceuticals are valued at the lower of cost and net realisable value.

42 120. 2002. The Company has not declared any dividend during the financial years ended March 31. 2004. in millions) Year ended Year ended Year ended Year ended March 31. etc. 2004.574 millions taken by the Company). 2003. 5.94 Income tax refund Others including Inter Corporate 9. Accordingly provision written back of Rs.00 2004-05 397. 2002.86 Surrender value of keyman insurance 11. 4.33 millions has been adjusted in the profit and loss account.17 39. for want of necessary information for prior years. a) The Statement of Adjusted Profits and Losses for the financial year(s) ended on March 31.NOTES 2.70 Total 25. its doctors and staff for any possible liability arising from claims for medico legal cases. in millions) Particulars Claims for medico legal cases Employee’s dues 2005-06 367.63 Deposits Profit on sale of assets 0. Out of the five years reported. 2003. 2005 and 2006 and the Statement of Adjusted Assets and Liabilities as at March 31. b) During the year 2001-02. The analysis of the other income for these years is as under: (Rs.78 2002-03 357.00 2003-04 875.10. 2005 and 2006. 2005 and 2006 reflect the profits and losses and assets and liabilities for each of the relevant years indicated above. arising in and incidental to normal business activities of the Company. in millions) Particulars Charge for the amounts along with all interest. other income exceeds 20% of the net profits before tax. 2003.66 2003-04 384.18 Most of the above items of other income are of recurring nature.23 33.. March 31.00 2001-02 750.00 2002-03 875. These statements have been prepared by extracting from the audited profit and loss accounts and balance sheets for the aforesaid years after making therein the disclosures and adjustments [refer to note 2(b) below] required to be made in accordance with the provisions of paragraph 6. (a) Claims against the Company not acknowledged as debts in the reported five years: (Rs.90 6.79 7.00 242 . the Company changed the policy of determining provision for gratuity and leave encashment from an arithmetical basis to actuarial basis. the erstwhile holding company 2005-06 2004-05 875.01 0. 2003.14 3. Particulars March 31. created by the Company on its receivables and collectibles: (Rs.08 Profit on sale of investment 19.77 8.60 33. arrived as per the Statement of Adjusted Profits and Losses in the years ended March 31.86 96.60 2001-02 366.82 68.58 13. front end fees.29 Fixed deposits 0. 2002 2003 2004 2006 Dividend received from Unit Trust of India 1.58 Interest on: Investments 5. as stated in note 1(f).2 of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines.46 1.24. The Company has taken professional indemnity / error and omission policies to cover the hospital. March 31. 2004.57 2. liquidated damages. (b) The charge by way of hypothecation.75 3.92 29.22 9. 2004 and 2006.96 policies Others 3. 2002.77 23.24 13.19 0. 2002. (Insurance cover of Rs. 2004. due and payable by Escorts Limited.32 30.02 0. 2000 except for a change in recognising unbilled revenue with effect from the year ended March 31.74 0.

50 2002-03 298. 2002 Capital commitments 168.00 2003-04 750. 2005 31. there is no benefit accruing as remuneration. is of the view that the provisions of the Delhi Value Added Tax.00 Period to which the amount relates 1990-91 to 1993-94 1996-97 to 2000-01 2000-01 694. by ICICI Bank Limited Financial assistance to Escorts Limited (c) 2005-06 2004-05 750. the Company.00 125.00 125.80 184.10 - In respect of the Value Added Tax.71 55. The details of disputed dues on account of customs duty and income-tax as on March 31.00 - 125.91 549.41 There are no disputed dues in respect of wealth tax. in millions) Particulars Financial assistance availed by a subsidiary company.42 60.20 299.50 2001-02 - As confirmed by the subsidiary company. on receipt thereof.. 2004 31. Escorts Heart and Super Speciality Institute Limited 2005-06 275. excise duty and cess matters as on March 31. The Company has been advised that such surrender value is adequate consideration for the assignments and. The Company takes endowment/key-men insurance policies on the lives of its Chairman. in millions) Particulars Subscription to non-convertible debentures of Escorts Limited.00 526. in millions) 33.261.00 - Corporate guarantee given by the Company in respect of: (Rs. 2006 31.60 42. service tax. the amount outstanding in this regard is Rs.e. as explained in note 19. i. 8.00 2004-05 260.00 Amount paid under protest (Rs.The above charge is on account of: (Rs. from time to time.95 154.70 millions as at March 31. 2004 are not applicable to it. 6. 2006 are as follows: Name of the statute Nature of the dues Amount involved (Rs. have been assigned to the assured. Estimated amount of contracts remaining to be executed on capital account in the reported five years: (Rs. 2003 31.32 291.00 2001-02 750. in millions) 15.00 2003-04 298. Managing Director and Chief Surgeon which. The consideration for such assignments is the guaranteed surrender value as certified by the Life Insurance Corporation of India.00 2001-02 2002-03 Forum where dispute is pending 7. 243 . Custom Laws Customs duty Income-tax Interest thereon Income-tax Interest thereon Income-tax Interest thereon Income-tax Central Excise and Service Tax Appellate Tribunal Delhi High Court (Refer to note 17) Delhi High Court (Refer to note 17) Income-tax Appellate Tribunal. Chandigarh Commissioner of Income-tax (Appeals).60 525. 2006. Delhi Income-tax Act 459. 2006. in millions) As at March As at March As at March As at March As at March Particulars 31.00 2002-03 750.

19 12.04 18. in millions) Description Deferred tax assets on: Accelerated depreciation Accrued expenses deductible on payment Others Sub-total Deferred tax liabilities on: Accelerated depreciation Sub-total Net deferred tax assets / (liability) As at March 31. Annual analysis of Unsecured loans (Rs.36 29.00 98.59 28.52 172.06) 10.45 3.42) As at March 31. in millions) Name of the Institution / Bank Long-term From Others: Infrastructure Development Finance Company Limited GE Capital Services India Short – term From Bank: ICICI Bank Total As at March 31.00 65.17 28.00 90.75% Repayment Schedule 60 equal monthly instalments commencing from April 15.79 82. 2007 Four equal quarterly instalments commencing from June 24.18 18. 2005 As at March 31.92 As at March 31. 2004 18. 2005 21.00 32. 2002 50. Annual analysis of Secured loans (Rs.10 47.9.68 (2.24 47. 14.00 - - 100.40 10.43% 9.00 55. 2006 As at March 31. in millions) 16. 2006 Cash credit facility 100. 2006 (Rs.40 8.55 8.32 14.14 248.14 100.50% w. 2005 As at March 31.63 As at March 31.64 1.59 (7.79 50.00 55.40 29.64) As at March 31.17 21.18 27.52 172. in millions) Name of the Institution / Bank Long-term From others: Infrastructure Leasing & Financial Services Limited Short – term From Banks: Lord Krishna Bank Unit Trust of India Punjab National Bank (Cash credit) Total As at March 31.50% (increased from 8.10 - - 244 . 2002 19. 2004 As at March 31. 2006 27.f.24 - - - 115. Analysis of Unsecured loans taken by the Company as at March 31.e.67 Rate of Interest (per annum) 9. 2003 As at March 31.67 50. 2004 As at March 31.19 100. Deferred tax assets / (liability) have been computed for the reported years as under: (Rs.45 10.55 18. 2006 As at March 31. 2002 16.68 20.05 1.04 20.00 - - 11.37 3. 2003 13.00 190. 2003 As at March 31.03. 2006: Name of the Institution / Bank Infrastructure Leasing & Financial Services Limited Unit Trust of India Punjab National Bank Total Loans outstanding as at March 31.

considered good) As at March 31.00 298.85 8.84 24.25 200.75% instalments commencing from India April 1. Chandigarh (EHIRC Chandigarh) a society registered under the Societies 245 .93 10.29 246. Analysis of Sundry debtors (Unsecured .23 - Particulars Loans and advances recoverable in cash or in kind or for value to be received *** Loans to erstwhile holding company Loans to subsidiary companies Share application money Advance tax (net of provisions) Deposit with customs and port trust Total *** Include balances on current account with .07 83. pertaining to the hospital at Jaipur and additionally secured by immovable properties of the said hospital at Jaipur.32 15.00% instalments commencing from Development Finance Company Limited June 28.considered good) As at March 31.78 15.41 8. whether present or future.39 47. 2004 30.00 474.80 * 26.49 135.13.58 54. 2004 Twenty four equal monthly GE Capital Services 22.48 15. in millions) annum) Infrastructure Six equal quarterly 50. 15.00 31.31 140.40 Particulars Debts over six months Other debts Less: Advance against unbilled revenue per contra Net balance * 77. 14.00 15.67 220.60 25. a society registered under the Societies Registration Act.00 22.38 366. in millions) As at As at March 31. 2005 98. 2005 115.73 41.65 15.subsidiaries 80.06 154. in millions) As at As at March 31.31 285. (ii) Secured by first charge on certain specific medical equipment financed through loan.60 28. 2006: Loan outstanding Rate of Name of the as at March 31.75% instalments commencing from India September 4. Analysis of loans and advances (Unsecured .62 22.00 9.90 21. Analysis of Secured loans taken by the Company as at March 31.65 * Refer to note 2 (a) above. attachments.00 379. 2006 149.25 63.18 4. 2004 117.90% instalments commencing from India November 1.50 millions from Industrial Development Finance Company Limited is secured by a first and exclusive charge over all movable properties.79 .03 189.46 12.09 3. 1860 (EHIRC Delhi) with Escorts Heart Institute and Research Centre. March 31.53 8.62 240.00 337.33 65. 2006 103. 2002 2003 14.00 35.00 290. 2005 Twenty four equal monthly GE Capital Services 12.47 As at March 31.46 88.60 28. March 31.17 As at March 31. A Civil suit (“Civil Suit”) has been filed for declaration and permanent injunction against Escorts Heart Institute and Research Centre Limited (EHIRC) amongst others in the Delhi High Court seeking amongst others (a) declaration that the amalgamation of Escorts Heart Institute and Research Centre. accessories and replacements to the said equipment. Interest Repayment Schedule 2006 (per Institution / Bank (Rs.53 15.08 As at March 31. Delhi. including all additions. 2003 2002 100.89 18.33 (Rs.58 44.erstwhile holding company 16. 2005 110.25 3.71 (Rs. 2005 Twenty four equal monthly GE Capital Services 30.92 As at March 31.79 Total Nature of security refer to foot note (i) refer to foot note (ii) refer to foot note (ii) refer to foot note (ii) (i) Loan of Rs.

The matter was being defended by EHIRC and the proceedings have been suspended by the Estate Officer in view of the Order in the LPA mentioned below. Chandigarh. and later on registration of the Amalgamated Society as a company. wherein. The Deputy Commissioner of Income-tax. 2005. Delhi Development Authority (DDA) vide its Order dated October 6. The matter is pending in Delhi High Court. whereby the entire accumulations and allowances made in earlier years have again been brought to tax. 2005 and initiated eviction proceedings against EHIRC.70 millions (including interest of Rs. has preferred an appeal before the Income-tax Appellate Tribunal. hence raising a cumulative demand of Rs. 525. The past accumulated income upto March 31. The PIL is being defended and the matter is pending in the Delhi High Court.32 millions and interest thereon amounting to Rs. (b) seeking a restoration of charitable status of EHIRC Delhi Society. The Deputy Commissioner of Income-tax has also assessed the income for assessment year 2001-02. 2005 has. vide its Order dated September 30. 246 . 2005 determined the lease deeds and allotment letters of EHIRC (“DDA Order”).526. amongst other hospitals. 2005. EHIRC filed a civil writ petition in the Delhi High Court challenging the show cause notice issued by Estate Officer.694. Delhi has completed the reopened assessments of the Delhi Society for four assessment years.e. The Division Bench of the Delhi High Court while issuing notice to the Estate Officer passed an interim order in favour of EHIRC directing that no final order on eviction can be passed by the Estate Officer. however. the exemption availed by the erstwhile Delhi Society by virtue of being an approved scientific research organisation has been withdrawn in these years. 2005 has directed the assessing officer to complete the assessments for all these years and has also directed that the operation of assessment orders for assessment years 1997-98. The Delhi High Court in March 2004. 1998-99. therefore. 1999-00 and 2000-01 shall remain suspended till matter is heard and decided by the Court. (b) The Additional Commissioner of Income-tax. assessment years 1997-98. EHIRC) is void. The Hon’ble Court in its interim order dated September 20. i. 1956 (i. The Estate Officer of the DDA issued a show cause notice dated November 9. 2003 (certain statutory records of the Company were impounded. which are still in possession of the Authorities). The LPA is pending before the Delhi High Court. 17. The Delhi High Court.1243.Registration Act. 1998-99.985. further.91 millions (including interest of Rs. 1860 and subsequent incorporation of EHIRC Chandigarh Society (post amalgamation) into a Company under Part IX of the Companies Act. The Company has filed appeals before the Commissioner of Income– tax (Appeals) for all these years. The Company is of the view that the demand raised for the assessment year 2001-02 includes duplication on account of demands raised in the assessment years 1997-98 to 2000-01 and. 1999-2000 and 2000-01.60 millions by treating the excess of assets over liabilities as short term capital gains on registration of the Amalgamated Society as this Company. EHIRC thereafter filed Letters Patent Appeal (LPA) against the above order before the Delhi High Court. has also raised a demand of tax amounting to Rs. regarding amalgamation of Escorts Heart Institute and Research Centre. 1996 has been brought to tax and the incomes of the respective years thereafter have been subject to tax as normal business income.91 millions).291. which is pending disposal. The Company feels that the above registration does not give rise to transfer of assets and consequent capital gains and. Pursuant to the survey.e.. raising a further demand of Rs. The Company has challenged the reopening of assessment year 1997-98 before the Delhi High Court in a writ petition filed on July 27. (a) The Income-tax Authorities carried out a survey on August 21. EHIRC has filed an Original Miscellaneous Petition and Civil Suit in the Delhi High Court seeking a declaration that the DDA Order is illegal and praying for a permanent injunction restraining DDA from dispossessing EHIRC without due process of law. the events taking place in the year 2000 cannot relate back to earlier years. concerning the applicability of certain free bed conditions on certain plots of land allotted to EHIRC by DDA. Delhi High Court has granted a stay restraining DDA from recovering physical possession of the property.60 millions). only ordered the parties to maintain status quo as of September 30. The matter is being duly defended in the Court and is pending before the Delhi High Court. Delhi (Delhi Society) with a society at Chandigarh with a similar name (Chandigarh Society). which was dismissed by the Hon’ble Single Judge. made EHIRC a party to a Public Interest Litigation (PIL) filed in July 2002 (Social Jurist matter). the Income-tax Authorities have re-opened the assessments of Chandigarh and Delhi Societies. Chandigarh.

1961.00 millions (previous year Rs. 2005 before the Commissioner of Trade and Taxes (“Commissioner”). diet. 2005) Fortis Healthcare Limited (w.62. The Commissioner. September 29. devices.275.64 millions (previous year Rs. which is pending for disposal. which are administered in the course of treatment of patients..00 millions) have also been given by the Company in respect of financial assistance availed by one of these subsidiaries companies. The management is confident that there is no permanent fall in the value of such investments or advances as the healthcare business would register a significant growth in future.42. September 29. such investments have no permanent diminution and the loans and advances to these subsidiary companies are good and fully recoverable. 2006.e. 1. “Health Care Services”. In view of the management. A. drugs. The Company has out of an abundant caution. Related party disclosures under Accounting Standard 18 I) Name of related party and nature of related party relationship 19. 20.f. Since the gestation period in such projects is comparatively longer. 2004.51 millions upto the previous year) in equity shares of certain subsidiary companies which also are involved in healthcare business. Holding Company Sr. the eventual outcome of the above matters cannot presently be estimated.76. made an estimated provision of Rs.80 millions in the matter. EHIRC has filed an appeal before the Delhi Value Added Tax Appellate Tribunal against the aforesaid Order of the Commissioner on April 27. has been completed for assessment year 2003-04 in the case of the Company whereby a demand of Rs. Accordingly. the Company submitted an application dated September 20.51 millions (including Rs.60 millions (previous year Rs. 18. the present losses in these subsidiary companies mainly reflect depreciation charge and finance cost besides certain temporary operational losses in one of these subsidiary companies. vide his Order dated March 17. hence. Further.(c) Regular assessment under section 143(3) of Income-tax Act. As the Company’s business activity falls within a single primary business segment. 21. Pursuant to a notice under Section 59 of the Delhi Value Added Tax Act. Ultimate Holding Company Sr. viz. No. New Delhi for determination of whether the Company is liable to pay tax under the provisions of the Delhi Value Added Tax Act.e.260.35.. Appeal has been filed before the Commissioner of Income-tax (Appeals) against the disallowances made in the assessment order which is pending disposal. the disclosure requirements of Accounting Standard (AS-17) “Segment Reporting”. No. consumables etc. 2006 has held that the Company is liable to pay Value Added Tax (“VAT”) on the said items.184. 1. 2004 in respect of medicines.4. 47. 2005) 2004-05 Escorts Limited 2003-04 Escorts Limited 2002-03 Escorts Limited 2001-02 Escorts Limited 247 .184. The application was made on the basis that the above items are not marketable commodities and.90 millions). without considering the items used in composite packages for which no separate bills are raised. corporate guarantees of Rs.42 millions has been raised. The Company has also provided to such subsidiaries loans aggregating Rs.60 millions) and other recoverable advances on current accounts aggregating Rs. 2005-06 Escorts Limited (till September 28. 2005-06 Fortis Healthcare Holdings Limited (w.f. are not goods. issued by The Institute of Chartered Accountants of India are not applicable. The Company has made strategic investments amounting to Rs. implants. although it is of the view that no such liability would arise. The accumulated losses in these companies have resulted either in substantial erosion or negative net worth of these companies. 2005) 2004-05 2003-04 2002-03 2001-02 B.

7. - - Escosoft Technologies Limited Esconet Services Limited Iserve India Solutions Private Limited - 6. 2005-06 2004-05 2003-04 Escotel Mobile Communication Limited 2002-03 2001-02 - 248 . 11. 2005-06 Escorts Heart and Super Speciality Institute Limited Escorts Heart Centre Limited Escorts Hospital and Research Centre Limited Escorts Heart and Super Speciality Hospital Limited 2004-05 Escorts Heart and Super Speciality Institute Limited Escorts Heart Centre Limited Escorts Hospital and Research Centre Limited Escorts Heart and Super Speciality Hospital Limited 2003-04 Escorts Heart and Super Speciality Institute Limited Escorts Heart Centre Limited Escorts Hospital and Research Centre Limited Escorts Heart and Super Speciality Hospital Limited 2002-03 Escorts Heart and Super Speciality Institute Limited Escorts Heart Centre Limited 2001-02 Escorts Heart and Super Speciality Institute Limited Escorts Heart Centre Limited - 2. No. 4. 3. Fellow Subsidiaries Sr. 1. Subsidiary Companies Sr.C. 1. No. 1. IFS Solutions India Private Limited International Hospital Limited Oscar Bio-Tech Private Limited IFS Solutions India Private Limited - IFS Solutions India Private Limited - Cellnext Solutions Limited Escolife IT Services Private Limited Escorts Telecommunicati on Limited - - - - - D. Cellnext Solutions Limited Escolife IT Services Private Limited - Cellnext Solutions Limited Escolife IT Services Private Limited - Cellnext Solutions Limited Escolife IT Services Private Limited - 9. - - E. 3. 10. 2005-06 2004-05 2003-04 2002-03 Escorts Hospital and Research Centre Limited Escosoft Technologies Limited Esconet Services Limited Iserve India Solutions Private Limited 2001-02 Escorts Hospital and Research Centre Limited Escosoft Technologies Limited Esconet Services Limited Iserve India Solutions Private Limited Escotel Mobile Communication Limited - 2. No. Escosoft Technologies Limited - Escosoft Technologies Limited - 5. 8. Joint Venture of Holding Company Sr. 4.

73 (Dr.62 (Dr.00 2002-03 0.e.) 5.00 2001-02 0.79 2. Ritu Nanda (Managing Director) Mrs. 2001) under Accounting Standard . b) Lease rent charged to the profit and loss account in the reported five years: (Rs.) 10.94 5. September 29. 2005] Mrs. Enterprises significantly influenced by Key managerial personnel Sr.50 (Rs.80 2.f.) 15.f.00 125.82 5. Harpal Singh (Chairman) [w. Ritu Nanda (Managing Director) [till September 28. 2005] 2004-05 2003-04 2002-03 2001-02 - 22.00 (Dr.22 2004-05 11.55 50. Ritu Nanda (Managing Director) 3.e.00 2003-04 0.f.65 31. 2005] 2004-05 Mr.16 (Dr.e.92 2.03 2004-05 0. Mrs. Rajan Nanda (Chairman) [till September 28. September 29. September 29.00 60.04 0.01 0. 2005-06 Ranbaxy Laboratories Limited [w. 2005-06 Mr.94 Refer to note 5b above 249 .53 135. No.44 16.10 Particulars Lease rent II) Transactions with related parties 2005-06 13.04 0.94 4. Rajan Nanda (Chairman) 2002-03 Mr. Malvinder Mohan Singh (Director) [w.00 (Dr.92 (Dr.) 135. Rajan Nanda (Chairman) 2001-02 Mr.94 3. in millions) 2002-03 2001-02 6.05 0.55 150.50 (Cr.00 (Cr. No.e.53 25. - - - - G.) 200.86 22. Shivinder Mohan Singh (Managing Director) [w. Rajan Nanda (Chairman) 2. September 29.00 220. Some of the significant terms and conditions of the arrangement are: agreements may generally be terminated by either of the party by serving three months notice or by paying the notice period rent in lieu thereof.00 30.) (Dr. in millions) 2005-06 Escorts Limited (erstwhile holding company) (a) Sale of assets (b) Rendering of services (c) Receiving of services (i) Rental and hire charges (ii) Management contracts/deputations (iii) Others (d) Interest accrued / received on inter corporate deposits (e) Purchase of investment (f) Inter corporate deposit: (i) Given (ii) Received back / adjusted (g) Closing balances : (i) Amount payable / receivable (ii) (iii) (h) Inter corporate deposit Interest on inter corporate deposits Security by way of hypothecation 0.30 2003-04 8.00 285. assign or part with the possession of the premises. 2005] Mr. 2005] Mr. 1. Disclosure in respect of Operating leases (entered on or after April 1. 1.f.) 1. the Company cannot sublet. Ritu Nanda (Managing Director) Mrs.52 160. Key management personnel Sr.) (Dr.60 1.19 “Leases” issued by the Institute of Chartered Accountants of India: a) General description of the Company’s operating lease arrangements: The Company enters into operating lease arrangement for lease of residential premises for its employees. the lease arrangements are generally renewable on the expiry of lease period subject to mutual agreement.) 6.71 (Cr.94 3.67 3.47 5.) 3.) 5.F. 2005] Mr. Rajan Nanda (Chairman) 2003-04 Mr. Ritu Nanda (Managing Director) Mrs.57 7.

00 91.20 0.) 4.42 5.13 2.50 (Dr.) 12.00 0.63 0.98 - (Dr.) 0.65 (Dr.91 0.29 0.01 0.51 (Dr.27 (Dr.21 0.50 (Dr.20 4.30 151.57 0.09 3.20 (Dr.20 (Dr.) 61.) 2.80 1. in millions) 2005-06 Escorts Heart Centre Limited (a) Rendering of services (i) Management contracts / deputations (ii) Others (b) Equity contribution (c) Purchase or sale of goods (other) (d) Purchase of fixed assets (e) Sale of fixed assets (f) Interest income on loan (g) Loan given (h) Closing balances : (i) (ii) (iii) Amount receivable Loan Investment in equity shares 2004-05 2003-04 2002-03 2001-02 0.01 7.) 15.52 - - 0.81 0.00 (Dr.) 26.52 8.80 Refer to note 5c above (Rs.) 624.10 - 2.12 0.01 (Dr.94 (Dr.09 10.00 2.50 - 6.) 91.50 2.) 20.41 0.) 28.63 0.) 18.) 29.46 (Dr.10 15.38 6.) 3.03 (Dr.16 (Dr.) 15.) 23.99 (Dr.) 14.10 20.49 - - - 250 .13 6.60 0.SUBSIDIARY COMPANIES: Escorts Heart and Super Speciality Institute Limited (a) Rendering of services (i) Management contracts / deputations (ii) Others (b) Equity contribution (c) Interest income on loan (d) Loan given (e) Purchase of goods (f) Closing balances : (i) Amount receivable (ii) Loan (iii) (g) Investment in equity shares Corporate Guarantee for financial assistance 18.03 (Dr.20 5.) 1.) (Dr.49 0.16 0.) 12.29 51.60 (Dr.57 17.07 2.15 0.60 (Dr.87 (Dr.00 (Dr.) 169.) 7.80 (Dr.) 624.05 (Dr.) 1.46 28.12 0.81 4.) 8.) 42.45 (Dr.67 0.00 (Dr.) 20.42 0.04 10.) 8.) 15.) 169.51 5.00 (Dr.30 16.46 - 0.17 (Dr.25 Escorts Hospital and Research Centre Limited (a) Receiving of services (b) Rendering of services (i) Management contracts / deputations (ii) Others (c) Purchase of assets (d) Closing balances : (i) Amount receivable (ii) Investment in equity shares Escorts Heart and Super Speciality Hospital Limited (a) Equity contribution in cash (b) Share application money (c) Transfer of fixed assets (d) Rendering of services (e) Loan given (f) Closing balances : (i) Amount receivable (ii) Investment in equity shares (iii) Share application money (iv) Loan 11.) 5.60 (Dr.) 624.) 23.43 (Dr.00 (Dr.00 (Dr.) 91.39 0.77 (Dr.00 28.73 (Dr.10 (Dr.46 (Dr.47 (Dr.) 0.87 15.33 0.00 (Dr.21 5.49 0.) 28.) 8.25 85.52 0.21 6.

96 1.32 0.01 5.01 (Cr.23 0.25 (Cr. in millions) I Serve India Solutions Pvt.) 3.) 0. Ltd.) 0.) 0. (a) Receiving of services (i) Software development charges (ii) Others (b) Closing balance Amount payable ENTERPRISES SIGNIFICANTLY INFLUENCED BY KEY MANAGERIAL PERSONNEL Ranbaxy Laboratories Limited (a) Rendering of services (b) Closing balance Amount payable KEY MANAGEMENT PERSONS: (a) Remuneration to key management persons (b) Assignment of Keyman insurance policy (c) Closing balance : Amount Payable - - - 0.82 10.09 0.10 - 0.10 (Cr.03 - 0.) 2.) 0.79 (Cr.63 19.03 0.05 9.69 - 1.00 (Dr.00 - - - - 0.03 - 0.) 5.) 0.) 9.) 0.41 8.10 - - - - - 0.) 0.) 0.26 0.24 0.59 - - - 0.03 (Cr.49 16.09 - 0.40 (Cr.01 2005-06 2004-05 2003-04 2.11 10.59 - 13.03 0.38 2002-03 0.76 2.17 (Cr.35 1.73 18.) 2. in millions) 2005-06 FELLOW SUBSIDIARIES: Escosoft Technologies Limited (a) Receiving of services (i) Management contracts / deputations (ii) Software development charges (iii) Others (b) Closing balance Amount payable Cellnext Solutions Limited (a) Receiving of services (i) Software development charges (ii) Others (b) Closing balance Amount payable IFS Solutions India Private Limited (a) Receiving of services (b) Closing balance Amount payable Escolife IT Services Private Limited (a) Receiving of services (i) Management contracts / deputations (b) Closing balance : Amount payable Escorts Telecommunications (a) Rendering of services (b) Closing balance : Amount receivable Esconet Services Limited (a) Sale of assets (b) Rendering of services (c) Receiving of services (i) Management contracts / deputation (d) Closing balance Amount payable Escotel Mobile Communications Limited (a) Rendering of services Escorts Hospital and Research Centre Limited (a) Rendering of services (b) Receiving of services (i) Management contracts / deputation (ii) Others (b) Interest received on inter corporate deposits (c) Inter corporate deposit given / repaid (d) Closing balance Amount payable / receivable 2004-05 2003-04 2002-03 2001-02 0.02 5.) 0.67 (Cr.62 (Cr.(Rs.30 (Cr.25 - - 0.) 0.14 5.17 0.23 (Cr.) 0.01 0.25 0.94 (Cr.51 (Cr.) 2.92 0.02 2001-02 (Rs.84 (Cr.77 (Cr.04 - 0.78 - 0.30 251 .27 (Cr.41 0.

89 41.62) (194.28 (2.03 15.50) 15.46) 18.02) 0.01) C 183.58 (269.79 (84.16 (99.17) 282.08 (19.58) 354.86) (1.19 338.96) 222.36) (10.00 22.18 270.66 149.02 (57.28 25.57 406.10 (60.01) (8.48 66.62 213.73) 296.51 0.32 (22.42 (84.82 (35.90) (60.11) 264.80) (22.32) 77.96) 23.00) (18.70) (125.53) 218.57) 0.04) (329.50 113.14 (244.61 (209.IV STATEMENT OF ADJUSTED CASH FLOW (Rs.21 27.34 (640.08) 0.86 22.25 367.83 (103.29 (56.21 15.42 114.69 272.15 150.00 250.38) 109.46 (0.07 (137.50 (10.90) (24.95 91.74) 0.26 9.48) 70.00) 150.08 (28.01) (19.05) 4.15) (303.11) 0. in millions) Particulars 2006 A CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax and extraordinary items Adjustment for : Depreciation Provision for diminution in value of investments Profit on sale of fixed asset Loss on sale of fixed asset Profit on sale of investments Interest expenses Interest income Dividend income Operating profit before working capital changes Adjustments for working capital changes: Trade and other receivables Inventories Trade and other payable Cash generated from operations Direct taxes paid Net cash from operating activities CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of fixed assets Investments in shares of subsidiaries Purchase of other investments Loan to subsidiaries Inter corporate deposits given Inter corporate deposits adjusted/repaid Sale of investments Interest received Dividend received Net cash (used) in investing activities CASH FLOW FROM FINANCING ACTIVITIES Proceeds from long term borrowings Repayment of long term borrowings Interest paid Net cash from / (used) in financing activities Net increase / (decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents as at the beginning of the year Cash and cash equivalents as at the end of the year 2005 Year ended March 31.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE .40 6.21 (96.19 (116.00 366.67) 46.22) (24.45 (0.30 62.17) 343.71 78.00) 40.82) (67.82) 385.51) (4.07 134.90) 61.25 303.86 297.20) (283.90) 213. 2004 2003 2002 115.79 (0.36 1.28) (1.37 (112.94) 105.14 (1.57 (93.59) 4.27 208.11 Refer to Annexure III for significant accounting policies and notes.86) (70.00) 60.00 78.33) 212.67) (4.99 (90.49 185.36) (35.37 (0.00 10.33) 10.29) 1.16 (594. 252 .96 31.86) (15.30) 3.00) 357.50 B (158.23 (109.48 (0.05 (259.20) (1.59 214.83 46.50 (225.17 (108.36 (95.11 109.00) 135.27) 15.

17 893.11% Notes: Definition of ratios Earning per share = {Adjusted Profit/(loss) after tax as per Statement of Adjusted Profits and Losses} / {Weighted average number of shares} Net asset value = {Net worth as per Statement of Adjusted Assets and Liabilities} / {Weighted average number of shares} {Adjusted Profit / (loss) after tax as per Statement of Adjusted Profits and Losses} / {Net worth as per Statement of Adjusted Assets and Liabilities} Return on net worth = 253 .91 89.89 6.43 14.67 798.68 1. 2004 2003 10 10 10 69.77 3.29 95.68% 2002 10 112.087.09 983.46 1053.64% 9.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE .19% 2005 Year Ended March 31.08% 10.V SUMMARY OF ACCOUNTING RATIOS Particulars Nominal value of shares Earnings per share Net asset value per share Return on net worth Unit Rupees Rupees Rupees Percentage 2006 10 34.

67 132.98 B (B) (A)+(B) (C) (A)+(B)+(C) (B)/(C) 20.52 115.175.VI STATEMENT OF CAPITALISATION (Rs.87 2.Secured loans .46 287. in millions) As at March 31.00 2.87 2.Unsecured loans Total Long term debts . 2006 Particulars Borrowings: Short term debts .06 D E Note: Post issue Capitalisation Statement : Not applicable 254 .52 155.85 0.463.155.Unsecured loans Total Total debts C Shareholders' funds: Equity Share Capital Reserves and surplus Total Shareholders' funds Total Capitalisation Long term debt / Equity ratio A (A) 155.Secured loans .79 16.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE .

51) 93.50% 21.87) (47.73 78.66 214.ESCORTS HEART INSTITUTE AND RESEARCH CENTRE LIMITED ANNEXURE .07 115.89 (0.06 16.97 4.20 15.14) (35.55 0.42 367.65) (12.59% 35.12 (15.58) 72. Seth (Partner) Membership No.66 253.56 (58.65) (17.40% Particulars Normal tax rate (including surcharge and education cess) Concessional tax rate for long term capital gain (including surcharge and education cess) Profit taxable at normal rate Profit taxable at concessional rate Net profit before tax as per Statement of Adjusted Profits and Losses Tax at Notional Rate Adjustments: Difference between tax and book depreciation Accrued expenses deductible on payment basis Other adjustments Net adjustments Tax (saving) / expense thereon Tax as per income tax Deferred tax charge / (benefit) For A.07) 126. 2005 2004 2003 2002 36.47 (49.20) (5.22 131.44% 115.66% 22.71 367. in millions) Year ended March 31.27 30.96 272.06) 49.70% 20.93 (0.17055 Place: New Delhi Date: September 29.00% 20.93) 11.72 111.91% 20.63) 12.85 (1. Ferguson & Co.55 94.05) (26. F.71 38.33 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 255 .51 55. 2006 2006 33.15 301.75% 35.M.78 (49.26) (5.31) 11.19 18.86 303.24 (16.07 214.93 13.97 23.44) 13. Chartered Accountants J.79) 81.14 (14.71 18.88% 36.23 18.56 1.VII STATEMENT OF TAX SHELTER (Rs.

enclosed as Annexure-III. The details of transactions with the related parties in accordance with the Accounting Standard 18 – Related Party Disclosures issued by the Institute of Chartered Accountants of India (refer to note 15 in Annexure-III). 2003. enclosed as Annexure-IV. We have examined the financial information of Escorts Heart and Super Speciality Institute Limited (the Company). 2003. ii. requesting us to examine the financial information referred to above in connection with the proposed initial public offer of equity shares. enclosed as Annexure-VI. which has been prepared in accordance with the requirements of: i. enclosed as Annexure-VII. The Company had no other class of shares during these years. 2002.110025 Dear Sirs. 2004. 2005 and 2006 (Annexure-II) (Summary Statements).AUDITORS’ REPORT The Board of Directors Escorts Heart and Super Speciality Institute Limited Okhla Road New Delhi . we confirm that: i. 2004. 2005 and 2006 (Annexure-I) and the accompanying Statement of Adjusted Profits and Losses of the Company for the financial periods/years ended on March 31. 2006 has been adjusted in that year in the Summary Statements (refer to note 7 in Annexure III). Financial information of the Company 1. ii. Based on our examination of these Summary Statements. The significant accounting policies followed by the Company and notes pertaining to the Summary Statements. 1956 (the Act). 1992. Statement of Tax Shelter. Statement of Capitalisation as at March 31. Paragraph B (1) of Part II of Schedule II to the Companies Act. There are no extraordinary items which are required to be disclosed separately in Summary Statements. We have examined the following financial information relating to the Company. 2003. Summary of accounting ratios based on the adjusted profits relating to earnings per share. 2. 256 . vi. There are no material amounts relating to the previous years which needs to be adjusted in arriving at the profits/losses for the years to which they relate irrespective of the year in which the event triggering the profit or loss occurred. There is no change in accounting policies which required adjustments to arrive at the Summary Statements. 2000 (‘the SEBI Guidelines’) issued by the Securities and Exchange Board of India (‘SEBI’) and amendments made thereto from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act. 2005 and 2006 on the equity shares. ii. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. 2004. no dividend has been paid by the Company in respect of each of the financial years ended on March 31. v. The Summary Statements have been extracted by the Company from the financial statements of the Company for the respective periods. 2003. Statement of Adjusted Cash Flows. attached to this report: i. 2006. The instructions received from Escorts Heart Institute and Research Centre Limited (the holding company of the Company). by Fortis Healthcare Limited. duly approved by the Board of directors and audited by us. iv. and iv. We further report that as per the books and records produced to us. enclosed as Annexure-V. net assets value and return on net worth. 3. The qualification in Audit Report on the accounts for the year ended March 31. annexed to this report. There were no qualification in the auditors’ reports on the financial statements for the financial years ended on March 31. 2002. We have examined the attached Statement of Adjusted Assets and Liabilities of the Company as at March 31. and iii. 4. 2004 and 2005. iii. 2002. iii. the holding company of Escorts Heart Institute and Research Centre Limited.

the holding company. This report is intended solely for your information and for forwarding it to Fortis Healthcare Limited. Ferguson & Co. 2006 257 . For A. F. Chartered Accountants J. for the purpose of inclusion in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose without our prior written consent.5.17055 Place: New Delhi Date: September 29. Seth (Partner) Membership No.M.

25 4.99 49.23 0.69) 249.34 301.40 444.88 404.04 286.69 21.60 99.77 139.16 - B C D 13.57 148. loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Total Liabilities and provisions Secured loans (including interest accrued and due) Unsecured loans Current liabilities and provisions Total Net worth .58 412.73 437. Seth (Partner) Membership No.19 18.06 51.18 301.M.Total (A+B+C+D-E) Represented by 1.67 88.02 14.26 2.71 409.78 29.01 39.89 188.41 4.76 49.40 257.18 74.49 257.83 9.17055 Place: New Delhi Date: September 29.09 4.17 14.26 1.80 20.26 (90.84 98.69) 157.08 88. Ferguson & Co. in millions) As at March 31.16 26.02 39.99 6.26 (90.10 45.24 49.90 246.52 144.61 1.01 3.77 244.76 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 258 .72 28.08 144. Reserves and surplus (represents share premium) Total Less : Miscellaneous expenditure to the extent not written-off or adjusted Less : Debit balance in profit and loss account Net worth For A. Chartered Accountants J.59 2.85 56.90 123.60 64. 2006 445.76 F G 157.83 3.60 162. F.06 60.57 38.57 332.43 8.91 2.99 352.19 3.86 98.50 23. 2005 2004 2003 2002 Particulars 2006 A Fixed assets Gross block Less : Depreciation Net Block Capital work-in-progress Total Project and preoperative expenditure Deferred tax assets (net) (refer to note 7 in Annexure III) Current assets.59 132.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE .98 0.40 - 445.60 196.49 2.20 347.88 4.11 352.87 2.97 15.72 26.21 39.81 4.42 E 261.61 2.60 112.85 8.62 0.71 312.10 91.44 23.11 3.45 153. Share capital 2.01 39.60 74.13 87.I STATEMENT OF ADJUSTED ASSETS AND LIABILITIES (Rs.59 16.60 179.51 39.12 77.61 132.60 196.

49) 62.38 125.04 4.68) 16.86 136. 2005 Year ended March 31.12 63.84 6.10 130. F. in millions) Period 2 months ended ended March 31.25 232.09 (26.13) 33.04 25.65 2. For A.69 143.66 54.32 18.84 183.13 29.64 (60.17055 Place: New Delhi Date: September 29.23 7.32 4.28 44.98 3.33 0.35) 24.81 150.59) - * Hospital commenced its commercial operations from February 1.87 0.49) 8.73 (82. 2006 Year ended March 31.47 182. March 31.15 - 87.68) 52.67 (57.38 (66.Deferred tax (charge)/benefit (Loss) after tax 186.28 12.83 (42.40) (141. Chartered Accountants J.II STATEMENT OF ADJUSTED PROFITS AND LOSSES (Rs.50 6.99 0.25 43.85 0.58 226.33 1. 2004 Income Operating income: Income from: In-patients Out-patients Less : Subsidy Other Income (refer note 3 in Annexure III) Total Expenditure Materials consumption Staff costs Professional fees Other operating expenses Administration and other expenses Miscellaneous expenditure written-off Interest Depreciation Total (Loss) before tax Provision for taxation : .76 36.04 33.15 250. Seth (Partner) Membership No.01 (94.30 11.50 1.17 0.84 12.45 53. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 259 .52 4.75 14.57 201.69 2.69) (0.36 149.50 0.11 39.04 46.61 156.93 7.Fringe benefit tax .62 24. 2003.M.32 13.18 1.11 1.23 10.09 5. 2002* 2003 Particulars Year ended March 31.40) (74.95 5.88 11.57 0.89 131.04 31.09 30.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE . Ferguson & Co.

though incurred by the Company but ownership of which belongs to Punjab State Electricity Board (PSEB). taxes and other incidental expenses relating to acquisition and installation of assets. 2002. Inventories Stores and spares are valued at cost or under. where the exchange differences are adjusted in the carrying amount of concerned fixed assets. Weighted average method is used in determining the cost of inventories. 1956. h) Taxation The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act.) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date. 1961. The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which they arise except where the foreign currency liabilities have been incurred in connection with fixed assets acquired up to March 31. 2005 AND 2006 1.III SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF STATEMENT OF ADJUSTED ASSETS AND LIABILITIES AND STATEMENT OF ADJUSTED PROFITS AND LOSSES FOR THE PERIOD / YEARS ENDED MARCH 31. payables. Foreign currency transactions Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing at the time of transaction.e. Medical consumables and drugs and pharmaceuticals are valued at the lower of cost and net realizable value. 2004. loans. c) d) e) f) g) 260 . duties. Depreciation on additions/deletions is charged for the full month irrespective of the date of acquisition/deletion. 2002 and 2003. ii) Cost of independent feeder. Revenue recognition Revenue is recognised on an accrual basis and includes value of services rendered pending billing in respect of in-patients undergoing treatment as at the end of the financial period except in respect of the years ended March 31. Cost of acquisition is inclusive of freight.. Significant accounting policies a) Fixed assets i) Fixed assets are stated at cost less accumulated depreciation. 2003. receivables. b) Depreciation Depreciation on fixed assets is provided on the written down value method on a pro-rata basis at the rates specified in schedule XIV to the Companies Act. Monetary items (i. etc. All other borrowing costs are recognized as an expense in the year in which they are incurred. 2004 and subsequent thereto in case of fixed assets acquired from a country outside India. (Also refer to note 2 below) Borrowing costs Borrowing costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of cost of such asset upto the date the assets are put to use.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE. is being amortized over a period of 5 years.e. bills raised. Retirement benefits Provision for gratuity and leave encashment benefits are determined on an actuarial valuation at the year-end and the Company’s contributions to the provident and other funds are charged against revenue every year. in which revenue from patients was recognised on discharge of the patients i.

2003.30 2002-03 (Rs. plant and machinery. 2002. 2003 being:a) project and preoperative expenditure other than expenditure which can be allocated directly have been allocated to buildings.30 261 . March 31. 2005 and 2006 and the Statement of adjusted assets and liabilities as at March 31. ii) k) Impairment of fixed assets Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company’s fixed assets.2 of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. 2000. 2004.Deferred tax is recognized. subject to the consideration of prudence. 5.36 Miscellaneous 0.84 0. 2003.10 Total 0. March 31. 2003. 2004. In assessing value in use. These statements have been prepared by extracting from the audited profit and loss accounts and balance sheets for the aforesaid years after making therein the disclosures and adjustments [refer to note 7 below] required to be made in accordance with the provisions of paragraph 6. 0. an asset’s recoverable amount is estimated. February 1. 2002. The recoverable amount is greater of the net selling price and value in use. March 31.18 Profit on sale of assets 0. Contingent liability not provided for in the reported five years / periods: Particulars Claims against the Company acknowledged as debts 2005-06 not 2004-05 0. arising in and incidental to normal business activities of the Company. 2003.02 0. the estimated future cash flows are discounting to their present value based on an appropriate discount factor. medical equipments and furniture and fixtures in the ratio of direct cost of concerned assets. and b) indirect expenditure not related to construction activity has been carried forward under the head “Project and preoperative expenditure” to be written off over a period of 5 years from the date of commencement of commercial production i.81 0. The Statement of adjusted profits and losses for the financial period / year(s) ended on March 31. NOTES 2.10.28 The above other income is of recurring nature. 2003. being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.89 0. 2004 and 2006 is as under: (Rs. 4. 2004. in millions) 2001-02 1.30 2003-04 0. on timing differences.50 3. The Company has not declared any dividend during the financial years ended March 31.79 0. 2003 2004 2005 2006 Interest on fixed deposits 0. The analysis of the other income arrived as per the Statement of adjusted profits and losses in the period / years ended March 31. If any indication exists. 2002. in millions) 2 months Year Year Particulars Year ended ended ended ended March 31. (Refer to note 7 below) i) Miscellaneous expenditure (to the extent not written off or adjusted) i) Preliminary expenses and project and pre-operative expenses incurred during construction period are written off over a period of 5 years from the date of commencement of commercial operations. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount.84 0. 2005 and 2006. 2005 and 2006 reflect the profits and losses and assets and liabilities for each of the relevant period / years indicated above. Project and preoperative expenditure incurred upto January 31.53 0.e.

34 0. the management was of the view that there will be sufficient future taxable income against which the net deferred tax assets will be realized.58 0. 2005 As at March 31.80 unabsorbed depreciation Accrued expenses deductible on 0. 2006: Name of the Institution / Bank Loan outstanding as at March 31. the holding Company Total 9. in millions) As at As at As at As at As at Description March 31.24 Sub-total 14. March 31. March 31.09 0. in millions) As at As at As at As at As at March 31.82 Net deferred tax assets 74.81 60. Since the gestation period in such projects are comparatively longer and the losses reflect mainly depreciation charge and finance cost.09 * As the recognition of deferred taxation. March 31. March 31.48 28. 2003 and has incurred losses. in millions) 29.60 29. March 31.58 Deferred revenue expenditure 0.60 23. based on future projections.82 28. the Company recognized deferred tax assets in the following years: (Rs. Estimated amount of contracts remaining to be executed on capital account in the reported five years / periods: (Rs. 2006 As at March 31. 2002 2003 2004 2005 2006 Capital commitments 0. Annual analysis of Unsecured loans As at March 31.16 11.63 12.60 Rate of Interest (per annum) 9. 2002 Name of the Institution / Bank Long-term From others: Escorts Heart Institute and Research Centre Limited. March 31. 2004 As at March 31.40 49. in millions) As at March 31.93 1. 2002 2003 2004 2005 2006 * Deferred tax assets on: Accumulated losses and 88. March 31. Accordingly.60 23.60 29.21 13. 29. 2003 (Rs.73 16.61 62. Particulars March 31.78 0.6.10 20. has been a subject matter of audit qualification. 8.60 23.51 0. the holding company Total 262 . 2006.91 Deferred tax liabilities on: Accelerated depreciation 13.60 20.00 % Escorts Heart Institute and Research Centre Limited.11 payment Sub-total 88.42 The Company commenced its commercial operations from February 1. 2006 (Rs.10 62. 7.09 12.10 - Analysis of Unsecured loans taken by the Company as at March 31. in the absence of evidence with regard to virtual certainty of its realisation.60 23. the amount of net deferred tax asset has been adjusted in the Statement of adjusted profit and loss for the year ended March 31.

50 - 244.83) 2.78 0.considered good) As at March 31. March March 2004 31. in millions) As at March 31.10.91 As at March 31.91 - 248.50% Term loan from Punjab National Bank is secured by way of equitable mortgage of Company’s land and buildings and hypothecation of all other fixed assets and further secured by corporate guarantee given by Escorts Heart Institute and Research Centre Limited. Analysis of Sundry debtors (Unsecured .00% Twenty equal quarterly instalments commencing from December 2006 - refer to foot note (i) refer to foot note (ii) .80 51.92 5. 2006: Loan outstanding as at March 31.91 - 244.09) 4.Working capital loan Total (i) 12. Analysis of Secured loans taken by the Company as at March 31. Working Capital Loan from Punjab National Bank is secured by way of hypothecation of stocks of medicines including life saving drugs and further secured by a corporate guarantee given by Escorts Heart Institute and Research Centre Limited. the holding Company.Term loan 248.23 As at March 31.01 5.27 2. 2004 2.26 As at March 31.44 244.91 9. the holding Company. 2006 As at March 31.80 12. 2002 - Particulars Debts over six months Other debts Less: Advance against unbilled revenue per contra Net balance 263 .23) 38. 2006 (Rs. 2002 Name of the Institution / Bank Long-term From banks: Punjab National Bank State bank of India Interest accrued and due thereon Short-term From banks: Working capital loan from State Bank of India Working capital loan from Punjab National Bank Total 248. (ii) 12.42 (1. 2005 (Rs.07 27.31 (1.47 (1. in millions) As at As at As at March 31.87 261. 2003 (Rs.53 249.50 246.78 9.39 2.87 261. 2006 12.72 11. Annual analysis of Secured loans As at March 31. 2003 31.41 45. in millions) Rate of Interest (per annum) Name of the Institution / Bank Punjab National Bank Repayment Schedule Nature of security . 2005 0.

2005) E. (Lt.03 0. 2004 4.97 14. 2003) A. 2005) C.e. 2005) : Escorts Limited (till September 28.18 2. 15. Ultimate holding company D. October 15. As the Company’s business activity falls within a single primary business segment viz. September 29.69 As at March 31.16 4.29 2. 2006 2.51 0.12 3. 2005) (Holding company of Escorts Heart Institute and Research Centre Limited) Fortis Healthcare Holdings Limited (w. Gen.) Harcharan Singh (w. 2003-04) 264 .19 As at March 31. Analysis of loans and advances (Unsecured .f. September 29. “Healthcare Services”.56 0.83 Particulars Loans and advances recoverable in cash or in kind or for value to be received Advance tax (net of provisions) Total 3.e.83 2.13. 2005 2. Key Management Personnel : Dr.e.e. Related party disclosures under Accounting Standard 18 I) Name of related party and nature of related party relationship : Escorts Heart Institute and Research Centre Limited Fortis Healthcare Limited (w. Fellow subsidiary : Escorts Hospital and Research Centre Limited (w.85 0.f.f.considered good) As at March 31. 2002 2. the disclosure requirements of Accounting Standard (AS-17) “Segment Reporting”.f. issued by the Institute of Chartered Accountants of India is not applicable. Subsidiary of ultimate holding : Escosoft Technologies Limited company (upto September 28.85 As at March 31. 2003 (Rs. in millions) As at March 31. Holding company B.

50 2.51 0.13 0.64 1.39 0.60 2.10 - - 265 .47 23.34 0.15 0.68 0.13 18.60 42.77 20.10 0.60 20.50 2.01 51.42 0.33 0.12 16.60 26.29 - - - - FELLOW SUBSIDIARY Escorts Hospital and Research Centre Limited (a) Sale of asset (b) Sale of consumables (c) Balance as at the end of the year: (i) Amount receivable (Debit) SUBSIDIARY OF ULTIMATE HOLDING COMPANY Escosoft Technologies Limited (a) Receiving of services (i) Management contracts (b) Balance as at the end of the year: (i) Amount payable (Credit) KEY MANAGEMENT PERSONNEL (a) Remuneration to Key management personnel (b) Balance as at the end of the year: (i) Amount payable (Credit) - - 2.10 0.98 - 0.28 - - - 0.65 29.II) Transactions with related parties during the year: 2005-06 Escorts Heart Institute and Research Centre Limited (holding company) (a) Equity contribution in cash (b) Loan received (c) Interest on loan (d) Receiving of services (i) Management contracts / deputations (ii) Others (e) Sale / transfer of goods (f) Payment of licence fees (g) Balance as at the end of the year: (i) Amount payable (Credit) (ii) Loan Fortis Healthcare Limited (holding company) (a) Receiving of services (i) Professional services (ii) Others (b) (i) (c) (i) Rendering of services Professional services Balance as at the end of the year: Amount payable (Credit) 2004-05 2003-04 2002-03 (Rs.09 15.34 - - 0.00 2.15 0.10 0.29 - 45.24 - 61.00 3.57 0.14 0.05 23.05 - 1.10 0.17 - 17.60 8.23 0.15 - - - 0.10 6.13 - - - - 2.02 - - - - 0. in millions) 2001-02 6.10 1.03 - - - 0.57 1.10 - 15.

62) 2.68) 24.36) 0.52 (2.09 (1.59 8.18 6.45 (20.04 4.96 112.02 31.61) (0.24) 1.02) 17.44) (6.00 (26.69) (2.85 34.52) (13.31) 3.98 (0.62 39.40) 6.45) 13.35) 53.55 0.25 1.66) (22.13 (0.46) 8.20 218.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE .59 Refer to Annexure III for significant accounting policies and notes.26 16.89) 0.02) (2. 2005 (82.78 Year Ended March 31.04 (0.37 2004 (94.15 1.30 3.75 (3.50) (32.07) 0.58 1.42) (102.04) 33.03) (6.04 25.35) (0.37 (8.71) (96.42 (2.54) 2002 - (0.44) (2.68 38. in millions) Particulars 2006 A CASH FLOWS FROM OPERATING ACTIVITIES (Loss) before tax Adjustment for : Depreciation Miscellaneous expenditure written off Profit on sale of fixed asset Loss on sale of fixed asset Interest expenses Interest income Operating profit / (loss) before working capital changes Adjustments for working capital changes: Trade and other receivables Inventories Trade and other payable Cash generated from operations Direct taxes paid Miscellaneous expenditure Net cash from / (used) in operating activities B CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of fixed assets Project and preoperative expenditure pending allocation Interest received Net cash (used) in investing activities C CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital Proceeds from premium on equity Proceeds from long term borrowings (net) Repayment of long term borrowings Proceeds from short term borrowings (net) Loan from holding company Interest paid Net cash from / (used) in financing activities Net increase / (decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents as at the beginning of the year Cash and cash equivalents as at the end of the year (34.56 (8.88 0.03) 2.79) (269.07) (5.97) (0.13) 63.59 3.69) 44.66 1.12 1.50 6.06 (0.19 48.50 248.18) (12.95) (0.94) 1.88 63. 266 .90 (244.38) 19.83) 19.04) 34.45 5.04 (0.49 17.62 (0.02) 33.27 2003 (42.49) (3.08 (0.01) 273.26 1.18) (66.69) (0.60 23.23 0.12) (4.28 3.18 (269.35) (7.IV STATEMENT OF ADJUSTED CASH FLOW (Rs.16 17.19 2.04 6.02) (8.61 (33.35) (11.92) (11.

04% -20.73 -115.14% 2002 10 16.17 6.98) (4. 2005 2004 2003 10 10 10 (3.01) - Year Ended March 31.V SUMMARY OF ACCOUNTING RATIOS Particulars Nominal value of shares Earnings per share Net assets value per share Return on net worth Unit Rupees Rupees Rupees Percentage 2006 10 (9.87) (4.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE .89% -68.46 - Notes: Definition of ratios Earnings per share = {Adjusted Profit/(loss) after tax as per Statement of Adjusted Profits and Losses} / {Weighted average number of shares} Net assets value per share = {Net worth as per Statement of Adjusted Assets and Liabilities} / {Weighted average number of shares} {Adjusted Profit / (loss) after tax as per Statement of Adjusted Profits and Losses} / {Net worth as per Statement of Adjusted Assets and Liabilities} Return on net worth = 267 .42) 3.37 10.

38 B (B) (A)+(B) 157.51 291.04) (286.91 29.69 (3.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE .07) Note: Post issue Capitalisation statement : Not applicable 268 .60 278.VI STATEMENT OF CAPITALISATION (Rs.Secured loans .Unsecured loans Total Total debts C Shareholders' funds: Equity Share Capital Reserves and surplus Less: Miscellaneous expenditure to the extent not written-off or adjusted Less: Debit balance in profit and loss account Total Shareholders' funds D E Total Capitalisation Long term debt / Equity ratio (C) (A)+(B)+(C) (B)/(C) A (A) 12. 2006 Particulars Borrowings: Short term debts . in millions) As at March 31.Unsecured loans Total Long term debts .01 39.Secured loans .60 (1.87 248.69) 200.87 12.26) (90.

88% (94.VII STATEMENT OF TAX SHELTER (Rs.66% 36.26 0. 2003 36.ESCORTS HEART AND SUPER SPECIALITY INSTITUTE LIMITED ANNEXURE .17055 Place: New Delhi Date: September 29.06) (13.23) (1.35) 2 months ended March 31.87 12.67) (15.59% (66.51 0. 2006 * 2005 33.09) 269 .66 0.48) (38.75% (42.29 (3. Seth (Partner) Membership No.55 4. Chartered Accountants J.91) (24.99) (16.M.87) 0.42 0.68) 2004 35.87 (5.69) (82. Ferguson & Co.40 (6.23 74. in millions) Particulars Tax rate (including surcharge and education cess) (Loss) before tax as per Statement of Adjusted Profits and Losses Tax at Notional Rate Adjustments: Difference between tax and book depreciation Accrued expenses deductible on payment basis Other adjustments Net adjustments Tax (saving) thereon Tax as per income tax Deferred tax charge / (benefit) * Refer to note 7 in Annexure III For A.89) (33.64) (34.61) 0. F.62) (4. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor Year ended March 31.89 (13.17) 0.13) - - - - 11.

enclosed as Annexure-II. Since the Company has not commenced its commercial operations as yet. 4. The significant accounting policies followed by the Company and notes pertaining to the Summary Statement. There are no changes in accounting policies which required adjustments to arrive at the Summary Statement. and iii. 2005 and 2006 (Annexure-I) (Summary Statement). 2000 (‘the SEBI Guidelines’) issued by the Securities and Exchange Board of India (‘SEBI’) and amendments made thereto from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act. The Company had no other class of shares during these years. 270 . ii.AUDITORS’ REPORT The Board of Directors Escorts Heart and Super Speciality Hospital Limited Okhla Road New Delhi . We have examined the following financial information relating to the Company. enclosed as Annexure-IV. We further report that as per the books and records produced to us. enclosed as Annexure-III. Financial information of the Company 1. and iv. We have examined the financial information of Escorts Heart and Super Speciality Hospital Limited (the Company). iii. There are no extraordinary items which are required to be disclosed separately in Summary Statement. requesting us to examine the financial information referred to above in connection with the proposed initial public offer of equity shares. duly approved by the Board of directors and audited by us. ii. which has been prepared in accordance with the requirements of: i. the holding company of Escorts Heart Institute and Research Centre Limited. 2005 and 2006 on the equity shares. iv. ii. no Statement of adjusted profit and loss has been prepared. iii. which required adjustments to the Summary Statements. we confirm that: i. Paragraph B (1) of Part II of Schedule II to the Companies Act. attached to this report: i. 2004. 2006. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. There are no qualifications in auditors’ reports on the accounts for the above mentioned years. 1956 (the Act). The Summary Statement has been extracted by the Company from the financial statements of the Company for the respective periods. Statement of Adjusted Cash Flows. Statement of Capitalisation as at March 31. The instructions received from Escorts Heart Institute and Research Centre Limited (the holding company of the Company). 1992. 2. The details of transactions with the related parties in accordance with the Accounting Standard 18 – Related Party Disclosures issued by the Institute of Chartered Accountants of India (refer to note 9 in Annexure-II). Based on our examination of this Summary Statement. by Fortis Healthcare Limited. 2004.110025 Dear Sirs. We have examined the attached Statement of Adjusted Assets and Liabilities of the Company as at March 31. 3. no dividend has been paid by the Company in respect of each of the financial years ended on March 31. annexed to this report.

Chartered Accountants J. This report is intended solely for your information and for forwarding it to Fortis Healthcare Limited. Ferguson & Co. the holding company. 2006 271 . Seth (Partner) Membership No. for the purpose of inclusion in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose without our prior written consent.5. F.M.17055 Place: New Delhi Date: September 29. For A.

04 7.47 0. 2005 2004 * Particulars 2006 A Fixed assets Gross block B Project and preoperative expenditure C Current assets.46 119. 1.04 0.96 0.01 0.82 1.96 0.50 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 272 .82 1.50 0.01 119.16 117.01 0.14 0.M.01 0. loans and advances Cash and bank balances Loans and advances Total D Liabilities and provisions Unsecured loans Current liabilities and provisions Total E Net worth .50 28. Chartered Accountants J. F.ESCORTS HEART AND SUPER SPECIALITY HOSPITAL LIMITED ANNEXURE I STATEMENT OF ADJUSTED ASSETS AND LIABILITIES (Rs. Share application money pending allotment Net worth * The Company has been incorporated in the year 2003-04. Ferguson & Co. For A.17055 Place: New Delhi Date: September 29. Share Capital 2. # Rs.96 91.50 28.01 7.000.50 91. Seth (Partner) Membership No.99 1.Total (A+B+C-D) F R epresented by 1.30 7.01 0.46 119.01 119.69 7. in millions) As at March 31.96 0. 2006 117.00 0.01 # 1.

2004 3. in millions) 7. 2000. 2006 (Rs. 2006 7. Statement of Adjusted Profit and loss has not been prepared for the financial years ended on March 31. 2004. The Company has not declared any dividend during the financial years ended March 31. 2005 and 2006 reflect the assets and liabilities for each of the relevant years indicated above.00 7. Analysis of loans and advances (Unsecured .000.30 7. These statements have been prepared by extracting from the audited balance sheets for the aforesaid years after making therein the disclosures required to be made in accordance with the provisions of paragraph 6. Annual analysis of Unsecured loans As at March 31. As at March 31. NOTES 2. 1. 2005 (Rs. 5. The Company was incorporated on April 24. The Statement of Adjusted Assets and Liabilities as at March 31. the holding company Total 7.10. 2004 - # # 273 . 2004.2 of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. 2005 and 2006. 2005 (Rs in millions) As at March 31.00 - - Analysis of Unsecured loans taken by the Company as at March 31.ESCORTS HEART AND SUPER SPECIALITY HOSPITAL LIMITED ANNEXURE. 2004. 2006 As at March 31. 2005 AND 2006. in millions) As at March 31. 4. taxes and other incidental expenses relating to acquisition of assets. 2004. 2006: Loan outstanding as at March 31. 2003 and has yet to commence its commercial operations.00 Rate of Interest (per annum) Name of the Institution / Bank Escorts Heart Institute and Research Centre Limited.00 7. Name of the Institution / Bank Long-term From others: Escorts Heart Institute and Research Centre Limited Total 6. Cost of acquisition is inclusive of freight.considered good) Interest free loan Particulars Loans and advances recoverable in cash or in kind or for value to be received Total # Rs. 1. 7. Significant accounting policies a) Fixed assets Fixed assets are stated at cost. Hence.30 As at March 31. 2005 and 2006.II SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF STATEMENT OF ADJUSTED ASSETS AND LIABILITIES AS AT MARCH 31. duties.

Seth (Partner) Membership No.46 28.00 # # 91.46 - 0. A. Related party disclosures under Accounting Standard 18 I) Name of related party and nature of related party relationship : Escorts Heart Institute and Research Centre Limited : Fortis Healthcare Limited (w. viz.00 28.000. F.50 0. “Health Care Services”.1. the disclosure requirements of Accounting Standard (AS-17) “Segment Reporting”. Holding company B. 2005) : Escorts Limited (till September 28. Ferguson & Co. in millions) 2003-04 7.50 28.00 91. 2005) 9.45 0.8.f.50 - For A. 2005) (Holding company of Escorts Heart Institute and Research Centre Limited) : Fortis Healthcare Holdings Limited (w. Chartered Accountants J.M. September 29. September 29.. Ultimate holding company II) Transactions with related parties during the year: 2005-06 Escorts Heart Institute and Research Centre Limited (holding company) (a) Equity contribution in cash (b) Loan taken (c) Preliminary expenses incurred in connection with incorporation of the company (d) Share application money (e) Transfer of fixed assets (f) Preoperative expenses incurred (h) Balance as at the end of the year: (i) Amount payable (credit) (ii) Investment in equity shares (iii) Share application money (iv) Loan # Rs.f.46 91. 2004-05 (Rs.e. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 274 . issued by The Institute of Chartered Accountants of India are not applicable. As the Company’s business activity falls within a single primary business segment.46 7.17055 Place: New Delhi Date: September 29.e.50 28.

CASH FLOWS FROM OPERATING ACTIVITIES Changes in working capital Changes in trade and other receivables Net cash (used) in operating activities B.01 0. CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Preliminary and preoperative expenses Net cash (used) in investing activities C.36) (0.46) 7.46) (0. in millions) Year ended March 31. For A.ESCORTS HEART AND SUPER SPECIALITY HOSPITAL LIMITED ANNEXURE .000.50 0. Chartered Accountants J.00 7.1.00 0. F.67) (90.M. Ferguson & Co.00 (0.97 0.04 1.00 91.02) (0.30) (7.III STATEMENT OF ADJUSTED CASH FLOW (Rs.50 0.03) (0.04 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 275 . 2006 2005 2004 Particulars A.30) # # - (0.02) (89.69 91.01 0. CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital Loan from holding company Net cash from financing activities Net increase/(decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents as at the beginning of the year Cash and cash equivalents as at the end of the year Refer to Annexure II for significant accounting policies and notes. 2006 (7. Seth (Partner) Membership No.17055 Place: New Delhi Date: September 29.32) 1. # Rs.04 0.

Unsecured loans Total Total debts C Shareholders' funds: Equity Share Capital Share application money pending allotment Total Shareholders' funds D Total Capitalisation E Long term debt / Equity ratio Note: Post issue Statement of capitalisation : Not applicable For A. Seth (Partner) Membership No. Ferguson & Co.46 119. in millions) As at March 31.96 126.00 7.00 7.96 0.M.06 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 276 .Secured loans . Chartered Accountants J.Secured loans . F.00 (C) (A)+(B)+(C) (B)/(C) 91.17055 Place: New Delhi Date: September 29.ESCORTS HEART AND SUPER SPECIALITY HOSPITAL LIMITED ANNEXURE .50 28.Unsecured loans Total B Long term debts .IV STATEMENT OF CAPITALISATION (Rs. 2006 (A) - (B) (A)+(B) 7. 2006 Particulars Borrowings: A Short term debts .

which has been prepared in accordance with the requirements of: Paragraph B (1) of Part II of Schedule II to the Companies Act. 2004. In our opinion. The summary statements are based on the financial statements which have been audited and reported upon by us. 2006. requesting us to examine the financial information referred to above in connection with the proposed initial public offer of equity shares. 2005. Chartered Accountants Satish Kumar Gupta (Partner) Membership No: 82453 Place: New Delhi Date: September 28. 2004. Kapur & Co. Scindia House Connaught Place New Delhi We have examined the financial information of Escorts Hospital and Research Centre Limited (“the Company”) annexed to this report. 2004.1 of para ‘B‘ of Annexure 5 ). 2004. 2003 and 2002 on the equity shares. 2003 and 2002. by Fortis Healthcare Limited. 2004. and The Securities and Exchange Board Of India (Disclosure and Investor Protection) Guidelines. we confirm that (i) The changes in accounting policies which required adjustments to arrive at the summary statements have been carried out. 2004. 2003 and 2002 (“Summary Statements”) as prepared by the Company and approved by the Board of Directors.AUDITORS' REPORT SUMMARY STATEMENTS OF STANDALONE ASSETS AND LIABILITIES AS AT AND STANDALONE PROFITS AND LOSSES FOR THE YEARS ENDED MARCH 31. 1956 (the Act). We have also examined the significant accounting policies followed by the Company and notes pertaining to the Summary Statement. AS RESTATED. 2005. 2006. enclosed as Annexure 5. 2005. 2000 (‘the SEBI Guidelines’) issued by the Securities and Exchange Board Of India (‘SEBI’) and amendments made thereto from time to time in pursuance of section 11 of the Securities and Exchange Board of India Act. We further report that as per the books and records produced to us. Restated Financial Information of the Company 1. 3. 2005. 2006. 2006. These Summary Statements have been arrived at after making such adjustments as in our opinion are appropriate and are more fully described in the notes appearing in Annexure 5 to this report. 2003 and 2002 and the attached summary statement of restated profits and losses for each of the years ended on those dates and the attached summary statement of restated cash flows for the years ended March 31. 2003 AND 2002 AND STANDALONE CASH FLOWS FOR THE YEARS ENDED MARCH 31. 5.1992. ( Refer Note No.1 of para ‘B‘ of Annexure 5 ). We have examined the attached summary statement of restated assets and liabilities of the Company as at March 31. (iii) There were no qualification in the auditors’ reports on the financial statements for the financial years ended on March 31. This report is intended solely for your information and for the purpose of inclusion in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose without our prior written consent. the holding company of Escorts Heart Institute and Research Centre Limited. 11. OF ESCORTS HOSPITAL AND RESEARCH CENTRE LIMITED. 2006. 2. Based on our examination of these restated statements. ( Refer Note No. (iv) There are no extraordinary items which are required to be disclosed separately in Summary Statements. 4. The Board of Directors Escorts Hospital and Research Centre Limited. no dividend has been paid by the Company in respect of each of the financial years ended on March 31. (iii) The instructions received from Escorts Heart Institute and Research Centre Limited (the holding company of the Company). The Company had no other class of shares during these years.D. 2005. 2006 (i) (ii) 277 . (ii) Material amounts relating to adjustments for the previous years have been identified and adjusted in arriving at the profits/losses for the years to which they relate irrespective of the year in which the event triggering the profit or loss occurred. the ‘Restated Financial Information of the Company’ mentioned above has been prepared in accordance with Part II of Schedule II of the Act and the SEBI Guidelines. 6. 2003 AND 2002. For N. 2006. 2005.

76) 21.00 8.55 251.00 (14.85 19.87 (29.48 39.01 0.80 91.31 29.62 16. Faridabad ANNEXURE .61 35.00 0.02 0.17 159.26 16.55 (20.59 (1.00 0.30 21.00 20.00 0.99) 0.97 57.63 (102.29 63.00 0.41 108.86 11.50 34.47 3.00 32.72) 0.30 201. General and Administration Total Expenditure Profit/(Loss) (EBIDTA) Interest and Finance Charges Profit/(Loss) before Depreciation & Tax Depreciation Net Profit/(Loss) before Tax Fringe Benefits Tax Current Wealth Tax Expense Current Income Tax Expense Deferred Tax Income/(Expense) Net Profit/(Loss) after Tax Miscellaneous Expenditure written off Preliminary Expenses written off Income Tax/Wealth Tax Adjustment For earlier years Deferred Revenue Expenditure written off Net Profit/(Loss) after Extraordinary Items Exceptional Items Prior period Income/(Expenditure) Items Net Profit/(Loss) as per Audited Statement of Accounts (A) Adjustments on account of:Revenue accrued from in-patients pending billing Deferred Tax Income/(Expense) Depreciation Reduction/ (Increase) Profit/ (Loss) on sale of Fixed Assets Total Adjustments (B) 404.00 (0.00 0.44 70.00 (0.52 47.43 53.49) 269.00 0.75 121.00 (0.05 107.06 (5.40 2.00 0.06 13.58) 2.25) 0.00 (1.11 (7.13 0.00 0.27 93.00 337.90) 0.00 407.23 (20.1 Statement of Profit and Losses-Restated (Rupees in million) 2006 Year ended March 31.28 54.00 0.00) 0.97 0.87 (12.00 20.03 3.22 340.59 (23.56) 0.74 12.72) 0.80 3.17 21.69) (11.00 0.00 0.00 (2.79 18.00 0.62 0.00 (0.68) (18.45) 0.59) 52.17 (65.00 0.45) 0.69 30.29 99.01 27.85 (14.00 20.00 0.00 0.77 7.00 (65.00 0.02) 0.00 0.12 84.00 (20.58) 0.04) 0.02 (7.79) 189.00 0.62 0.00 0.Escorts Hospital and Research Centre Limited.35) 0.63 45.55 27.85) 20.62 50.56) 0.28 26.64 297.00 0.00 0.97 0.74 67.42) 278 .00 2.95 5.36 189.27 75.65 (1.56) 195.26) 0.00 37.00 0.04 64.00 (14.00 0.00 (0.83 13.34) (2.75 223.04) (0.34) (65.00 334.27 3.59 0.00 8.38 12.00 0.28 0.98 7. 2005 2004 2003 2002 INCOME Operating Revenue Other Income Total Income EXPENDITURE Materials Personnel Operating Selling.19 62.45 77.00 0.51 277.72) (0.00 0.06) 0.

00 (62.14) 14.06 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 279 .78) (22. Chartered Accountants Satish Kumar Gupta (Partner) Membership No: 82453 Place: New Delhi Date: September 28.67) (8.40) 0. 2006 (62. Kapur & Co.06 0.67) 0.46) 15.20 Carry forward Profit/(Loss) from previous year Balance available for Appropriation Transfer from/(to) General Reserve Profit/ (loss) transferred to Balance Sheet As per our report of even date attached For N.67) 0.67) (59.00 (20.00 (8.18) 14.D.00 14.06 (8.Adjusted Profit/(Loss) (A-B) 3.00 (42.18) (62.49) (33.18) 0.40) (42.00 (59.67) (42.40) (1.

44 34.65 4.00 53.59 0.67 48.00 230.23 44.92 5.00 7.47 50.05 0.67) 533.2 Statement of Assets and Liabilities – Restated (Rupees in million) 2006 APPLICATION OF FUNDS As at March 31.00 6.57 0.98 79.06 544.63 681.83 9.00 230.00 (42.06 Total SOURCES OF FUNDS Loan Funds Secured Loans Unsecured Loans Total Share Capital and Reserves 143. Faridabad ANNEXURE .33 0.00 533.00 564.40) 583.00 171.61 0.26 7.29 55.34 20.00 120.63 141.02 80. Kapur & Co.00 0.00 (8.97 30.75 512.00 0.00 51.01 170.00 3.83 82.08 0.76 52.72 0.30 0.30 257.00 230.56 96.51 204.56 105.10 534.78 21.00 141.99 12.14 2.39 116.37 483.52 31.95 55.27 481.70 2.00 230.35 156.35 0.67) 543.81 220.95 0.77 47.00 (59.00 55.00 80.02 0.93 6.00 14.35 727.00 220.95 0.65 4.79 0.79 7.74 37.61 220.49 12. 2005 2004 2003 2002 Fixed Assets: Gross Block Less: Depreciation Net Block Capital Work-in-Progress Total Investments Current Assets.00 0.58 0.54 105.39 8.00 6.12 84.03 8. Chartered Accountants Satish Kumar Gupta (Partner) Membership No: 82453 Place: New Delhi Date: September 28.00 230.48 0.15 0.04 3. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 280 .94 23.69 1. Share Premium) Profit and Loss Account Total As per our report of even date attached For N.00 0.51 44.00 8.54 218.81 0.58 0.00 156. Loans and Advances: Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Deferred Tax Asset Total (A) Current Liabilities and Provisions: Current Liabilities Provisions Deferred Tax Liability Total (B) Net Current Assets (A-B) Preoperative Expenditure Miscellaneous Expenditure not written off 737.00 583.00 0.42 0.81 564.00 544.80 83.87 5.00 543.18) 579.42 220.06 Equity Share Capital Reserves & Surplus (incl.91 0.00 (62.50 509.00 534.51 18.95 256.23 5.91 0.Escorts Hospital and Research Centre Limited.00 143.00 0.94 171.00 579.87 0.00 61.02 340.55 0.51 0.44 0.01 30.05 461.02 7.36 0.D.70 27.02 220.94 705.

26) (6.99 (0.26) 48.28 (11.19 0.84) 1.Escorts Hospital and Research Centre Limited. Chartered Accountants Satish Kumar Gupta (Partner) Membership No: 82453 Place: New Delhi Date: September 28.54) (12.80 13.36 1. Faridabad ANNEXURE .32) (18.73 33.51) 40.47) 12.87 10.38) (30.97 18.95 (35.58 55.17) (33.48 (52.37 (20.14 0. 2005 2004 2003 2002 7.57 61.12) 33.58 1.15) (0. As per our report of even date attached As at March 31.3 Statement of Cash Flows .33 2.49) (10.87 (79.60 0.21 139.33 46.53) (19.00) (16.48 21.33 (18.85) 0.31 30.51 (7.00 (0.02 0.34 0.00) (3.66 28.17 (0.68 (0.87 0.11 (0.01) (1.59 ) 0.52 8.89 20.41) 1.82 (137.00 (0.46) (11.95 4.83 0.84) 19.98 0.14 0.79 2.44 ) 0.84 0.33 For N.68) 0.17 0.99) (26.12 12.52) 39.02) 50.35 27.41 (13.77 13.94 5.13) 50.00 20.32) 69.95) 9.66) (0.27 35.22 (0.52) (157.21) (18.26 (1.52) (56.09 0.39 2.87 10.85 0.00 0.59 (10.31) 55.25 0.01) 3.34) 0.61 20.52 (15.68 (0.42 (26.24 0.48 4.27 1.24) 3.23 5.37) (2.35 12.40 48.25 (13.52 (1.Restated (Rupees in millions) 2006 Cash From Operating Activities Net Profit / (Loss) before tax Adustments for: Depreciation Loss/( Profit) on sale of Fixed Assets (Net) Assets written off Increase in Provision for Leave Encashment Interest on loans Interest received Cash from operations before working capital changes Adustments for: Inventories Debtors Other Current Assets Current Liabilities Cash from operations after working capital changes Fringe Benefits Tax Paid Income Tax/Wealth Tax refunds received/(paid) Net Cash From Operating Activities (A) Cash From Financing Activities Net secured loans taken/(paid) Interest paid on term loans Net cash From Financing Activities (B) Cash From Investing Activities Purchase of fixed assets Sale of fixed assets Movement in loans and advances given Interest received Net Cash From Investing Activities (C ) Increase (+)/Decrease(-) in cash and bank balances (A+B+C) Cash and cash equivalents as on Cash and cash equivalents as on NOTE: Figures in brackets denote cash outflows.95 (29.65 26.85 0.72) 32.52 (26.59) 47.12 (40.60 2. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 281 .98) 5. Kapur & Co.86 16.88) 2.65 45.05 1.45 (3.00 3.47) 0.48 7.00 (5.27) 0.D.28) 28.67) 1.61) (8.65 0.21) 1.95 (5.

00 (20.00 0.20 0. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 282 .20 2 22 22 22 22 22 3 22 22 22 22 22 4 390.28 For N.D.46) 15. in millions) Number of Equity Shares outstanding at the end of the year/period (Nos. Kapur & Co.28) (5.74 (0.00 3.69 21.06 0.09) 3.33 407.4 Summary of Accounting Ratios (Rupees in millions) Particulars 2006 As at March 31.54 (1.82 441.14 17.61 (1.60 464.49) 0.09 0. Faridabad ANNEXURE .78) (22.78) 0.00 (20.49) (33.00 15. in millions) Net Worth Accounting Ratios Earning per Share (1/2) Net Asset Value per share (4/3) (in Rs. Chartered Accountants Satish Kumar Gupta (Partner) Membership No: 82453 Place: New Delhi Date: September 28.93) 17.46) 0.07 0.33 387.Escorts Hospital and Research Centre Limited. 2005 2004 2003 2002 1 Net Profit after tax before Exceptional items Net Profit after tax Add: Exceptional Items Net Profit after tax before Exceptional items Weighted average number of Equity Shares outstanding during the year/period (Nos.02) 20.77 As per our report of even date attached (5.54) 18.) Return on Net Worth (1/4) (%age) 3.00 (33.00 (22.29) (8.

However. 52. changed the accounting policy by recognizing revenue from In-patients in respect of services rendered pending billing on the close of the financial year. The accounts for the financial years 2001-02 and 2002-03 have accordingly been restated to account for such change in the method of accounting for depreciation on Plant & Machinery. Fixed assets costing not exceeding Rs. 1956. 2005. Faridabad ANNEXURE . (v) Retirement Benefits The liability for gratuity is accounted for on the basis of demand raised by the Gratuity Trust on actuarial valuation basis. B) NOTES TO ACCOUNTS 1. Superannuation charges have been accounted for on the basis of the entitlement of the employees covered under the scheme. (iii) Fixed Assets and Depreciation Fixed assets are stated at cost less accumulated depreciation. 2006. with effect from 29th September 2005. The Company has provided a corporate guarantee of Rs.5. 3. (ii) Revenue Recognition Revenue is recognized on accrual basis which includes value of services rendered pending billing in respect of in-patients undergoing treatment as at the close of the financial year. the depreciation charged for the financial year 2003-04 included Rs. Due to the change in the shareholding pattern of Escorts Heart Institute and Research Centre Limited. (iv) Inventory Valuation Medical consumables. Accordingly. changed the method of providing depreciation on Plant & Machinery from Straight Line Method to Diminishing Balance Method at the rates prescribed in schedule XIV of the Companies Act.00 million) to the 283 . 2. B. These statements have been prepared by extracting from the audited profit and loss accounts and balance sheets for the aforesaid years after making therein the disclosures and adjustments required to be made in accordance with the provisions of the Securities and Exchange Board of India ( Disclosure and Investor Protection) Guidelines. Depreciation on Fixed Assets excluding Land is calculated on Diminishing Balance Method at the rates prescribed in schedule XIV of the Companies Act. The accounts for the financial years 2001-02 and 2002-03 have accordingly been restated to account for such change in the method of recognition of revenue. 1956. (vii) Preliminary Expenses Preliminary expenses/Fees paid for increase in authorized capital is charged to Profit & Loss account as and when incurred. stores and spares are valued at cost or realizable value whichever is lower. The Company is a wholly owned subsidiary of Escorts Heart Institute and Research Centre Limited. (vi) Leave Encashment The provision on account of Leave encashment benefit to employees is based on actuarial valuation. 35.each individually has been depreciated fully in the year of purchase. Weighted average method is used in determining the cost of inventories. The summary statement of restated profits and losses for the financial years/periods ended on March 31.5 SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS A) SIGNIFICANT ACCOUNTING POLICIES (i) Accounting Convention The financial statements are prepared under the historical cost convention on accrual method of accounting in accordance with applicable Accounting Standards and relevant presentation requirements of the Companies Act. become its ultimate holding company.28 million on account of differential depreciation for earlier years. 2003 and 2002 reflect the profits and losses and assets and liabilities for each of the relevant years/periods indicated above. construction of qualifying assets are capitalized as part of cost of such assets up to the date the assets are ready for its intended use. the depreciation on assets acquired/sold during the year is provided from/up to the month the asset is commissioned/sold. 2005. (viii) Borrowing Cost Borrowing costs that are attributable to the acquisition.Escorts Hospital and Research Centre Limited. All other borrowing costs are recognized as an expense in the year in which they are incurred. which in turn was a subsidiary of Escorts Limited (referred to as erstwhile ultimate holding company) up to 28th September. The Company had. 35. Fortis Healthcare Limited has. 2004. with effect from the financial year 2003-04.00 million (Previous year – Rs. with effect from the financial year 2003-04. which was recognized on discharge of such patients in the earlier years. 1956. 2000 as under :A.000/. The Company had.

80) 1.f. no sums are due to Small Scale & Ancillary Undertaking as at March 31.39 3. (B) Remuneration as Manager**.Governor of Haryana for the registration of Escorts Limited.48 0.23 2003-04 0.14 21. 2003.e. fixed monthly remuneration is being paid as per approval of the Central Government under applicable provisions of the Companies Act.11 2001-02 23.67 19. the Company has received a comfort letter from Fortis Healthcare Limited. 2005.06) 0.71) 284 . 4. However. 2005.53 2004-05 (25. As per the information available with us.16 th 2004-05 1.50 2002-03 3. (Rs in million) Particulars (i) Salary (ii)Allowances & Perquisites TOTAL th 2005-06 0.16 48.56 42.32 4.20 27. in case any liability arises under this guarantee.77 2.000 2.85 2005-06 (23. (Rs in million) Particulars (i) Salary (ii)Allowances & Perquisites TOTAL 2005-06 0.51 0. Estimated amounts of contracts remaining to be executed on capital account and not provided for : (Rs in million) 2005-06 0. The major components of deferred tax asset and liability arising on account of timing difference are as under: (Rs in million) Deferred Tax Asset/(Liability) Depreciation Expenses of Nature Allowable on payment basis Unabsorbed Depreciation/Carry Forward Losses under Tax Laws Others Total Deferred Tax Asset/ (Liability) * Shaded figure is in Rupee 7.18 0. 2005 which is subject to requisite approval from the Central Government.49 0.85 2002-03 0.39 1.55 2004-05 NIL NIL NIL 2003-04 NIL NIL NIL 2002-03 NIL NIL NIL 2001-02 NIL NIL NIL ** Appointment as Manager w. 2006.78 3.53 4.67 0.05 0.87 2003-04 0. 2003 and 2002 .55 5.83 *Ceased to be Whole Time Director w. Managerial Remuneration: In the absence of adequate profit.38 3.42) 1. (A) Remuneration as Whole Time Director*.34) 2.99 2001-02 (10.04 (9.97 3.07 2001-02 3. 2004.f.78 53. the erstwhile ultimate holding company under Haryana Value Added Tax Act.e. 6.27 30. Accordingly. its present ultimate holding Company.16 2004-05 39. 1956.23) 0. 29 September. 30 December.00 0. 5.89 4.57 2002-03 (17.12 2003-04 (22.16 1. no provisions has been made in respect of Interest under the “Interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act 1993”.

As the Company’s business activity falls within a single primary business segment viz.72 0.55 2002-03 0.72 0. Rent expenses included in profit and loss account towards such operating leases is as under :-.12 2004-05 3. 10. (A) (i) The Company has taken premises on operating leases that are renewable on a periodic basis and are cancelable by either party by giving a notice of one month. lease charges paid for a vehicle taken on operating lease which is renewable annually is as under :(Rs in million) 2005-06 0. (Rs in million) 2005-06 3.47 2003-04 1.04 2003-04 0.39 2002-03 1.77 2004-05 0.72 1.55 2001-02 0.32 contracts are as under: 2004-05 0.70 2003-04 0. Rent income included in profit and loss account towards such operating leases is as under :(Rs in million) 2005-06 1.38 2004-05 18.76 2002-03 NIL NIL NIL 2001-02 NIL NIL NIL 285 .12 0. its doctors and staff for any possible liability arising from such claims. ( B ) Other Claims : (Rs in million) 2005-06 3.05 2001-02 3. “Health Care Services”. the disclosure requirement of Accounting Standards (AS-17) “Segment Reporting”.05 2003-04 3.58 2004-05 1.72 2.72 2. issued by the Institute of Chartered Accountants of India is not applicable.25 2002-03 2.85 (ii) Similarly..24 (ii) Future minimum lease amounts under non-cancelable operating lease (Rs in million) Particulars Lease Income for the period from non-cancelable Operating lease Not later than one Year Later than one year but not later than five years 2005-06 0.04 2004-05 NIL 2003-04 NIL 2002-03 NIL 2001-02 NIL (B) (i) The Company has given premises on operating leases that are renewable on a periodic basis by either party by giving a notice of one to six months.8.55 9.32 2001-02 1.35 2001-02 NIL The Company has taken professional indemnity/error and omission policy to cover the hospital. Contingent Liabilities not provided for in respect of claims against the ( A ) Claims for medico-legal cases : Company not acknowledged as debts: (Rs in million) 2005-06 13.82 2003-04 2.01 2002-03 3.

Income in foreign currency: (Rs. in million) 2005-06 0. Borrowing Cost capitalized as per AS 16: (Rs. in million) 2005-06 NIL As per our report of even date attached 2004-05 0. Kapur & Co.Capital Goods Travelling Others Shaded figure is in Rupee 13.53 NIL 0. in million) 2005-06 NIL 14. Expenditure in foreign currency: (Rs.09 2001-02 NIL For N. in million) Items CIF Value of Imports.352 2004-05 NIL NIL 0.35 NIL 2004-05 NIL 2003-04 NIL 2002-03 0.D.23 2003-04 (0.28 NIL 0.23 NIL 4.03 12.01 2001-02 NIL 4.52 2003-04 3. Chartered Accountants Satish Kumar Gupta (Partner) Membership No: 82453 Place: New Delhi Date: September 28.02 2002-03 3.11. Prior period income/(expenditure) credited/(debited) to Profit & Loss account: (Rs.34) 2002-03 NIL 2001-02 NIL 2005-06 1. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 286 .24 2001-02 NIL 2004-05 NIL 2003-04 NIL 2002-03 5.

I) of the Company as at March 31. 2004. approved by the Board of Directors and annexed to this report: i. Gaur Marg. 1956 (the Act). There are no material amounts relating to the previous years which need to be adjusted in arriving at the profits/losses for the years to which they relate irrespective of the year in which the event triggering the profit or loss occurred. as stated in note 2 in Annexure III. The Company had no other class of shares during these years. Based on our examination of these Summary Statements. ii. Statement of Adjusted Cash Flows. 1992. We further report that as per the books and records produced to us. b. Dear Sirs. Paragraph B (1) of Part II of Schedule II to the Companies Act. 2006. 2003 and 2002. Capt. The changes in accounting policies which required adjustments to arrive at the Summary Statements have been carried out except for a change in recognizing unbilled revenue with effect from the financial year ended on March 31. enclosed as Annexure-IV.: 82488 Place: New Delhi Date: July 17. Financial information of the company 1. 2005. We have examined the attached Statement of Restated Assets and Liabilities (Annexure . and d. 2004. the “financial information of the Company” referred to above have been prepared in accordance with Part II of Schedule II of the Act and the SEBI Guidelines. There were no qualification in the auditors’ reports on the financial statements for the financial years ended on March 31. 2000 (‘the SEBI Guidelines’) issued by the Securities and Exchange Board of India (‘SEBI’) and amendments made thereto from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act. We have examined the following financial information relating to the Company. which has been prepared in accordance with the requirements of: i. The significant accounting policies followed by the Company and notes pertaining to the Summary Statements. 5. enclosed as Annexure-III. The restated profits have been arrived at after making such adjustments as in our opinion are appropriate and are more fully described in the notes to the Summary Statements in Annexure-III to this report. iii. PROFITS AND LOSSES FOR EACH OF THE YEARS ENDED MARCH 31. 2004. In our view. For R. 2003 and 2002 and the 'Statement of Restated Profit and Loss (Annexure-II) for the years ended on those dates (“Summary Statements”). 2004. 2. Srinivas Puri. annexed to this report. 2006 287 . 2005. 2006. 2005. 2004. no dividend has been paid by the Company in respect of each of the financial years ended on March 31. 6. 2004. 2005. New Delhi-110065. 2005. enclosed as Annexure-V. (4th Floor) 275-276. We have examined the financial information of Escorts Heart Centre Limited (“the Company”). 2006. 4. we confirm that : a. 2005. 2003 AND 2002 AND CASH FLOWS FOR EACH OF THE YEARS ENDED MARCH 31. due to a lack of necessary information for prior years. 2006. The Board of Directors Escorts Heart Centre Limited Piccadily House. 3. 2003 AND 2002 AS RESTATED UNDER INDIAN GAAP FOR ESCORTS HEART CENTRE LIMITED To. This report is intended solely for your information and for the purpose of inclusion in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose without our prior written consent. net assets value and return on net worth. Khattar & Associates Chartered Accountants Ranjit Khattar (Partner) Membership No. 2003 AND 2002. Summary of accounting ratios based on the adjusted profits relating to earnings per share. These Summary Statements have been extracted by the Company from the financial statements of the Company for the respective periods. There are no extraordinary items which are required to be disclosed separately in Summary Statements. 2004. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. 2006. duly approved by the Board of directors and audited by us.AUDITOR’S REPORT STANDALONE SUMMARY STATEMENTS OF ASSETS AND LIABILITIES AS OF MARCH 31. and ii. 2003 and 2002 on the equity shares. 2006. c.

51 41.89 5.19 1.20 33.05 2.77 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 288 .01 1. Khattar & Associates Chartered Accountants Ranjit Khattar (Partner) Membership No.54 13.67) 19.70 20.70 (0.92 18.00 15.88 2.27 (10.88 7.80 8.70 30.35 14.15 13.70 19.27 0.20 (14.31) 19.75 8.44 3.89 8.00 20.47 16.74 2. in millions) Particulars 2006 A Fixed assets: Gross block Less: Depreciation Net block Capital work-in-progress Total B Deferred tax assets(net) (Refer note 6 in Annexure III) C Current assets.81 5.76 (10.42 33.70 19.75 0.ESCORTS HEART CENTRE LIMITED ANNEXURE-I STATEMENT OF ADJUSTED ASSETS AND LIABILITIES (Rs.24 7.37 (14.28 8.57) 19.16 15.47 11.11 6.70 5.66 15.00 26.42 16.19 0.67) 0.06 3.77 6.59 0.80 8.22 3. loans and advances: Inventories Sundry debtors Cash and bank balances Loans and advances Total D Liabilities and provisions: Secured loans (including interest accrued and due) Unsecured loans Current liabilities and provisions Total E Net worth (A+B+C-D) F Represented by 1.18 0.33 2005 24.08 2. 2006 17.22 11.54 15.22 15.17 1.01 (0.34 1.31) 0.61 0. Reserves and surplus Total Less : Debit balance in profit and loss account Net worth For R.70 34.91 0. 2004 24.07 1.62 13. Share application money 3.74 0.24 2002 17.70 19.20 18.79 2.38 2.21 As at March 31.57) 1.26 12.01 8.: 82488 Place: New Delhi Date: July 17.77 13.03 2003 18.59 19.44 0.58 3. Share capital 2.70 19.69 11.28 0.70 13.52 5.

02 1.55 0.90 34.81 2.77 3.07 9.18 1.05 20.36) 0.66 10. 2005 2004 2003 2002 1.65 0.42 1.26) 3. Khattar & Associates Chartered Accountants Ranjit Khattar (Partner) Membership No. in millions) Particulars 2006 Income Operating income Income from : In-patients Out-patients Less : Subsidy Other income (refer note 3 in Annexure III) Total Expenditure Materials consumption Staff costs Professional fees Other operating expenses Administration and other expenses Interest/finance charges Depreciation Total Profit before tax Provision for taxation : Fringe benefits tax Deferred tax (charge)/benefit Net profit after tax For R.79 3.90 (7.60 20.82 23.77 0.ESCORTS HEART CENTRE LIMITED ANNEXURE-II STATEMENT OF ADJUSTED PROFITS AND LOSSES (Rs. 2006 Year ended March 31.87 1.51 0.40 2.96 24.94 1.49 1.12 (4.10) 18.77 0.04 0.22 0.18 7.04 1.41 9.01 1.14 (9.: 82488 Place: New Delhi Date: July 17.28 6.99 2.04 3.09) 3.36 2.90) 10.14 2.18 (10.37 12.02 2.79 (6.53 (14.10 1.02) 2.06 0.96 0.99 1.75) For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 289 .40 0.04 2.66 6.86 4.31 1.35 2.74 23.37 3.63 0.69) 3.00 1.01 12.57 0.53 5.05 9.53 3.60 (6.05 0.93 10.20) (0.62 0.89 33.44) 4.81 0.26) - 21.76 (10.64 0.23 13.34 (5.12 (11.09 8.70 20.85 0.19 2.07 23.04 0.09 2.50 0.

The related impact on account of the above change in the revenue recognition policy on the restated statement for the years ended March 31.III SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ADJUSTED ASSETS AND LIABILITIES AND STATEMENT OF ADJUSTED PROFITS AND LOSSES FOR THE YEAR(S) ENDED MARCH 31. All other borrowing costs are recognized as an expense in the year in which they are incurred. b) Borrowing costs Borrowing costs that are attributable to the acquisition and construction of fixed assets are capitalised as part of the cost of such asset up to the date the assets are put to use. The Statement of Adjusted Profits and Losses for the financial year(s) ended on March 31. no adjustments have been made for the same. g) Taxation The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act. as stated in note 1(f) due to lack of necessary information for prior years. medical consumables and drugs and pharmaceuticals are valued at the lower of cost and net realisable value.2 of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines. 2002 and 2003 can not been ascertained and consequently. Cost of acquisition is inclusive of freight. 2000 except for change in accounting policy in respect of revenue recognition from the year ended March 31. 2004.e. 2005. These statements have been prepared by extracting from the audited profit and loss account and balance sheet for the aforesaid years after making therein the disclosures and adjustments required to be made in accordance with the provisions of paragraph 6. 2005. 2004. 2004. Depreciation on additions/deletions is charged for the full month irrespective of the date of acquisition /deletion. 1956. 2005. Weighted average method is used in determining the cost of inventories. 2006. NOTES 2.ESCORTS HEART CENTRE LIMITED ANNEXURE. Significant accounting policies a) Fixed assets Fixed assets are stated at cost less accumulated depreciation. duties. 2006. f) Retirement benefits Provisions for gratuity and leave encashment benefits are determined on an actuarial valuation at the year end. Deferred tax is recognised. (Also refer to note 2 below). d) Inventories Stores and spares. e) Revenue recognition Revenue is recognized on an accrual basis and includes value of services rendered pending billing in respect of in-patients undergoing treatment as at the end of the financial period except in respect of the years ended March 31. 2004. c) Depreciation Depreciation on fixed assets is provided on the written down value method on a pro-rata basis at the rates specified in schedule XIV to the Companies Act. taxes and other incidental expenses relating to acquisition and installation of assets. 1961. 2002 and 2003. 2003 and 2002 reflect the profits and losses and assets and liabilities for each of the relevant period / years indicated above. The Company’s contributions to the provident and other funds are charged against revenue every year. In which revenue from patients was recognized on discharge of the patients i. subject to the consideration of prudence. 2003 and 2002 1. 2003 and 2002 and the Statement of Adjusted Assets and Liabilities as at March 31.10. 2006. 290 . bill raised. being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years. on timing differences.

the holding company Total 18. 8.80 2006 Year ended March 31.32 In view of substantial reduction in the number of patients visiting the hospital resulting in low revenue and mounting losses.05 0. credit given by suppliers on full and final settlements and accordingly non-recurring in nature and has arisen out of other than normal business activities. 2003 and 2002 is as under: (Rs.65 1. After the closure of Kanpur operations the Company is moving into the business of managing the operations of Cardiac Care Units located at various hospitals across the country.00 12.33 16.39 Net deferred tax assets / (liability) 17. The Company has not declared any dividend during the financial years ended March 31. 9.19 Sub-total 17. with the view to provide exclusive focus and direction to the said units for achieving higher efficiency.01 5. 2006 2005 2004 2003 2002 Deferred tax assets on: Unabsorbed depreciation 5. in millions) Year ended March 31.11 0.00 8.02 0.07 0. the Company has closed the hospital operations in Kanpur from 31st August 2005.63 0. 5.17 1.91 5.21 11.13 11. 2006: 291 . 2005.03 7. 7.01 gratuity disallowed Short term capital loss 0.34 Annual analysis of Unsecured loans (Rs. 2004.87 3. 2005 2004 2003 2002 6.14 7. in millions) Name of the Institution / Bank Long-term From others : Escorts Heart Institute and Research Centre Limited. Based on this new business plan Company would generate enough revenue to cover up all its brought forward business losses and unabsorbed depreciation. 2003 and 2002.01 0.73 Deferred tax liabilities on: Depreciation 1. 4. in millions) Particulars Year ended March 31. Looking into future income expected out of new business plan. 2004.17 2.11 0. Estimated amount of contracts remaining to be executed on capital account in the reported five years: (Rs. The analysis of the other income arrived as per the Statement of adjusted profit and losses in the period / years ended March 31.16 2.17 1.07 0.01 4. 2006.39 Sub-total 1.63 0.01 0. Particulars 2006 2005 2004 2003 2002 Capital commitments 0.01 0.00 8.12 Preoperative and Miscellaneous 0.01 2002 0.76 0.77 Year ended March 31.00 2. 2005 2004 2003 0.00 12. the Company has created deferred tax asset for brought forward losses and unabsorbed depreciation.24 3.80 2. Deferred tax assets / (liability) have been computed for the reported years as under: (Rs.03 0.03 expenses to the extent carried forward Provisions for leave encashment and 0.38 12.3.33 15.05 0.37 Carry forward business loss 12. 2005.00 18. in millions) Particulars Interest income Profit on sale of assets Miscellaneous balance written off Others Total 2006 0.01 The above other income is on account of sale of wastage. 2006.89 0. Analysis of Unsecured loans taken by the Company as at March 31.30 7.

considered good) (Rs. 15.03.66 0.72 0. Holding company : Escorts Heart Institute and Research Centre Limited 292 .00% Repayment Schedule Long term loan - 3.01 0.01 0.02 0. in millions) Name of the Institution / Bank Escorts Heart Institute and Research Centre Limited.06 0.07 2002 - 13.05 0. As the Company’s business activity falls within a single primary business segment viz.considered good) (Rs. are not applicable.69 0.04 0. in millions) Particulars Debts over six months Other debts Less: Advance against unbilled revenue per contra (refer to note 1-f ) Net debtors balance 2006 Year ended March 31.28 5.81 2003 0.13 0.08 0.01 0.02 0.06 0.28 7.01 Year ended March 31. in millions) Name of the Institution / Bank Long-term From Banks : Central Bank of India Total Year ended March 31.62 0.07 0. in millions) Name of the Institution / Bank No secured loan as at 31. 2006 18. Annual analysis of Secured loans (Rs.01 0. Analysis of Loans and advances (Unsecured .58 8.69 0. 2006 2005 2004 2003 2002 Loans outstanding as at March 31.79 2002 0. 2005 2004 2003 0.02 0.10 0. issued by the Institute of Chartered Accountants of India. 2006 Rate of Interest (per annum) Repayment Schedule Nature of security 12. “Healthcare Services” the disclosure requirement of Accounting Standard (AS-17) “Segment Reporting”. Related party disclosures under Accounting Standard 18 I ) Name of related party and nature of related party relationship A.18 0. in millions) Particulars Prepaid expenses Security deposit Advances to suppliers Other loans and advances 2006 0.05 7. 2006: (Rs.26 3. the holding company Total 10.58 11.2006 Total Loan outstanding as at March 31.05 8.74 2004 0.00 Rate of Interest (per annum) 9.11 0.00 18.05 1.(Rs.38 Total 14. 2005 0. Analysis of Sundry debtors (Unsecured .13 0. Analysis of Secured loans taken by the Company as at March 31.06 0.26 5.

Others Interest on unsecured loan Finance i.34 3. Loan funds Balance i.25 10.00 2004 0.89 0. assign or part with the possession of the premises. 2005 6.15 1. Ultimate holding company : Escorts Limited ( until September 28.f September 29.15 1. Later than five years 2.54 c) Lease rent charged to the profit and loss account in the reported years: (Rs.20 12.42 0.80 5.99 18. Unsecured loan 2006 0. Disclosure in respect of Operating leases (entered on or after April 1.10 1. the lease may be renewed for a further period of ten years after the expiry of term the rent shall be increased by 5% every years.41 0. in millions) Year ended March 31.21 1.43 12.81 0.21 0. Khattar & Associates Chartered Accountants Ranjit Khattar (Partner) Membership No. Management contracts/deputation ii. in millions) Particulars Lease Rent For R.10. 2005) II ) Nature of transactions with holding company. 2005) ( Holding company of Escorts Heart Institute and Research Centre Limited) Fortis Healthcare Holding Limited through Fortis Healthcare Limited (w.94 2.10 1. Some of the significant terms and conditions of the arrangement are: the lease term shall be for a period of ten years commencing from 01. (Rs. the Company cannot sublet.63 0. in millions) Particulars Purchase of goods Transfer of goods Purchase of fixed assets Sale of fixed assets Receiving of services i.80 2002 1.73 than five years iii.00 14.81 4.02 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 293 .00 Year ended March 31.81 5. by giving three months notice in writing to the lessor.50 - : 16. b) The total of future minimum lease payments under non-cancelable operating lease for each of the following period following Lease rent charged to the profit and loss account in the reported five years: (Rs.48 5.02 5.e.21 6.20 2. The Lease has been terminated from 31st August 2005 due to closure of operations at Kanpur.2001 for lease of the Hospital Premises. 2005 2004 2003 1.2001. 2001) under Accounting Standard .01 6. 2006 2006 0.22 4.(refer to note 6 above).97 4.05 2002 1.12. Particulars 2006 2005 2004 2003 2002 i.51 5. Equity ii.49 0.00 2003 4.38 5.19 “Leases” issued by the Institute of Chartered Accountants of India: a) General description of the Company’s operating lease arrangements: The Company entered into operating lease on 21.: 82488 Place: New Delhi Date: July 17.49 Year ended March 31.87 8.B. Later than one year and not later 5. Amount payable ii. Not later than one year 1. The lessee may terminate this lease.00 20.05 ii.01 5.12 0.00 12.

19 (0. in millions) Particulars 2006 A CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax and extraordinary items.24) 5.52 (0.19 For R.56 0. Khattar & Associates Chartered Accountants Ranjit Khattar (Partner) Membership No.75 0.59 2.18 2.09) 2.89 0.28 3.44 (4.09 0.80 (1.40 (10.36 5.05) 0.01 1.13) 5.05 2.01) (0.92) 9.50) (0.31) 2.30) 0.26) 2.82) 1.02) 0.96 9. Adjustment for : Depreciation Profit on sale of fixed assets Loss on sale of fixed assets Miscellaneous expenditure written off Interest expenses Operating (loss) /profit before working capital changes Adjustment for working capital changes Trade & other receivables Inventories Trade and other payable Cash generated from operations Tax paid Net cash from / (used) in operating activities B CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets/ CWIP Sale of fixed assets Net cash from / (used) in investing activities C CASH FLOW FROM FINANCING ACTIVITIES Received from shareholders Term loan taken Unsecured loan taken Loan repaid Interest paid Net cash from / (used) in financing activities Net increase / (decrease in cash and cash equivalents (A+B+C) Cash and cash equivalents as at the beginning of the year Cash and cash equivalents as at the end of the year (6.04 (5.20 (1.18 0.36 1.98 (2.96) (0.90 0.06) Year ended March 31.02) (11.98 4.44 (0.99) (2.07) 0.09 1.22 (3.90) 2.28) (1.91 0.61 (0.09 (7.30) (11.18 (2.54) (0.00 (1.97) (13.38) 9.49) (1.99) 5.13 1.71 (1.43) 2.32) 2003 (11.13) (0.19 1.69) 2.53) 10.71) (0.00 (3.91 (11.44) 2. 2005 (14.01 0.10 (4.34) 0.15) 2004 (10.75 0.12 4.74) 16.61 1.11 0.ESCORTS HEART CENTRE LIMITED ANNEXURE-IV STATEMENT OF ADJUSTED CASH FLOW (Rs.58 0.30) 5.96 1.91 0.21) 2002 (9.28) (2.40) (0.12 (4.28 (0.56) (0.04 4.35 (6.14) 3.92) (13.47 1.40) (4.70 8.20) 1.66 0. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 294 .: 82488 Place: New Delhi Date: July 17.22) (0.58 6.90 (0.97) (2.

52)% Net asset value = {Net worth as per Statement of Adjusted Assets and Liabilities} / {Weighted average number of shares} = {Adjusted Profit / (loss) after tax as per Statement of Adjusted Profits and Losses} / {Net worth as per Statement of Adjusted Assets and Liabilities} Return on net worth ** Not calculated due to Negative Net Worth as on date.V SUMMARY OF ACCOUNTING RATIOS Particulars Nominal value of shares Earnings per share Net asset value per share Return on net worth Notes: Definition of ratios Earning per share = {Adjusted Profit/(loss) after tax as per Statement of Adjusted Profits and Losses} / {Weighted average number of shares} Unit Rupees Rupees Rupees Percentage Year Ended March 31. ** 2002 10 (4.45) N.50) (3. 2006 For and On behalf of the Board of Directors Anil Panwar Sandeep Kapoor 295 .35 N. 2005 2004 2003 10 10 10 (5.ESCORTS HEART CENTRE LIMITED ANNEXURE .74) (5.21) (3.16) 3.37) (0. For R.63)% 2006 10 (2.A.A. Khattar & Associates Chartered Accountants Ranjit Khattar (Partner) Membership No. ** N.A.08) (7.: 82488 Place: New Delhi Date: July 17.36) 6.66 (65. ** (111.

These Restated IHL Financials are the responsibility of IHL’s management. 2004. 2004. March 31. 2006. 2005 and March 31. March 31. OF INTERNATIONAL HOSPITAL LIMITED. We did not audit the financial statements of the Company for the year ended March 31. together with Accounting policies and notes thereon (Annexure IV). 2003. 2006. March 31. 2002. These Restated IHL Financials. we confirm that: • the impact of changes in accounting policies adopted by IHL for the year ended March 31. 3. the Restated IHL Financials mentioned above has been prepared in accordance with Part II of Schedule II of the Companies Act and the Securities and Exchange Board Of India (Disclosure and Investor Protection) Guidelines. 2002. 2005 and March 31. Based on our examination of these Restated IHL Financials in respect of the year ended March 31. 2002. March 31. March 31. 2005 and March 31. March 31. 2005 and March 31. March 31. 2003. including the adjustments and regrouping which one are more fully described in the note on adjustments appearing in Annexure IV to this report have been extracted from the audited financial statements of IHL as of and for the years ended March 31. This report is intended solely for your information and for the purpose of inclusion of the Restated IHL Financials in the Consolidated Restated Financial Statements of Fortis Healthcare Limited. 2006. For Walker. March 31.AUDITORS' REPORT SUMMARY STATEMENTS OF STANDALONE ASSETS AND LIABILITIES AS AT AND STANDALONE PROFITS AND LOSSES FOR THE YEARS ENDED MARCH 31. 2006. • there are no material amounts relating to adjustments for previous periods which have been identified during the audit for the years ended March 31. 2003. • there are no adjustments/rectifications for incorrect accounting practices/policies or failures to make provisions or other adjustments which resulted in audit qualifications for the years ended March 31. AS RESTATED. which have not been disclosed separately. March 31. referred to as the “Restated IHL Financials”. 2004. 2004. 81203 New Delhi September 25. At your request. 2003. 2002. 2005 and March 31. 2002. 2006 296 . 2005 and March 31. 2004. 2006. In our opinion. 2002. 2004. 2006 has been adjusted with retrospective effect in the attached Restated IHL Financials. 2. 4. 2006. 2002. March 31. 2003. 2002 which were audited by other auditors whose report has been furnished to us. To The Board of Directors International Hospital Limited Piccadily House 275/276 (4th floor) Captain Gaur Marg Sri Niwas Puri New Delhi 110065 1. March 31. This report should not be in any way construed as a re-issuance and for inclusion or re-dating of any of the previous audit reports issued by us or by any other firm of Chartered Accountants nor should it be construed as a new opinion on any of the financial statements referred to herein. 2005. March 31. March 31. 2005 AND 2006 AND STANDALONE CASH FLOWS FOR THE YEARS ENDED MARCH 31. March 31. March 31. 2003 AND 2002. • there are no extraordinary items that have been identified during the audit for the years ended March 31. 2004. Chandiok & Co Chartered Accountants Rajesh Jain Partner Membership No. which have not been given effect to in the Restated IHL Financials. March 31. 2006 (Annexure I) and the related attached restated summary statement of profit and loss (Annexure II) and restated summary statement of cash flows (Annexure III) of International Hospital Limited (“IHL”) for each of the year ended on those dates. which will form part of the financial information reproduced in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose is that our prior written comment. 2003. 2003. 2000 issued by the Securities and Exchange Board Of India and amendments made thereto from time to time. March 31. we have examined the attached restated summary statement of assets and liabilities as at March 31. March 31. which have not been given effect to in the Restated IHL Financials. 2004.

01 254.Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances Total Liabilities and Provisions Secured Loans Unsecured Loans Current Liabilities Provisions Deferred Payments Deferred Tax Liability/ (assets) Total Net Worth Equity Share Capital Redeemable Preference shares Share Application Money(Pending Allotment) Reserves & Surplus Profit & Loss Account Less: Preliminary Expenditure (To the extent not written off or adjusted) (1.87 (0.23 5. Chandiok & Co.51 (155.67 380.26 0.86 142.76 (0.65 53.14 213.63 142.91 (88.01) 6.14 - 2.49 14.58 93.50 0.38 63.77 8.45 80. AS RESTATED Particulars FIXED ASSETS Gross Block Less Depreciation Net Block Capital Work in Progress Including Capital Advances TOTAL Preoperative Expenditure (Pending Allocation) Investments Current Assets.10 (0.20) 32.36 57.73 (0. 2002 22.08 (0.85 Note .07 (0. 81203 Place: New Delhi Date: September 25.IV to the report For International Hospital Limited For Walker.82 37.70 650.01) 258. as appearing in Annexure.74 7. 2006 As at March 31.28) 14.69 1.15 22. 2006 Director 297 .03 38.85 0.81) - 0.59 181.38 3.70 708.78 675.20) 1.61 625.82 2.12 44.00 33.99 0. Chartered Accountants Director Per Rajesh Jain Partner Membership No.52) 552.30 246.01) 94.58) 435.38 24.79 13.91 (4.33 38.50 1.93 213.02 24.68 634.63 301.72 16.89 0.06 32.26 79.91 6.69 As at March 31.00 9.79 230.77 772. 2004 24.68 As at March 31.The above financial statements should be read with Notes on Adjustments and Significant Accounting Policies.00 77.45 As at March 31.93 402.18) - 1.68 708.81 0.80 0. 2005 Annexure I ( Rs.80 90. in million) As at March 31.74 30.48 8.88 51.58 462. 2003 24.17 799.99 42.61 (1.73 146.94 13.12 0.01 24.91) - Net Worth 246.INTERNATIONAL HOSPITAL LIMITED STATEMENT OF ASSETS AND LIABILITIES.07 1.45 401.

AS RESTATED Annexure II ( Rs.22 40.91) (116. 2002 - PARTICULARS INCOME Operating Income Other Income Total Income EXPENDITURE Materials Consumed Personnel Expenses Operating Expenses Selling and Distribution Expenses General and Administrative Expenses Interest Miscellaneous Expenditure written off Preliminary Expenses written off Depreciation/ Amortization Total Expenditure LOSS BEFORE TAX Fringe Benefit Tax Deffered Tax Expensesfor the Current Year NET LOSS BEFORE PRIOR PERIOD & EXTRAORDINARY ITEM Extraordinary item (gain) NETLOSS BEFORE PRIOR PERIOD ITEMS Prior Period Items .91 15.The above financial statements should be read with Notes on Adjustments and Significant Accounting Policies.20 13.37) (2.84) 26. 2004 For the year ended March 31.81 (84. in million) For the year ended March 31.91) (116.22) 26.21 18. 81203 Place: New Delhi Date: September 25.18) (1.04) (65.90) 0.37) (1.73 171.28) For the year ended March 31.90) (0.05 53.04) 0.72 15. 2005 133.62) (67.52 504.Deferred tax adjustment NET LOSS BEFORE ADJUSTMENTS Sum of all adjustments other than tax adjustments Current Tax Impact of Adjustments Deferred Tax Impact of Adjustments Total adjustments NET LOSS AS RESTATED Profit & Loss Account at the beginning of the year Loss Brought forward from Amlgamating Company For the year ended March 31.33 149.04) (0.90) (0.91) - (0. Chartered Accountants Director Per Rajesh Jain Partner Membership No.04) (0.IV to the report For International Hospital Limited For Walker.13) (25.89 (90.81) (0.28 0.33 25.91) 7.99 182. as appearing in Annexure.37) 0.48 39.00 (2.18) - - - - (2. 2006 Director 298 .10) (4.56 69.91) Note .00 (0. 2003 For the year ended March 31. of Annexure) BALANCE CARRIED FORWARD AS RESTATED (155.12 569.96 78.87) (refer Note No.81) - (0.91 10.53 (1.48 32.49) (28.30) (88.61 239.46 (64.22) (65. Chandiok & Co.82 14.INTERNATIONAL HOSPITAL LIMITED STATEMENT OF PROFITS AND LOSSES.58) (88.00 (0.73) 1.54 (38.87 41.07 (116. 2006 486.68) (3.55 20.28) (4.82 31.05 24.

90) (0.37) (43.00) 36.92 (47.18) (5.27) 2.54) (0.42) (8. 2004 (2.65) (36.03 5.69) For the year ended March 31.95 6. Cash Flow from Operating Activities Net Profit/(Loss) before Tax.45 (0.18 1. Chandiok & Co.IV to the report For International Hospital Limited For Walker.50 1.38 155.37) (36.61 0.67) (46.99 19.INTERNATIONAL HOSPITAL LIMITED STATEMENT OF CASH FLOWS. AS RESTATED Annexure III ( Rs.38 0.31 1.32) (8.37) (2.60 52.37) (33.The above financial statements should be read with Notes on Adjustments and Significant Accounting Policies.13 0.69 0. 81203 Place: New Delhi Date: September 25.32 Note .57) For the year ended March 31. in million) Particulars A.81 (3.91) 333. 2002 (0.88 1.00 35. 2006 (67.83 145.99) 274.50 0. 2005 (83.86) 39.32) 100.12 0.44 1.87 0.30 181.24 (18.26) 90.15 1.95 (8. 2006 299 .96 6.04) (0.97) (113. Cash Flow from Investing Activities Purchase of fixed assets & changes in CWIP Change in Preoperative expenditure(pending allocation) Proceeds from sale of Fixed Assets Interest received Sale of Investment Net Cash used in Investing activities(B) C.50 1.65 1.10) (5. 2003 (0.26 0.15) 51.09 2.50 1.26 1.82 0.84 1.08 0.94) 3.72) 42.65 (32.68) 0.19) For the year ended March 31.50 (20.00) 20.64) 3.10) (3.41 (0.14) 40.48 17. as restated Adjustment for: Depreciation & Amortisation Loss on sale of fixed assets Provision for Doubtful Debt Bad Debts/Sundry Balances written off Interest income Interest expense Operating profit/(Loss) before working capital changes Movement in working capital: Decrease / (Increase) in sundry debtors Decrease / (Increase) in inventories Decrease / (Increase) loans and advances Decrease / (Increase) on other Current Assets Increase / (Decrease) in current liabilities Cash generated from operations Tax paid Net Cash genrated from/(used in) operations(A) B.79) (38.13 0. Cash Flows from Financing Activities Proceeds from issuance of share capital & Share Application Money Proceeds from long-term borrowings Proceeds from Short-term borrowings Car Loan received Car Loan repaid Interest paid Net Cash(used in)/genrated from financing activities (C) Net changes in cash & cash equilent(A+B+C) Cash and cash equivalents at the beginning of the year Add: Cash acquired on amalgamation Cash and cash equivalents at the end of the year Components of cash and cash equivalents: Cash on Hand Balances with Scheduled Banks on Current Accounts For the year ended March 31.59 (7.22 (113.54 (1.77 (10.66) 152.02 0.46) For the year ended March 31.50 1.27 (0.90) (9.04) 1.87) 0.58 (0.54) (44.91 (37.47) (216.59 25.00 (313.95 0.24 0.24) (404. Chartered Accountants Director Director Per Rajesh Jain Partner Membership No. as appearing in Annexure.00 (51.50 2.51) 24.82 3.02) (262.14) (21.03 37.65 2.03 25.55 0.39) (17.47) (10.00 198.

000 are fully depreciated in the year of purchase. 1956. The Company’s contributions to provident fund is charged to the profit and loss account on accrual basis. Deferred tax assets on timing differences are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Assets individually costing less than Rs 5. Monetary items denominated in foreign currency as at the balance sheet date are converted at the exchange rate prevailing on that date. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. (i) Operating Income Operating Income is recognized as and when the services are rendered/ pharmacy items are sold. Cost is determined on a first-in-first-out basis. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets/liabilities will be realized/disbursed against future taxable income. which are adjusted to the cost of the relevant asset. deferred taxes and fringe benefit tax. 2005. pharmacy items and fuel. The liability for employees’ leave encashment and gratuity is provided for in accordance with the rules of the Company and is based on actuarial valuations made by an independent actuary at the balance sheet date. The financial statements have been prepared under the historical cost convention on an accrual basis. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Inventories Inventories comprise of medical consumables. The exchange differences resulting on such translation and on settlement of transactions are charged to profit and loss account. leave encashment and contributions to provident/ pension funds under the approved schemes of the Company. and are valued at the lower of cost and net realizable value. Consequent to introduction of Fringe Benefit Tax (FBT) effective April 1. the Company has made provision for FBT in accordance with applicable Income-tax laws. Income taxes Tax expense comprises current tax. 1956. Retirement benefits Retirement benefits to employees comprise gratuity benefits. Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Statement of significant accounting policies (a) Basis of preparation The Restated financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act. Depreciation Depreciation is provided on Straight Line Method at the rates mentioned below which are as per the rates prescribed in Schedule XIV to the Companies Act. Premium paid on perpetual leasehold land is charged to revenue on termination/ renewal of lease agreements. (ii) Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. except for exchange differences arising on translation of liability in foreign currency relating to acquisition of fixed assets. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Expenditure on new project and substantial expansion (b) (c) (d) (e) (f) (g) (h) (i) 300 . Fixed assets Fixed assets are stated at cost less accumulated depreciation. Foreign currency transactions Transactions in foreign currency are recorded in the reporting currency by applying to the foreign currency amount the exchange rate prevailing on the date of the transaction.International Hospital Limited Annexure IV – Significant accounting policies and notes to the accounts I. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use.

general & administrative expenses Provision for doubtful debts (0.91 Total (A-B) (28. Given below is the summary of results of restatement made in the audited accounts for the respective years and its impact on the profits / losses of the Company.003) (0.2003 31.37 written off III) Operating expenses Consultancy fee to Doctors.94 II) Other Income Miscellaneous expenditure 2.54 VII) Deferred Tax Expenses(Income) Deferred tax assets created in (1.2005 31.05) off VI) Prior Period Items Deferred tax adjustment 26.81 (2. Indirect expenditure incurred during construction period is capitalised as part of the indirect construction cost to the extent to which the expenditure is related to construction or is incidental thereto.02 Bad debts written off (0.003) March 2005 VIII) Impact on the opening 0.2004 31.83 B) EXPENDITURE I) Personnel expenses Miscellaneous expenditure 2.02) 0.05) (25.68 (25.04 written off IV) Miscellaneous expenditure written off Miscellaneous expenditure (10.91) 301 . Other indirect expenditure (including borrowing costs) incurred during the construction period. Contingent liabilities Depending on the facts of each case and after due evaluation of relevant legal aspects.55 Miscellaneous expenditure 6.003) (0.89 written off Total(A) (3. which are neither related to the construction nor are incidental thereto are charged to the profit and loss account.(j) Expenditure directly relating to new project and substantial expansion is capitalised.62) 32.00 0. for un-discharged patients (0.30 2.94) 6.28) written off V) Preliminary expenses written (0.72 0. (Rs.53 0. in million) For the year ended March March March March March 31. the Company makes a provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the amount of obligations that may but probably will not require outflow of resources as contingent liability in the financial statement.24) 0.37 0.2002 Adjustments for A) INCOME I) Operating income Unbilled revenues (3.55) 0.98) 2.89) (0.37) (0.48) (0.2006 31.24 III) Selling.87 reserves Total(B) 24.89 0.94) 3.37 0. Notes to the accounts Material Adjustment: II 1.

2005. the effect of these write offs has been considered in the respective years in which these receivables were originally recorded with a corresponding reduction in the expenses for the year ended March 31. the ‘Statement of Profits and Losses.e. a. These expenses have been reclassified under “Selling expenses” for all the periods presented in the ‘Statement of Profits and Losses. Miscellaneous expenditure written off Revenue expenditure incurred by the Company prior to the commencement of business operations was being accumulated and carried in the Balance Sheet of each year-end and the entire amount was charged to revenue in the year the Company commenced business operations i. 2006 in the ‘Statement of Profits and Losses. c. as Restated’. Housekeeping consumables charges incurred by the Company were included under “Operating d. 2. as Restated’. Accordingly the effect of these expenses has been debited in the period in which these services were obtained with a corresponding reduction in the expense for the year ended March 31. 2005. Provision for doubtful debts The Company has made provisions for doubtful debts in respect of revenues recognized in previous periods. The Company recorded a prior period item being errors and/or omissions in respect of certain periods from April 1. Accordingly. with a corresponding reduction in the expenses for the year ended March 31. as Restated’. b. 2. year ended March 31. 2001 to March 31. Deferred tax adjustment 1. 2005. 2006 included certain expenses relating to consultancy fees to doctors pursuant to services provided to patients admitted on or before March 31. Unbilled revenues Operating income for the year ended March 31. 302 . 2005. 2005 in the ‘Statement of Profits and Losses. the said expenditure has been charged in the ‘Statement of Profits and Losses. Bad debts written off The Company has written off receivables in respect of revenues recognized in previous periods. 2001 has been adjusted to reflect the impact of expenses incurred prior to March 31. 2006 in the ‘Statement of Profits and Losses. Also. Further the accumulated profit and loss balance as at April 1. f. as Restated’. 2005 included advertisement and publicity expenses incurred by the Company. Accordingly. For the purpose of this statement. Accordingly the effect of these revenues has been credited in the period in which these services were provided with a corresponding reduction in the income for the year ended March.e. 2005. 2006 and March 31. as Restated’. e. Accordingly the effect of these prior period amounts have been adjusted in the period of origination by a corresponding charge to the ‘Statement of Profits and Losses. 2001. as Restated’. as Restated’ has been adjusted for respective years in respect of short/excess provision for income tax as compared to the tax payable as per the income tax returns filed by the Company for these years. 2001 with a corresponding reduction in the expenses of the year ended March 31. as Restated’.a. year ended March 31. the said expenditure has been charged to accumulated profit and loss balance as at March 31. 2006 in the ‘Statement of Profits and Losses. Consultancy fee to Doctors Personnel expenses for the year ended March 31. Preliminary expenses written off Revenue expenditure incurred by the Company prior to incorporation was accumulated and carried in the Balance Sheet of each year-end and the entire amount was charged to revenue in the year the Company commenced business operations i. b. as Restated’ of respective year with a corresponding adjustment in the yearended March 31. 2006. the effect of these provisions has been considered in the respective years in which the revenues were originally recorded with a corresponding reduction in the expenses in the ‘Statement of Profits and Losses. as Restated’. 2006 included certain revenues relating to services provided by the Company to patients on or before March 31. For the purpose of this statement. 2006 in the ‘Statement of Profits and Losses. Material Regroupings: The “General and administration expenses” in the profit and loss account for the year ended March 31. g.

2006 and March 31. (Rs. as Restated’. 303 . 2006 . Term loan from UTI bank is secured against first exclusive hypothecation / mortgage charge on the existing and future movable and immovable assets of the Company. on such payments being made by the holding company.58 18. March 31. as Restated’. Finance charges have been reclassified under “General and administration expenses” and Interest has been disclosed separately for all the periods presented in the ‘Statement of Profits and Losses. f. These expenses have been reclassified under “Personnel expenses” for all the periods presented in the ‘Statement of Profits and Losses.29 19. gratuity and other statutory dues in respect of the employees deputed / shared by the holding company would be reimbursed and charged by the Company. These expenses have been reclassified under “Operating expenses” for all the periods presented in the ‘Statement of Profits and Losses.41 March 31.2002 25. 2006. Further. Repair and maintenance of Building expenses incurred by the Company were included under “General and administration expenses” in the profit and loss account for the year ended March 31.2003 15. as Restated’. Recruitment and training expenses charges incurred by the Company were included under “General and administration expenses” in the profit and loss account for the year ended March 31. These expenses have been reclassified under “Operating expenses” for all the periods presented in the ‘Statement of Profits and Losses. Particulars Transfer to Fixed Assets Allocated under various head of Profit & Loss Account Allocated under various head to Pre operative exp. in terms of an agreement with the holding company. as Restated’. In the opinion of the board of directors current assets.02 d. 2005. Repair and maintenance of plant and machinery expenses incurred by the Company were included under “General and administration expenses” in the profit and loss account for the year ended March 31. e. in million) For the year ended March March March 31. Interest and other finance charges incurred by the Company were included under “General and administration expenses” in the profit and loss account for the year ended March 31. loans and advances have a value on realization in the ordinary course of business at least equal to the amounts at which they are stated and provision for all known liabilities have been made in the accounts. as Restated’.2005 31. g. the Company has borne expenses allocated/ apportioned by Fortis Healthcare Limited. In accordance with the resolution passed by the Board of Directors of the Company.99 32. 2005. 2006 and March 31. as Restated’. leave encashment. These expenses have been reclassified under “Material Consumed” for all the periods presented in the ‘Statement of Profits and Losses. 2005.expenses” in the profit and loss account for the year ended March 31.2006 3. 3.2004 31. Consultancy fee to Doctor paid by the Company were included under “General and administration expenses” in the profit and loss account of the year ended March 31. 2005. c. 5. These expenses have been reclassified under “Operating expenses” for all the periods presented in the ‘Statement of Profits and Losses. Loan for vehicles is secured against hypothecation of respective vehicles. 2006 and March 31.63 Nil 4.

Shivinder Mohan Singh Entity/ Person Fortis Healthcare Holding Limited(FHHL) Fortis Healthcare Limited(FHL) b.2003 382. 8. 304 .2006 March 31.Escorts Heart Centre Ltd. acquired by FHL w.f.2005 31.f. acquired by FHL w. Since no further demand has been raised against the Company it is not possible to quantify the liability which may arise upon reassessment. Segmental Disclosure The Company is engaged in the business of Speciality Hospitals which as per Accounting standard 17 on “Segment Reporting”.2002 Nil (I) Capital commitments 3. September 29. Harpal Singh Mr. is considered to be the only reportable business segment.e. 2006 set aside these provisional assessment orders and the assessing officer has been directed to pass a final assessment order after examining the relevant accounts or records maintained by the Company and also the law laid down by the Supreme Court of India in “Bharat Sanchar Nigam Limited Vs.32 Industrial Development Authority Suit for medical negligence 1. Union of India & Others”. The Company by way of a “Civil Miscellaneous Writ Petition” has challenged the provisional assessment orders before the Honorable High Court of Allhabad.53 Particulars March 31.97 2.e.f. 2005 Escorts Heart and Super Speciality Institute Ltd. Key Management Personnel Mr. 7. The Company is operating only in India and there is no other significant geographical segment. September 29.82 Nil 8. September 29. Capital commitments and contingent liabilities (Rs. in million) For the year ended March March March 31. 2005 Escorts Hospital and Research Centre Ltd.32 Nil Nil Nil Nil Nil Sales tax The Sales Tax Department vides their order dated March 14. acquired by FHL w. The High Court vide its order dated May 17..e.2004 31. 2005 c.f. 2006 made a provision assessment and raised a demand on the Company.62 85. I Related party disclosures Related party relationship Relationship a.91 Estimated amount of Contracts remaining to be executed on capital account and not provided for (Net of Capital advances) (II) Contingent liabilities (not provided for) in respect of: Demand raised by New Okhla Nil 8.6. September 29. Holding Companies Ultimate Holding Company Holding Company Other entities controlled by the Holding Companies Oscar Bio-Tech Private Limited Escorts Heart Institute and Research Centre Limited (EHIRCL) acquired by FHL w. 2005 Escorts Heart and Super Speciality Hospital Ltd.e.

2005 Holding Companies: Allocation of corporate expenses Reimbursement of expenses incurred on behalf of Company Interest paid/ (received) Balance payable / (receivable) Entities over which significant influence is exercised Utilization charges paid/(received) Reimbursement of expense paid/(received) Upfront fee paid/(received) Pathology/Investigation charges paid Balance payable / (receivable) 36.39) (0.14) 32. March 31.Since AS – 18 on Related Party Transactions as issued by the Institute of Chartered Accountants of India.69 0. Enterprises owned or significantly influenced by key management personnel or their relatives SRL Ranbaxy Limited Ranbaxy Laboratories Limited Ranbaxy Holdings Limited II.d. 2004.35) (6.93) (10. hence information for the years ended March 31.52 (16. Transactions with related parties .50) 6. 2002 has not been presented under.35 13. in million) For the year ended March 31.301 12.40 (0. 2003 and March 31.21 (0.00) 16.13 33.61 2. (Rs.54 (4.2006 March 31.99) 305 .40 7. became first applicable to the Company with effect from the accounting year starting April 1. 2004.

note 3). which has been prepared in accordance with the requirements of: (i) Paragraph B (1) of Part II of Schedule II to the Companies Act . 4. 275-276.2000 (‘the SEBI Guidelines’) issued by the Securities and Exchange Board Of India (‘SEBI’) and amendments made thereto from time to time in pursuance of section 11 of the Securities and Exchange Board of India Act. 2004. 2006. Malhotra [Proprietor] Membership No: 4518 Place: New Delhi Date: 25th September 2006 306 . The summary of significant accounting policies and notes to accounts adopted by the Company pertaining to the audited financial statements are enclosed as Annexure IV to this report. (iii) The instructions received from the Company requesting us to examine the restated financial information in connection with the proposed initial public offer of equity shares by Fortis Healthcare Limited. The Board of Directors Oscar Bio Tech Private Limited.AUDITORS' REPORT SUMMARY STATEMENTS OF STANDALONE ASSETS AND LIABILITIES AS AT AND STANDALONE PROFITS AND LOSSES FOR THE YEARS ENDED MARCH 31. 2002. 2005. 2003 and 2002 (Annexure III) (together the “summary statements”) as prepared by the Company and approved by the Board of Directors. 2003. This report is intended solely for your information and for the purpose of inclusion in the offer document to be prepared by Fortis Healthcare Limited in connection with the proposed initial public offer (“IPO”) of its equity shares and should not be used or referred to for any other purpose without our prior written consent. 2003 and 2002 (Annexure I) and the attached restated summary statement of profits and losses for each of the years ended on those dates (Annexure II) and the attached restated summary statement of cash flows for the years ended March 31. the holding company. These summary statements have been arrived at after making such adjustments and regroupings as in our opinion are appropriate and are more fully described in the notes appearing in Annexure IV to this report. 2006. 2004. 2005. 3. 2003 and 2002. Piccadily House Captain Gaur Marg Srinivas Puri New Delhi -110065 We have examined the financial information of OSCAR BIO TECH PRIVATE LIMITED (‘OBTPL’ or ‘the Company’) annexed to this report. Restated Financial Information of the Company 1. Based on our examination of these restated statements.L. OF OSCAR BIO TECH PRIVATE LIMITED. 2005 AND 2006 AND STANDALONE CASH FLOWS FOR THE YEARS ENDED MARCH 31. To. In our opinion. 2004. (ii) There are no changes in accounting policies which need to be adjusted in the summary statements in the relevant financial years. 2. Malhotra & Associates Chartered Accountants J. we confirm that: (i) The prior period items have been adjusted in the summary statements in the years to which they relate (Refer to Annexure IV. The summary statements are based on the financial statements which have been audited and reported upon by us. 2005. 2006. which require any adjustments to the summary statements.1992.note 3) (iv) There were no qualification in the auditors’ reports on the financial statements for the financial years ended on March 31. For A. 5. 2004. (iii) The extraordinary items have been adjusted in summary statement (Refer to Annexure IV. 2005. AS RESTATED. 2006.1956 ( the Act). 2004. We have examined the attached restated summary statement of restated assets and liabilities of the Company as at March 31. 2003 AND 2002. and (ii) The Securities and Exchange Board Of India (Disclosure and Investor Protection) Guidelines . the ‘Restated Financial Information of the Company’ mentioned above has been prepared in accordance with Part II of Schedule II of the Act and the SEBI Guidelines.

50 179.84 0.18 0.41 50.23 114.62 271.18 135.12 398.73 As at March 31. AS RESTATED Particulars Fixed Assets Gross Block Less Depreciation / Amortization Net Block Capital Work in Progress including capital advances Expenditure during construction period ( pending capitilisation/ allocation) TOTAL Investments Current Assets.52 242.024.50 11.60 120.18 0.24 766.76 108.76 250.70 898. in Million) As at March 31.80 439.21 387.07 1.04 26.61 127.28 91.50 12.80 51.18 354.46 108.08 162.76 120.09 842.57 191.75 0. Ltd. 2005 149.23 120.31 11.20 458.90 143.74 66.18 149.Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances Total Liabilities and Provisions Secured Loans Unsecured Loans Deferred Payment Liabilities Current Liabilities Total Net Worth Equity Share Capital 1% Non Cumulative Redeemable Preference Share Capital Reserves & Surplus Less: Debit Balance of Profit & Loss Account Less: Miscellanueous Expenditure(To the extent not written off or adjusted) Net Worth As at March 31.66 44.47 128.82 135.OSCAR BIOTECH PRIVATE LIMITED SUMMARY OF ASSETS AND LIABILITIES.75 909.95 499.48 391. 2003 0.60 108.74 26.57 0. Director Director 307 .00 8.04 3.36 4.50 6.00 0.82 454.29 139. 2004 136.30 For A.60 458.65 91.60 389.L. 2006 537.33 13.74 (Rs .49 537. 2002 0.27 127.57 33.44 1.70 631.02 2.66 0.30 120.61 450. Malhotra [Proprietor] Membership No: 4518 Place: New Delhi Date: 25th September 2006 For Oscar Bio-Tech Pvt.50 5.49 217.84 1.90 As at March 31.49 114.20 265.08 46.08 108.66 84.00 8.61 As at March 31.51 0.81 317.26 523. Malhotra & Associates J.

11 0.84 5.46 (12.L.46 0.73 8.41) (18. AS RESTATED PARTICULARS Year Ended March 31.63 (5. 2002 Income Operating Income Other Income Total Income Expenditure Materials consumed Personnel Expenses Operating Expenses General and Administration Expenses Selling and Distribution Expenses Interest Expense Miscellaneous Expenditure written off Depreciation/ Amortization Total Expenditure Profit / (Loss) before Tax Fringe Benefit Tax Current Tax Expense Net Profit / (Loss) before Prior period & Exceptional Item Exceptional Item (Refer Note No.00 52. in Million) Year Ended March 31.73 45.88 6.20) For A.69 44.90) 0.59 13.30 62. Malhotra & Associates J.74) 63.71 7. 2003 (Rs .13 0.93 62.61 0.10 12.90) 6.49) 6.83 (16.58 17.22 1.55 7. 2006 Year Ended March 31.73 0.37) 16.38 (1.30 8.05 12.29 (12.05 0.15 74.89 76.47 0. Ltd.08) (17.OSCAR BIOTECH PRIVATE LIMITED PROFIT AND LOSS ACCOUNT.15 0.46 2.84 5.91 0.15 1.38 5. Malhotra [Proprietor] Membership No: 4518 Place: New Delhi Date: 25th September 2006 For Oscar Bio-Tech Pvt.20) (11. Director Director 308 .00 44. 3 b ) Net Profit / (Loss) as per audited accounts Adjustments (Refer Note No.93 3. 2005 Year Ended March 31.03 41.17 42.74) (5.81 2.88 1.23 1.04 2.93 41.09 63.04 61.83 0.84 (11.08) (1.88 1.58 12.25 63.74 49.93 3. 3 a) Net Profit / (Loss) as restated Profit & Loss Account at the beginning of the year Balance Carried Forward as restated 19.85 1.00 19.08) (1.75 2. 2004 Year Ended March 31.46 16.

90 (7.47 2.88 (0.The above financial statements should be read with Notes on Adjustments and Significant Accounting Policies.93) (123.32 (135.08) 106.18 143.20 Balances with Scheduled Banks on Current Accounts 3.31) 91.73) (433.28 74.IV to the report For A.98 16.82) 16.46 2.00) (0.16) (369.09 (Rs .49) (18.61 Note .98 For the year ended March 31.05 (123.24 247.00 1.66 2.09) (663.81 0.66 (553.22 0.49) (4.72 255.09) (43.97 91. Director Director 309 . AS RESTATED Particulars For the year ended March 31.06) 1.55 0.38 0.36 44.97 140. Cash Flows from Financing Activities Proceeds from issuance of share capital & Share Application Money Proceeds from long-term borrowings Preliminary Expenses ( to the extent not written off) Repayment of Long -term borrowings Net Cash(used in)/genrated from financing activities ( C ) Net changes in cash & cash equilent(A+B+C) Cash and cash equivalents at the beginning of the year Add: Cash acquired on amalgamation Cash and cash equivalents at the end of the year 12.84) (505.87 241.32 24.47 0.84 1.48) For the year ended March 31.34 1.94) 215.60) (256. 2003 0.81 Components of cash and cash equivalents: Cash and Cheques on Hand 0.59) 403.14 (97.45) (26. 2005 For the year ended March 31.88) 329.48) (322.14 841.18 (663.88 (18.70 (604. Cash Flow from Operating Activities Net Profit/(Loss) before Tax.70 481.OSCAR BIOTECH PRIVATE LIMITED STATEMENT OF CASHFLOWS. in Million) For the year ended March 31.95 44. Malhotra & Associates J.84 5.52 91. as restated Adjustment for: Depreciation & Amortisation Depreciation Written back Bad Debts/Sundry Assets written off Operating profit/(Loss) before working capital changes Movement in working capital: Decrease / (Increase) in sundry debtors Decrease / (Increase) in inventories Decrease / (Increase) loans and advances Increase / (Decrease) in current liabilities Cash generated from operations Net Cash genrated from/(used in) operations(A) B. 2006 1.89) 841.52 2.09 202. 2004 5.71 (266.91 377.30 106.29 3.46 0.29 46.18 143.L.52 91. Malhotra [Proprietor] Membership No: 4518 Place: New Delhi th Date: 25 September 2006 For Oscar Bio-Tech Pvt.34) (256.60) 51.29 46. as appearing in Annexure. Cash Flow from Investing Activities Purchase of fixed assets & changes in CWIP Sale/(Purchase) of Investment Net Cash used in Investing activities(B) C.65 1.88 241.63 (10. Ltd.75 124.22 202.21 2.01) (111.48) (433.31) (266.50 208.42 (39.29 481.63 12.02 10.15 537.18) 0. 2002 A.11) 50.

2006. 2004. 2002 the following heads appearing in the profit and loss account have been classified under the head Operating Income. 2006. Income from investments where appropriate are taken into revenue in full on declaration or receipt and tax deducted at source thereon is treated as advance tax. Capital work in progress includes advances also. 2003. In the statement for Profits and Losses as restated. Depreciated fixed assets is provided on straight-line method at the rate and in the manner prescribed in ScheduleXIV to the company. for the years ended March 31. 2004. 2005. as had been the practice in the earlier year therefore there is no question of commenting on the provisions in fluctuation or accounting for the same in these notes.ANNEXURE IV: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 1 a) Significant Accounting Policies System of Accounting The Company follows the accrual basis of accounting Fixed Assets and Depreciation Fixed Assets are stated at cost gross block less depreciation. interest expenses was classified under the head Interest and Financial Charges. 2003. Valuation of Stock During the year company is not holding any stock as compared to the stock held in earlier years Taxation Provision for tax for the period comprises estimated current tax determined to be payable in respect of taxable income. 2005. 2006. 2003 and 2002. Sales (Formulations) Sales (Shares & Securities) Interest Received Dividend Received Profit from Partnership Firm Profit on sale of Investments (Net) JV Profit Closing Stock (Shares & Securities) Less Opening Stock (Shares & Securities) Purchases (Shares & Securities) Finished Goods Purchased Loss on sale of Investments/Assets Loss from Partnership Firm Operating Income d) e) f) g) 2 a) b) Upto the year ended March 31. At the close of financial year the company is not holding any investment. such Operating Income has been reclassified and disclosed accordingly. Material Regroupings For the year ended March 31. for the years ended March 31. 2005. In the statement for Profits and Losses as restated. 2006. which will be amortised appropriately. b) c) Intangible Assets Intangible assets comprises of amount paid to a registered society with similar objective. such Interest Expense has been reclassified and disclosed under the head Operating Expense accordingly. 2002. 310 . 2004.

2002. As these advances pertain to the period prior to the year ended March 31.L. 2002. Loss on write off on assets was shown as line item in the profit and loss account. for the year ended March 31.2006.c) d) e) 3 a) For the year ended March 31. 2005 on advances given to parties. In the statement for Profits and Losses as restated. for the year ended March 31. the effect of same has been recognised in the year ended March 31.2003. Amount written off on assets was shown as line item in the profit and loss account.2005. 2005. 2004 and 2005 was 90%.2006. 2003. no adjustments have been made for the same. 2003 and 2002. a partnership firm. Consequently. material prior period items. for the year ended March 31. 2006. are realizable in the ordinary course of business will at least equal to the amount at which they are stated. In the statement for Profits and Losses as restated. there have been no changes in accounting policies. Upto the year ended March 31. The company during the year has become the wholly owned subsidiary of Fortis Health Care Limited on 20th March 2006. b) c) 4 5 6 7 AS PER REPORT OF EVEN DATE for A. such amount written off has been classified under the head Administration Expense and disclosed accordingly. such Provision for Income Tax has been reclassified under the head Current Assets. Provision for all known liabilities has been made in the accounts. Amount written off was shown as line item in the profit and loss account.MALHOTRA) PROPRIETOR MEMBER SHIP NO 4518 PLACE:NEW DELHI DATE : 25th September 2006 DIRECTOR DIRECTOR 311 . 2005. current assets. In the opinion of the Board of Directors. 2003. 2006. 2004. The share of the Company in the firm during the Financial Years ended March 31. loans and advances. MALHOTRA & ASSOCIATES Chartered Accountants ( J. The Company was a partner in ‘Oscar Syndicate’. 2003 and 2002. 2004. for the years ended March 31. extraordinary items and qualifications resulting from incorrect accounting practices/ policies or failures to make provisions or other adjustments pertaining to the audited financial statements of Oscar Bio Tech Private Limited as at and for the years ended March 31. 2002. Loans and Advances and disclosed accordingly. In the statement for Profits and Losses as restated. In the statement of Assets and Liabilities as restated. such amount written off has been classified as an exceptional item and disclosed accordingly Besides the above. such amount written off has been classified under the head Administration Expense and disclosed accordingly. 2003 and March 31. For the year ended March 31. 2005. Sundry Creditors includes Rupees nil due to small-scale industrial undertakings.17.41 million in the restated profit and loss account above. which require any adjustments to the summary statements.2006. Material Adjustments The adjustment of Rs. pertains to amounts written off in the year ended March 31. Provision for Income Tax was classified under the head Current Liabilities and Provisions. For the year ended March 31.

which differ in certain significant respects from U. which also provide more advanced care to patients. two of our hospitals. the remaining five. a “boutique” style hospital and various satellite and heart command centers. which provide secondary and tertiary healthcare to patients. We currently have a network of 12 hospitals primarily in north India. On September 28. nurses and other healthcare professionals. based on the number of hospital beds.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion of our financial condition and results of operations together with the Financial Statements. we opened our first hospital in Mohali in 2001. on page [ ] of this Draft Red Herring Prospectus. In addition. Overview We believe that we are one of the largest private healthcare companies in India. and we operate and manage EHCR in collaboration with the Government of Chattisgarh. we have expanded our operations by opening multi-specialty hospitals (including some with superspecialty “centers of excellence”). For more information on these differences. Our hospital network consists of multi-specialty “spoke” hospitals. together with our satellite and heart command centers. gastroenterology and mother and child care. with EHIRC serving as a super-specialty “center of excellence” for cardiac care. U. The Financial Statements are based on Indian GAAP. except for Fortis La Femme. 2005. Drawing on the experience of our Promoters as promoters of Ranbaxy Laboratories Limited. see the section titled “Summary of Significant Differences between Indian GAAP. We are committed to delivering quality healthcare services to our patients in modern facilities using advanced technology and our teams of doctors. which provide comprehensive general healthcare to patients in their local communities. orthopedics. which appear elsewhere in this Draft Red Herring Prospectus. who follow international protocols. GAAP & IFRS”. focus primarily on cardiac patients. This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. renal care. Since 2001. a provider of private healthcare services that owns and operates three majorityowned hospitals in north India and operates and manages a fourth hospital in collaboration with the 312 . the notes thereto and the reports thereon. so all references to a particular fiscal year are to the twelve-month period ended March 31 of that year. 15 satellite and heart command centers in hospitals across the country and one heart command center in Afghanistan. a multinational pharmaceutical company headquartered in India (“RLL”). oncology. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the section titled “Risk Factors” and elsewhere in this Draft Red Herring Prospectus. Our fiscal year ends on March 31 of each year. according to information provided by CRIS-INFAC's report published in 2005. Some of our multi-specialty hospitals also include super-specialty “centers of excellence” providing quaternary healthcare to patients in key specialty areas such as cardiac care. a “boutique” style hospital that focuses on women’s health and maternity care. Most of our hospitals are multi-specialty hospitals. and with a vision of creating an integrated healthcare delivery system. neuro-sciences. are operated and managed by us but owned by trusts or societies or other corporate owners. in which we currently own a 5% interest. we acquired a 90% interest in Escorts Heart Institute & Research Centre Limited (“EHIRCL”). We also operate Fortis La Femme. GAAP and IFRS. and super-specialty “hub” hospitals.S.S. including patients from our “spoke” hospitals and other hospitals in the surrounding area. Six of our hospitals are owned or majorityowned by us. Our revenue is referred to herein and in the Financial Statements as income. Escorts Heart Institute & Research Centre at New Delhi (“EHIRC”) and Escorts Heart Centre at Raipur (“EHCR”).

In April 2006. the date on which IHL became a board-controlled subsidiary of FHL pursuant to an agreement between FHL and IHL.5 million. and enhanced our profile among patients. 329. banks and ATMs. if any (and are not responsible for its losses). We also receive income from the Fortis Inn rehabilitation center for patients and their visitors at Fortis Hospital. we have the right to receive a significant portion of the hospital's total profits. maintaining and running the hospital. 350 million to obtain the perpetual right to operate the hospital and spent approximately Rs. including arranging funds. and infrastructure for the hospital. a hospital which we operate through our Oscar Bio-Tech Private Limited (“OBPL”) subsidiary under a perpetual O&M contract. to which we retain title. commenced operations. Mohali. 30. Following the IHL acquisition. In addition. financed through an equity contribution from FHHL (the “IHL acquisition”). especially in the cardiac care specialty area.9% interest in International Hospital Limited (“IHL”) from the Promoter Group for total consideration of approximately Rs.17 million in medical and other equipment. we assumed the operation and management of Fortis La Femme in south Delhi. 90 million to OBPL. Pursuant to the terms of our share subscription agreement with the hospital’s corporate owner. We spent approximately Rs. Acquisitions and Development Projects In May 2006. 100. managing. The Escorts hospitals acquisition more than doubled our gross income and increased our expertise and prominence. We also invested approximately Rs. the results of IHL have been included in our restated consolidated financial statements with effect from December 20. Jammu & Kashmir.850. a birthing center which we have recently begun to upgrade to a full service women’s hospital. Noida. 5.5 million (the “OBPL acquisition”).5 million and Rs. Prior to the OBPL acquisition. OBPL only conducted non-hospital investment business. the Fortis Flt. we acquired a 100% interest in OBPL from a Promoter Group company for total consideration of approximately Rs. 301. for total consideration of Rs. paid by third-party vendors who are on-site at our owned hospitals.26 million on improvements to the hospital building and pre-operative expenses. in each case. we acquired a 99. In January 2006.6 million equity contribution to IHL. gift shops and cafeterias. 2006. Lt. Vasant Kunj.10 million (the “Escorts hospitals acquisition”). We financed our payments in respect of the hospital through short-term debt obligations. Although the IHL acquisition did no occur until March 20. 29. Our primary sources of income are: (i) (ii) (iii) inpatient and outpatient hospital services. 470. the “Escorts hospitals”) and. on March 20. and retail sales at the pharmacies we run at our owned. Rajan Dhall Hospital. Vasant Kunj. 2006. Under the terms of the O&M contract. On March 20. Following the OBPL acquisition. hospital management fees. Rajan Dhall Hospital. IHL owns Fortis Hospital. Also. We are responsible for building. we assumed the operation and management of the Khyber Medical Institute in Srinagar. OBPL owns property on which a hospital is to be constructed in northwest Delhi. operated and managed 10 satellite and heart command centers. 2002. In addition to its O&M contract for the Fortis Flt. FHL made additional equity contributions of Rs. which commenced operations in August 2004.Government of Chattisgarh (collectively. at the hospital's expense. Lt. we receive income from rent or access fees. 2006. such as pharmacies. FHL made an additional Rs. Fortis-branded hospitals. at the time of the acquisition. all of which has been discontinued. Sunrise 313 .

40.6 million. In addition. a provider of private healthcare services that owns and operates three majority-owned hospitals in north India and operates and manages a fourth hospital in collaboration with the Government of Chattisgarh (collectively. the “Escorts hospitals”) and. as well as to undertake a joint project with a state government and manage a hospital in a rural area as part of our corporate social responsibility initiative. In August 2003. the other shareholders have an option to require us to purchase their entire interest in the corporate owner to us. the shareholders have 30 days from the expiration of the Option Period to sell their shares to us at Rs. We are developing hospitals in Jaipur. Mohali.850. However.10 million (the “Escorts hospitals acquisition”). Rs. 2005. 2006. Rajan Dhall Hospital.3 million. the results of operations of our owned hospitals are reflected on a consolidated or equity basis in our consolidated financial statements from the respective dates of their acquisitions. After the second anniversary. 2006). We have also extended a loan in the form of convertible debt to SMPL. In addition. purchasing medical equipment which we lease to the hospital. the other shareholders have one year from the date of our acquisition of the 51% to sell their shares to us at face value plus 12% interest per annum from September 1. we acquired a 90% interest in EHIRCL. Also in 2005. in some cases.00. northwest Delhi and Gurgaon. we assumed the operations and maintenance of the Fortis Jessa Ram Hospital. Our total investment in Fortis Hospital. with a number of other parties to assume O&M contracts and acquire greenfield sites for hospitals outside our core regions.575 million of which has been repaid to date. 1. 6. Mohali was Rs.600 million through fiscal 2010. we are continuously evaluating acquisition. greenfield development and O&M contract opportunities and are in various stages of consideration and development of other projects. at the time of the acquisition.55 million as convertible debt to the corporate owner out of the agreed amount of Rs.91 million. We have financed our investments to date in the Fortis La Femme hospital from operations and financing activities. 28. we acquired a 5% equity interest in SMPL. 10 satellite and heart command centers for total consideration of Rs. which was September 1. 20 million payment for building improvements and pre-operative expenses at Fortis Flt. If we acquire a 51% interest. After the Option Period. and any income received typically represents profit. Lt. Haryana in the NCR for an estimated total cost of Rs. including in some cases having signed a non-binding memorandum of understanding. may be altered or take longer than anticipated to complete or may exceed our cost expectations.00 to 1. Some or all of these projects may not be undertaken or. even with an 314 . Vasant Kunj and. which is convertible into an additional 21% equity interest in SMPL at any time within two years from the date of infusion of the first tranche of the loan. If we do not acquire a 51% interest. some of which are larger in scale than any project we have attempted to date. we are currently in various stages of negotiations. we had advanced Rs. we are generally not responsible for capital expenditures at our O&M contract hospitals. Our total investment in this facility was approximately Rs. Amritsar. 5. In addition. We commenced operations in June 2001 with the opening of Fortis Hospital. 2. Operating expenses are also paid by the hospital owners and we receive a percentage of total income and/or operating profits. All our acquisitions were accounted for under the purchase method of accounting and. At June 30.Medicare Private Limited (“SMPL”). the date of the subscription agreement (the “Option Period”). we opened Fortis Hospital. In September 2005. the subscription agreement provides that the loan shall automatically convert into a 21% equity interest in SMPL. we assumed the operations and management of Jeewan Mala Hospital in New Delhi. Also in 2003. Rajasthan. Other than our initial Rs. 23. accordingly. financed with equity investments from our Promoters and bank debt in a ratio of approximately 1. and others. irrespective of whether we acquire a 51% interest in the corporate owner. and we subsequently paid the remaining balance. 15 per share (provided that consideration is only payable in respect of shares outstanding on January 3. if undertaken. 2005. 2006. We financed the Escorts hospitals acquisition with short-term bank loans. we have a further option to acquire further shares to increase our interest in the corporate owner to 51% at any time from the second anniversary to the fifth anniversary of January 3.281.

minor subsidiaries are included as well. Our financial statements have been prepared in accordance with Indian GAAP and standards issued by the Institute of Chartered Accountants of India. 2005 and it more than doubled the size of our group. Vasant Kunj and owns land for our planned greenfield hospital in northwest Delhi. Lt. which collectively represent our principal operations. we have not included a separate discussion of the results of operations for OBPL on a stand-alone basis as OBPL only commenced hospital-related operations in May 2006 and its income prior to fiscal 2007 related only to non-hospital investments and its expenses related only to non-hospital and pre-operative expenses. which owns Fortis Hospital. In particular. our liquidity and capital resources discussion below covers each of FHL and IHL on a stand-alone basis and EHIRCL on a consolidated basis with its subsidiaries. either to fund the purchase price or to acquire the land. with intercompany accounts and transactions eliminated in consolidation and minority interests in subsidiaries in which we own a majority interest accounted for in accordance with Indian GAAP. December 20. March 21. the IHL acquisition and the OBPL acquisition as if they had occurred at the beginning of fiscal 2006. as these will include the consolidated results of EHIRCL and its subsidiaries. For historical periods. because it has been deemed to be a boardcontrolled subsidiary under Indian GAAP. Acquisitions of existing hospitals and building hospitals on greenfield sites tend to require substantial cash payments. even though the IHL acquisition did not occur until March 20. In addition. 2002. especially in the case of a greenfield hospital. Noida. 2002. Note Regarding Presentation Our historical operating results may not be indicative of our results on a going-forward basis. Stand-alone financial statements for our other. 2006 for SMPL. We have set forth in this DRHP stand-alone financial statements for Fortis Healthcare Limited (“FHL”) and IHL and consolidated financial statements for EHIRCL and its subsidiaries. 2005 and 2006 for FHL. 2006 for OBPL. as there are no meaningful comparative periods available for our consolidated results since the closing of the Escorts acquisition occurred during fiscal 2006. A pro forma consolidated income statement is included in this Draft Red Herring Prospectus that gives effect to the Escorts hospitals acquisition. SMPL (the corporate owner of Fortis La Femme) since the respective dates such subsidiaries were acquired (or. all its subsidiaries and its associate. We completed the Escorts hospitals acquisition on September 28. 2006. Our forwardlooking disclosure and future liquidity needs and capital expenditures are discussed on a consolidated basis. Because we have not discussed our consolidated or pro forma results or the results for our other minor subsidiaries below. you should not place undue reliance on the discussion below and should review carefully all the financial statements and other information included herein. 2005 for EHIRCL and its subsidiaries. Additional consolidated financial statements have not been prepared because we did not have any other subsidiaries in prior periods.O&M contract hospital. which has an O&M contract for Fortis Flt. on March 20. We completed the acquisition of IHL. Rajan Dhall Hospital. hospital buildings and equipment and to finance the operations of the hospital. in the case of IHL. we have included consolidated financial statements as at and for the years ended March 31. As a result of these high “start-up” costs and. we have acquired certain rights to participate in the financial and operating 315 . 2003. an owned hospital will typically operate at a loss for a number of years before achieving profitability. As a result of our rights under a Shareholders’ Agreement entered into with SMPL. The discussion below covers only the stand-alone results for FHL and IHL and the consolidated results for EHIRCL. the gestation period before the hospital matures. The consolidated financial statements also consolidate the accounts of IHL since December 20. since it came a board controlled subsidiary) and SMPL became our associate: September 29. IHL and OBPL for full periods. we may experience periods of little or no profit as we redefine the role of the hospital after assuming the O&M responsibilities therefor. 2002 for IHL and January 3. and the acquisition of OBPL. 2006. 2004. The consolidated financial statements consolidate the accounts of the relevant wholly-owned and majority-owned subsidiaries.

23 million of indebtedness outstanding at the time of the acquisition. The auditors of the EHIRCL financial statements have included a qualification in their audit report in respect of EHIRC’s litigation with the DDA and the Income Tax Authorities due to the potentially high liability to which these cases expose EHIRC. We also discuss the ways in which we generate income and the main expenses associated with generating this income. FHL may experience further erosion to its net worth. its financial statements have been prepared on a going-concern basis in light of the Issue and management’s projections of better financial performance in fiscal 2007.10 million. However. and subject to certain escrow arrangements. there are some specific items that we believe have impacted our results of operations and. we expect to be better able to negotiate network-wide rates with our suppliers. which do not incorporate the consolidated results of the Escorts hospitals for the full year. The total consideration for the Escorts hospitals acquisition was approximately Rs. EHIRCL and its subsidiaries had approximately Rs. Please also see the section titled “Risk Factors” on page [ ] of this Draft Red Herring Prospectus. See note B(c)(iv) in the notes to our consolidated financial statements included in the section titled “Financial Information” on page [ ] of this Draft Red Herring Prospectus. and our minority investment in SMPL is accounted for using the equity method. If these projections differ from actual performance. FHL acquired a 90% interest in EHIRCL. reflect those adopted by FHL.850. our results for the year ended March 31. or could have. all of which remains outstanding. the notes to FHL financial statements include notes explaining that although FHL has experienced significant net losses. which may differ significantly from those adopted by FHL. Where subsidiaries engage in the provision of similar services as those provided by FHL. Our consolidated financial statements are presented in the same manner as FHL’s unconsolidated financial statements. We also believe the prominent reputation of the Escorts hospitals has enhanced the reputation of all our hospitals in the marketplace. 832.decisions at SMPL. affected by a number of events and actions. 2005. and will continue to be. directly or through majority-owned subsidiaries. which owns. some of which are beyond our control. We financed the Escorts hospitals acquisition with Rs. except that in certain cases. is substantially larger than FHL. No adjustments have been made to our consolidated financial statements or our pro forma consolidated financial statements to harmonize differences in accounting policies. EHIRCL. In addition. 316 . excluding the payment of Rs. We believe the increased scale and larger infrastructure created by the Escorts hospitals acquisition will enable us to generate economies of scale across our network. Subsidiaries and any joint ventures adopt their own accounting policies for transactions in which FHL is not engaged. 5.38 million of fees and expenses. The accounting policies discussed below. 2006. we discuss several factors that we believe have. four hospitals in north India. unless otherwise indicated. an impact on these results. together with its subsidiaries. such as depreciation. In addition. 2007. In this section. Accordingly. uniform accounting policies are adopted for like transactions. in some cases.850 million borrowed under short-term bank loans. For example. EHIRCL and its subsidiaries continue to follow their historical accounting policies. Factors affecting our results of operations Our results of operations have been. which differ from those adopted by FHL. SMPL also follows its own accounting policies. 39. Our share in the profits of SMPL is shown as a separate line item in our consolidated profit and loss account statement. incorporating the results of the Escorts hospitals for the full year will differ significantly from our results for the year ended March 31. will continue to impact our results on a consolidated level and at our individual facilities. The Escorts Hospitals Acquisition On September 28. 5.

our acquisition of IHL did not change the operations of Fortis Hospital. OBPL did not conduct any hospital-related business prior to fiscal 2007 and thus its results of operations on a going-forward basis will be quite different from the historical results included elsewhere in this Draft Red Herring Prospectus. and we may not be able to recover amounts due to us under the indemnity arrangements in the acquisition agreement relating to the Escorts hospitals acquisition. FHL made additional equity contributions of Rs. we acquired a 100% interest in OBPL. we may not have any recourse against the sellers in the Escorts hospitals acquisition. In addition.We have recently initiated the integration of the Escorts hospitals and the rest of our hospital network and we intend to adopt the best practices from the Escorts hospitals at the other hospitals within our network and implement the best practices at our existing hospitals at the Escorts hospitals as well. Vasant Kunj and owns property on which a hospital is to be constructed in northwest Delhi from a Promoter Group company for total consideration of approximately Rs. we could be required to make large payments to governmental authorities or could. Rajan Dhall Hospital. in some circumstances. Lt. See the sections titled “Outstanding Litigation and Material Developments” and “Our Business—Legal Proceedings” on pages [●] and [●]. OBPL’s income related only to non-hospital investments and its expenses related only to non-hospital and pre-operative expenses. respectively. The IHL and OBPL Acquisitions On March 20. In addition. 30. (iv) the application of a similar free treatment condition in the allotment letter in respect of the EHRC hospital site requiring the provision of free treatment to local residents of Faridabad at EHRC. Following the IHL acquisition. Lt. which has an O&M contract for the Fortis Flt. EHIRCL and its subsidiaries are involved in various significant legal proceedings challenging (i) its right to a leasehold interest on the land on which the EHIRC hospital is located. in connection with the licensing matter. we and personnel in control positions could also face civil and criminal liability. 329. Prior to fiscal 2007. Following the OBPL acquisition. IHL had approximately Rs. Vasant Kunj is involved in various significant legal proceedings challenging (i) its right to a leasehold interest on the land on which the 317 . As IHL and thus. the validity of the Escorts hospitals acquisition. Noida. lose our right to the shares in EHIRCL and its subsidiaries or our right to the EHIRC and EHRC hospital facilities or our right to operate our inpatient business at EHIRC. Other than with respect to the tax litigation and the litigation challenging our corporate existence. Rajan Dhall Hospital. we may not be able to recover amounts paid by us in connection therewith from the sellers. 2006. Noida. On a going-forward basis. all of which remains outstanding. 301. 90 million to OBPL. The society that owns Fortis Flt. 469. of this Draft Red Herring Prospectus for additional information regarding these proceedings. Although a portion of the consideration we paid in connection with the Escorts hospitals acquisition remains in an escrow account pending the resolution of the income tax matters. OBPL’s non-hospital investment business has been discontinued. FHL made an additional Rs.6 million equity contribution to IHL. (ii) its corporate existence. however. 100.5 million and Rs. (iii) the application of a condition in an allotment letter in respect of the EHIRC hospital site requiring the provision of free treatment to indigent patients at EHIRC.5 million. our consolidated financial statements will include the results of Fortis Hospital. by implication. If any of these matters is resolved in a manner adverse to us. We funded the IHL acquisition through an equity contribution from FHHL. Fortis Hospital. and. Although we may have a claim against the sellers in the Escorts hospitals acquisition for breach of warranty in the event the litigation challenging our corporate existence is resolved in a manner adverse to us. amounts found to be due under the income tax proceedings may exceed the escrow amount.19 million of indebtedness outstanding at the time of the IHL acquisition. we acquired IHL from the Promoter Group for approximately Rs. were previously owned by the Promoter Group and continue to be managed by the same management team. Also on March 20. (v) non-renewal of EHIRC’s nursing license and (vi) certain income tax exemptions claimed by EHIRC’s predecessors. Noida in any way and no integration is required. 2006.5 million.

is challenging the trust's right to a leasehold interest on part of the land on which the hospital is located. 29. potentially. and we could lose our entire Rs. FHL. the available talent pool at that location. If either matter is resolved in a manner adverse to the hospital. and even if such a claim were successful. sufficient funds to do so. If this matter is resolved in a manner adverse to the hospital. the trust may not have sufficient funds to compensate us in full or at all. we examine the location. See the sections titled “Outstanding Litigation and Material Developments” and “Our Business—Legal Proceedings” beginning on pages [●] and [●] respectively. Although we may have a breach of warranty claim under our O&M contract with the trust that owns the hospital. We consolidate the operating results of an acquisition for the periods subsequent to acquisition. for the existing facilities. our O&M contract for the hospital would no longer be effective. 470. the quality of the infrastructure. each hospital acquisition can materially affect our overall results and financial profile. 350 million investment in respect of the license fee we paid to obtain the O&M rights for this hospital and the Rs.hospital is located and (ii) its right to a hospital nursing license. but to date.17 million we have spent on medical and other equipment and other hospital infrastructure that is not movable. the society and. including the number of target patients in the area. These efforts often result in cost increases to expand 318 . an application for renewal of the hospital's nursing license was filed in January 2006. and we are continuously evaluating new acquisition. the price and. The existing registration expired in March 2006 and the hospital is currently operating without a valid registration. which holds the O&M contract in respect of the hospital. of this Draft Red Herring Prospectus for additional information regarding these proceedings.26 million we have spent on improvements to the hospital building and pre-operative expenses. which could result in civil and criminal liability against the hospital and. Other Litigation Matters The trust that owns Fortis Jessa Ram Hospital is involved in significant legal proceedings in which the Land & Development Office of the Ministry of Urban Development of the Government of India (the “L&DO”). which holds the O&M contract in respect of the hospital. respectively. our subsidiary. if the society is unsuccessful in defending the registration matter. the society does not currently have. the hospital has not received a renewal. OBPL. In addition. In addition. We typically take a number of steps to increase operating income when we acquire a hospital. greenfield development and O&M contract opportunities and are currently in various stages of evaluating and implementing a number of projects. and personnel in control positions. Expansion Plans We have grown from owning and operating a single hospital in 2001 to running a network of 12 hospitals and 16 satellite and heart command centers today. Although the society that owns the hospital is required under the O&M contract to reimburse us for these amounts with interest in such an event. in which the trust represented to us that it was operating in compliance with the terms of its real property leases. See the sections titled “Outstanding Litigation and Material Developments” and “Our Business—Legal Proceedings” beginning on pages [•] and [•]. our O&M contract for the hospital would no longer be effective. and we could lose all our investments in the infrastructure of the hospital. we may not be successful in bringing any such claim. potentially. Because of the relatively small number of hospitals we own. of this Draft Red Herring Prospectus for additional information regarding these proceedings. which owns approximately 10% of the land on which Fortis Jessa Ram Hospital is located. See the section titled “Our Business— Future Plans” on page [●] of this Draft Red Herring Prospectus for a discussion on several of our most developed plans. When evaluating the viability of a new opportunity. and personnel in control positions could face civil or criminal sanctions for operating a hospital without a registration. as well as the portion of the Rs. the reputation of the staff and the institution’s work culture. and in the future may not have (even if it were successful in claiming compensation from the DDA for the hospital building).

quality and specialties of doctors providing patient care within the facility. we determine the number of beds in a hospital allocated to cardiac care. We believe that the important factors influencing the overall utilization of a hospital include the quality and market position of the hospital and the number. the financial performance of a newly acquired hospital may adversely affect our overall operating margins in the short term.206. As a significant portion of inpatient income is derived from medical services provided in the initial two to three days of an inpatient visit (with the remaining patient stay generating primarily occupancy income). this effect should be mitigated by the expanded financial base of our existing hospitals. emphasis on quality of care and convenience for patients and doctors. upgrade facilities. If the Pre-IPO Placement is completed. 1. Generally. 319 . that is.614 Equity Shares with certain investors (the “Pre-IPO Placement”). Pre-IPO Placement The Company is considering a pre-IPO placement of up to 17. Year ended March 31. Utilization across the healthcare industry is also affected by improved treatment protocols as a result of advances in medical technology and pharmacology. we believe that the ability of a hospital to meet the healthcare needs of its community is determined by its breadth of services. the number of Equity Shares issued pursuant to the Pre-IPO Placement will be reduced from the Net Issue. we strive to increase our average income per bed in use by reducing the length of patient stay. We have incurred cumulative restated consolidated net losses of approximately Rs. For a discussion of the performance of our individual hospitals. In addition.37 million. focusing on complex procedures with higher margins and achieving higher operating efficiency through the adoption of advanced technology and through the provision of improved medical services. Our occupancy rates are critical to optimizing profitability at our facilities and form an integral part of our management information system. equipment procurements. We will complete the issuance. As we acquire additional hospitals. level of technology. the number of patients who were diagnosed after an angiography as requiring an invasive cardiac procedure who then follow through with such procedure at one of our hospitals. Admissions and Average Income per Bed in Use Our inpatient income is highly dependent on the occupancy rates at our hospitals. Other factors which impact utilization include the growth in local population and local economic conditions. increasing capacity turnover. subject to a minimum size of 10% of the post-Issue capital. we also closely monitor our conversion rate. of such Equity Shares prior to the completion of this Issue. Based on these rates. Our acquisitions also involve costs related to the acquisition itself and the integration process. The benefits of our investments and of other activities to improve operating margins generally do not occur immediately and it may take between three and five years for a greenfield hospital to generate operating profits. see the section titled “Our Business—Our Hospitals” beginning on page [●] of this Draft Red Herring Prospectus. pricing of various procedures and advertising initiatives. In our cardiac care hospitals and departments.services. The following table sets forth certain aggregate statistics for our owned hospitals. strengthen medical staff and improve market position. The occupancy rate of a hospital is a function of conversions of outpatients to inpatients and of direct admissions. as well as EHCR. Consequently. for the past three years. we monitor the reverse trend: the number of patients diagnosed elsewhere who choose to come to our facilities for treatment. Our conversion and reverse conversion rates are important tools in evaluating the performance of our cardiac care departments. if any.884.

.. tend to be higher than prices for similar procedures at our “spoke” hospitals...... Represents consolidated total income (including income generated from O&M contracts and satellite and heart command centers) divided by the number of inpatient admissions at our owned hospitals and EHCR. In addition... because we are committed to maintaining the highest standards of care. Moreover.01) 2005 2 176 9. requires us to invest in technologically sophisticated equipment...... especially our “hub” hospitals..478 219 (0.08 (0.....07 - This table does not include any operating statistics for hospitals managed.... Represents inpatient beds.... but not owned.... our prices at hospitals located in major metropolitan areas.... Average income per inpatient admission (Rs..294 370. as much of this equipment is manufactured outside India.. Excludes beds in emergency rooms. Average daily census(e) ............. Represents the total number of patients admitted (in the facility for period in excess of 23 hours) to our hospitals and is used by management and certain investors as a general measure of inpatient volume... in particular at our quaternary care “centers of excellence”.. This equipment is generally very expensive and forms a major component of our annual capital expenditures budget.......210 33.494 70...............424 1.... in millions)(f) ......... although within a hospital. beds used for dialysis treatments and other outpatient treatments..02) 0........01) 0... as well as our focus on delivering high-end care with technologically advanced equipment in our operating theaters and comfortable recovery rooms..... Number of beds in use at end of period(b) .... such as robots and scopes used in minimally invasive surgeries...02) 0. but includes EHCR. we face foreign exchange risk when we purchase such equipment... FHL EHIRCL (consolidated) IHL ___________ Notes: (a) (b) (c) (d) (e) (f) 7 1.....2006 Number of hospitals at end of period(a) ........ Inpatient admissions(c) . Represents the average number of inpatient and outpatient registrations each day. if billed separately.. by FHL and its subsidiaries...... Pricing Premium Pricing: Historically...........04) 2004 2 149 8... Includes multiple visits by the same patient are counted separately......855 115 (0... we are continuously upgrading and replacing this equipment as new technologies become available..............030 55........... 320 .............. We are able to charge a premium to public facilities and smaller hospitals in part as a result of the number of prominent doctors on staff at our hospitals. we have been able to charge premium prices for our services above the rates charged for similar services by government-run facilities and smaller hospitals and we price our services at levels comparable to the prices charged by our corporate competitors...... we charge the same price for a procedure regardless of the type of recovery room a patient has chosen.. Equipment The complex nature of the procedures we perform at our hospitals.......................... This could make our existing equipment obsolete more quickly than anticipated. In addition....08 (0.166 (0............. Outpatient registrations(d).

However. In some cases. particularly in connection with salaries and retainer fees paid to doctors at our Escorts hospitals. as discussed below. Our packages are determined on a hospital-by-hospital basis. Package Pricing: For a number of our more common procedures with predictable outcomes. the hospital image and brand reputation. often representing discounts ranging from 5% to 15% to our published rates. medical procedures. rationalizing manpower and implementing other cost control policies. Conversely. among other things.We believe we are generally able to maintain charging premium prices without negatively impacting our patient volumes. and we may be unsuccessful in passing along higher prices in the future to our patients without affecting patient volumes. that we may define the parameters of a package too broadly for a given price and be unable to recoup our costs under such package. We have attempted to reduce the effects of price shopping by offering package pricing. Patient volumes Patient volumes are driven by. we offer patients the option to pay a package price for a set range of services. and pricing varies depending on the risk profile of the patient. because the rates charged under these arrangements are set for a specified period. 321 . expanding our range of services. and we believe a well-presented package provides patients with a degree of certainty about the costs of a procedure and offers us a predictable income stream per procedure. Our ability to charge premium rates increases at a hospital as the hospital becomes more established and our name recognition increases. and by ensuring that our hospitals are staffed with highly-skilled doctors with strong reputations in the communities in which we operate. we may not be able to increase the prices we charge thereunder with the same flexibility as our published prices. the economic and social conditions of local communities. We believe the increase in patient volumes that results from these arrangements more than offsets any discounts we provide under such arrangements. Package pricing is a common phenomenon at hospitals in India. Negotiated Rates: Many of our owned hospitals have entered into arrangements with large employers in the regions in which we operate to provide healthcare services to their employees or subscribers at discounted rates. a large proportion of our patients “price shop” when choosing a hospital at which to undergo a procedure as most patients do not have health insurance and must pay for their healthcare needs directly. despite our ability to charge premium prices over government and small hospitals. Suppliers have also tended to pass on the effects of higher costs through increasing the supply prices payable by us. the clinical reputation of our doctors. even if our costs increase. medications administered during their inpatient period and room charges. the type of services offered. climate and weather conditions. including examinations. We try to offset the effects of increasing operating costs by measures such as increasing our own charges. However. seasonal illness cycles. doctor retention and attrition. we provide discounts in the form of negotiated lower prices for individual procedures. we may define the parameters too narrowly. requiring the patient to pay for additional costs not included in the package and thus negate many of the benefits of the package pricing perceived by the patient. the degree of competition from other hospitals. which varies by package. negotiations or terminations of corporate contracts in respect of employee healthcare needs and spending ability. There is a risk. however. However. we have not always been successful in controlling upward pressure on expenses. Upward Pressure on Wages and Other Expenses: The healthcare industry is relatively labor intensive and wages and other operating expenses have shown an upward trend. healthcare competitors.

EHIRCL (on a consolidated basis) and IHL. For fiscal 2006. gastroenterology and orthopedics departments. in the case of EHIRCL and its subsidiaries includes the difference between published prices for procedures and negotiated lower rates offered under certain arrangements) represented approximately 6. medical. management fees from hospitals and income from satellite centers could either increase or decrease depending on the rate and nature of our expansion. but do not own. Inpatient income: Inpatient income represents income generated from the provision of inpatient services. We expect inpatient income to increase in the future both in absolute terms and as a percentage of total income as we expand our hospital network and continue to focus on sophisticated procedures in cardiac care. sophisticated inpatient surgical procedures. food and beverages for patients and room charges. hospital management fees and the operation of retail pharmacies at our owned. Fees derived from our satellite and heart command center O&M contracts are typically based on a percentage of total income or profits above a specified threshold amount or a fee per procedure performed. including fees for medical and diagnostic services. in particular. 322 .46% and 1. Management fees from hospitals and income from satellite centers: Management fees from hospitals and income from satellite centers represent fees we derive from the facilities we operate and manage.Service mix Charges for inpatient and outpatient services vary significantly depending on the type of service. An increasing portion of our income is derived from the provision of services in the cardiac care. Outpatient income is recognized as and when the services are rendered.87% and 11. For fiscal 2006. Outpatient income: Outpatient income represents income generated from the provision of outpatient services at the hospitals we own. respectively. including fees for medical services. we expect to experience increases in hospital management fees from new and existing O&M hospital partners. respectively. neuro-sciences.52%. consisting of hospital services. IHL does not have any O&M contracts with hospitals or satellite and heart command centers.29% of the restated total income for FHL. As a percentage of consolidated total income. Fortis-branded hospitals. We expect outpatient income to increase in the future as a result of both higher demand for healthcare services in India and the expansion of our hospital network. the fees we derive from one of our O&M contracts are based on a percentage of net operating profits. including our satellite and heart command centers. oncology and mother and child care. neuro-sciences. EHIRCL (on a consolidated basis) and IHL. Additionally. gross outpatient income (which. the corporate payer. and we expect the trend to continue in the near future. For fiscal 2006.62%. surgical or intensive care. and the geographic location of the hospital. orthopedics. gastroenterology. which generate significant income and for which there is an increasing demand.06% of the restated total income for FHL. 100.68% of the restated total income of FHL and EHIRCL (on a consolidated basis) respectively. Inpatient income is recognized as and when the services are rendered.67% and 85. Income Our income is mainly derived from the provision of healthcare services. gross inpatient income (which. Fees derived from our O&M contracts with hospitals are typically determined based on a percentage of the gross income at the hospital. management fees from hospitals and income from satellite centers represented approximately 0. As we add new O&M contract hospitals to our network and improve the operating efficiencies at our existing O&M contract hospitals. in some cases only if gross income exceeds certain thresholds and in other cases reduced by any net cash losses. such as preventive care. 6. in the case of EHIRCL and its subsidiaries includes the difference between published prices for procedures and negotiated lower rates offered under certain arrangements) represented approximately 90. renal sciences. with fees for medical services representing the majority of the income. as the Indian economy grows and corresponding “lifestyle” diseases become more prevalent.

as well as drugs and consumables administered to a patient while on-site at one of our owned hospitals and include customs duty and freight charges. subsidies also include the discounts provided under arrangements with employers and insurance companies.25%. less any discounts.97% and 3. including Promoter Group companies or affiliates. respectively. EHIRCL (on a consolidated basis) and IHL. contributions to the statutory provident fund. pharmacies. materials consumed could represent an increased or decreased percentage of consolidated total income depending on our service mix. and we adjust for sales returns during the period in which returns occur. all expenditures are recorded net of amounts reimbursed to us by our affiliates or other third parties.67% of the restated total income of FHL.Pharmacy income: Pharmacy income represents income generated from retail sales at the pharmacies we operate at the Fortis-branded hospitals in Mohali. management considers the time spent in respect of services delivered to the hospitals we own compared to that spent in respect of affiliated companies and O&M contract hospitals and goods and services consumed by the various entities. personnel expenses. other income represented approximately 2. In making these allocations. We expect discounts and subsidies to increase in absolute terms as a result of higher patient volumes and. Other income: Other income consists primarily of fees generated from rent or access charges paid to us by third-parties in respect of banks and ATMs. Expenditure The primary categories of our expenditures include materials consumed. 0. selling. discounts with employers and insurance companies are directly reflected in the inpatient income and outpatient income amounts. In our financial statements. We expect pharmacy income to increase as a result of higher patient volumes at our hospitals. For example.84% of the restated total income of FHL and IHL. IHL and EHRCL. For FHL. We expect materials consumed to increase in absolute terms as we continue to expand our network and prices for consumables increase. For fiscal 2006. For EHIRCL and its subsidiaries (other than EHRCL). pharmacy income represented approximately 1. as we expand our network and our existing hospitals mature. We recognize this income at the point of sale. These allocations are based on estimates made by management. joint replacement surgeries tend to have higher materials consumed costs than mother and childcare procedures. Materials Consumed: Materials consumed include consumable medical supplies. cafeterias and gift shops co-located at our owned hospitals and income from the Fortis Inn rehabilitation center we operate on-site at Fortis Hospital. Mohali. but decrease as a percentage of consolidated total income due to the economies of scale and greater bargaining power that comes with a larger hospital network. respectively. We exclude from expenditures those common expenses allocated to affiliated companies under the same management and our O&M contract hospitals. statutory gratuities. we may choose to outsource our retail pharmacy business to other service providers. EHIRCL and its subsidiaries do not earn any retail pharmacy income. operating expenses. Discounts and subsidies: Discounts and subsidies represent discounts on healthcare services for individual patients. general and administrative expenses and financial expenses. Noida and Amritsar. In the future.62% and 0. For fiscal 2006. We expect other income to increase in actual terms as we expand our network but to decrease as a percentage of consolidated total income as our hospitals mature and inpatient and outpatient income increase. Personnel Expenses: Personnel expenses consist primarily of salaries and wages. in respect of the Escorts hospitals (other than EHRC) we also expect discounts and subsidies to increase as a percentage of total income as the number of negotiated arrangements and the number of patients covered by such arrangements increase. bonus payments and staff 323 . as well as free treatment requirements included in the terms of the allotment letters in respect of the land on which EHIRC and EHRC are located and EHCR’s arrangement with the Government of Chattisgarh. staff welfare expenses. Our most significant costs include the costs for medical implants and drugs and consumables. However.

communications and non-medical professional fees. rent for hospital buildings. Opening a new hospital requires us to install a basically full complement of doctors even if occupancy rates have not yet reached target levels. We depreciate our property. we expect personnel expenses to increase in absolute terms. general and administrative expenses to decrease as a percentage of consolidated total income as these costs (many of which are fixed) are spread out over a larger income base as we expand our network. 324 . although this ratio may vary from project to project and may be much higher. utility charges (including power and fuel). primarily as a result of our expansion plans. we expect financial expenses to decrease as a percentage of consolidated total income as our income base grows as a result of growth in our network and we intend to maintain a ratio of debt to equity financing for new projects of up to 1. and thus initially. security. repairs and maintenance. In the future. which would increase our financial expenses. especially on a temporary basis before we secure permanent financing for a new project. During periods of expansion in which newly acquired or opened owned hospitals make up the majority of our portfolio. Seasonality Our inpatient and outpatient volumes are lowest during the summer months and other holiday periods as both patients and doctors may take vacation.25 to 1. insurance. repairs and maintenance of buildings.recruitment and training. Operating Expenses: Operating expenses consist primarily of retainer fees to doctors at our owned hospitals who act as independent contractors rather than as employees.00. General and Administrative Expenses: Selling. general and administrative expenses include marketing and business production expenses. bad debt expenses. plant and equipment based on statutorily prescribed rates. especially for elective or non-urgent procedures. operating expenses will increase correspondingly in absolute terms. Depreciation and Amortization: We expect a significant increase in our depreciation and amortization expenses due to the amortization of goodwill recognized with the Escorts hospitals acquisition and the IHL acquisition. As we expand our business. operating expenses will represent a higher percentage of a hospital’s total income until patient volumes reach targeted levels. especially doctors and nurses. Although a portion of the proceeds from the Issue will help finance repay a portion of our existing loans and certain pending future projects. fees we pay to outsource our diagnostic testing services. If the actual useful life of an asset is shorter than the statutorily prescribed useful life. housekeeping expenses and patient meals. restrictions under our existing debt agreements and other factors. We have made significant investments in medical equipment and we regularly upgrade our property. Conversely. personnel expenses will represent a higher percentage of income in respect of a newly acquired or opened owned hospital before it reaches maturity. plant and equipment. This ratio could change depending on market conditions. plant and machinery. we write down the full amount of the remaining value of such asset. These lower volumes result in lower inpatient and outpatient income during these periods. Much of the infrastructure for a hospital must be put in place when a hospital commences operations and many operating expenses are required to be incurred regardless of patient admission levels. general and administrative expenses. to a lesser degree. Like selling. as a result of both growth in our business and upward pressure on wages for healthcare professionals. we expect to incur additional indebtedness in the future to help finance our expansion plans. equipment leases. Financial Expenses: Financial expenses are primarily composed of interest paid on loans and also include other bank charges. We expect that these expenses will increase in the future. As a result of ramping up our staffing levels for doctors and. We expect selling. personnel expenses will represent a higher percentage of consolidated total income. Selling. other staff at new hospitals in anticipation of higher patient volumes in the future. This will decline as patient volumes and manpower utilization rates increase at a hospital.

As we are continuously expanding. Provisions are reviewed at each balance sheet date and adjusted to reflect the current management estimates. relationships with payors and procedure statistics. Allowance for Bad Debts We estimate our allowances for bad debts based on the historical trend of our hospitals’ cash collections and contractual write-offs. Set forth below is a summary of our most significant critical accounting policies under Indian GAAP. Critical Accounting Policies The discussion and analysis of our financial condition and results of operations is based upon the Financial Statements. but we expect day’s sales outstanding to increase as the number of patients covered by insurance or employer-provided benefits increases. The ultimate liability could. revenues and expenses and related disclosures of contingent assets and liabilities.patient volumes and thus inpatient and outpatient income are highest during the winter months. our day’s sales outstanding is generally quite low. the effects of seasonality may be difficult to ascertain from our financial statements. Provision for Contingencies We are subject to significant claims and legal proceedings. We estimate reserves for losses and related expenses for these contingencies based on a careful analysis of each individual issue. As our patients typically pay their bills in cash. provides healthcare insurance coverage for all veterans of the 325 . in turn. the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. be significantly impacted. which have been prepared in accordance with Indian GAAP. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Provisions are not discounted to the present value of a contingency and are determined based on management estimates of the amounts required to settle the obligation at each balance sheet date. The notes to the Financial Statements contain a summary of our significant accounting policies. 2005 31 15 2006 88 74 Our target for day’s sales outstanding related to inpatient and outpatient income ranges from 45 days to 60 days. the Ex-Servicemen Contributory Health Scheme (“ECHS”). accounts receivable agings. however. liabilities. established fee schedules. We are required to assess the likelihood of adverse judgments or outcomes to these matters and record reserves for claims when they are probable and reasonably estimable. Actual results may differ from these estimates under different assumptions or conditions. A government-run agency. exceed our estimates. EHIRCL’s litigation with the DDA and the Income Tax Authorities are the subject of qualifications in the auditors’ reports prepared by EHIRCL’s auditors due to the potentially high liability to which these cases expose EHIRCL. Any such adjustment could have a material adverse effect on our results of operations or financial position. The following table summarizes our day’s sales outstanding as of the dates indicated: 2004 Day’s sales outstanding Day’s sales outstanding (ex ECHS) 7 7 As of March 31. some or all of which may not be covered by our insurance policies or indemnification arrangements or which may exceed our insurance coverage or indemnification limits. The preparation of the Financial Statements may require us to make estimates and judgments that affect the reported amounts of assets. our results of operations may. While we believe that our allowances for bad debts are adequate. if the actual write-offs are significantly different from our estimates. We have made provision in our accounts for any liability arising out of EHIRCL’s litigation proceedings.

Typically. The operating systems generate reports that assist in the collection efforts by prioritizing patient accounts. a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associate with an asset’s use. This centralized department also serves as a tool to monitor ongoing compliance with our policies and procedures. we have improved and standardized our collection policies and procedures. our day’s sales outstanding is relatively high. Because we are required to bill ECHS directly and that agency has long payment review times that can run for six or more months. an accumulation of costs significantly in excess of the amount originally expected for an asset’s acquisition or construction. a significant adverse change in the operating performance of the asset. our day’s sales outstanding ranges from 15 days to 75 days. accounts will be outstanding a minimum of 120 days before being written-off. size of claim and estimated collection percentage for each patient account. the estimated future cash flows are discounted to their present value at the weighted average cost of capital. This review is supported by an analysis of the actual net income. 326 . and approximately 10% of our consolidated gross income is derived from patients covered by ECHS. including ECHS. For payments due from patients and other payors. After impairment. Asset Impairment We review the carrying amounts of our plant. to determine the appropriate provision for doubtful accounts. by hospital. depreciation is provided on the revised carrying amount of the asset over its remaining useful life. contractual adjustments and cash collections received. If our internal collection efforts are unsuccessful. In assessing value in use. The recoverable amount is the greater of the asset’s net selling price and value in use. as required. we manually review patient accounts with balances of Rs. our collection policies and procedures are based on the type of payor. a significant adverse change in the extent or manner in which the asset is being used or in its physical condition. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. technological obsolescence leading to earlier-than-planned redundancy of equipment. 10. In addition.000 or more. Management’s judgment is critical in assessing the following criteria for asset impairment: • • • • • • • a significant decrease in the asset’s market price. property and equipment at the end of each balance sheet period if there is any indication of impairment based on internal or external factors. including the age of the asset. Our day’s sales outstanding (ex ECHS) for the dates presented in the table above are within the target range except for fiscal 2006. Without payments due from ECHS. doctor and patient. Since that date. by payor. We then classify the accounts based on any external collection efforts we deem appropriate. The operating systems used to manage our patient accounts provide for an aging schedule in 30-day increments.armed forces. An account is written-off only after we have pursued collection with legal or collection agency assistance or otherwise deemed an account to be uncollectible. We review the standard aging schedule. and a current expectation that it is more likely than not that the asset will be sold or otherwise disposed of significantly before the end of the statutorily prescribed rate of useful life. written correspondence and the use of legal or collection agency assistance. Collection efforts include direct contact with patients or third-party payors. we have established a centralized receivables management services department to supplement the individual hospital collection efforts.

which dividend income is not subject to current income tax. These differences result in deferred tax assets and liabilities. Fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. In the future.000 are depreciated fully in the year of purchase. Unrecognized deferred tax assets of earlier years are reassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized. EHSSIL and EHSSHL. 2005 and 2004. such that minimum alternative tax applied. differences in treatment of certain statutory liabilities relating to employees and capital gains. EHRCL. In contrast. Fringe benefit taxes apply even when an entity has incurred net losses. Although on a consolidated basis. EHSSIL and EHSSHL. EHIRCL has a history of net profits. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. OBPL paid current taxes at an effective rate of 25.09%. these losses are concentrated at FHL. OBPL’s effective current tax rate reflected dividend income that exceeded profit before tax. We currently do not report our income tax liability on a consolidated basis. which are taxed at a rate lower than the normal corporate rate. Individual assets not exceeding Rs. In fiscal 2006.98% and 29. charging a statutorily prescribed fixed rate of depreciation (which differs from the statutorily prescribed rate under the straight line method) on the dealing balance each year. which results in lower depreciation rates after the first year. 2005 and 2004. EHIRCL and its subsidiaries use the written-down value or WDV method of depreciation on all fixed assets.39% for fiscal 2006.36% and 19. 8. we expect that our effective current tax rates will be decreased by any deferred tax assets relating to our prior tax losses. EHIRCL’s effective current tax rates were primarily affected by differences between accounting and tax depreciation rates. we are required to estimate our income taxes and this process requires us to estimate our actual current tax exposure and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. IHL and EHIRCL’s subsidiaries. EHIRCL paid current taxes at an effective rate of 33. EHRCL. Effective fiscal 2006. EHRCL. we do not pay income taxes at these entities.54%. EHSSIL and EHSSHL. As part of the process of preparing our financial statements. respectively. respectively. 30. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.05% for fiscal 2006. we have a history of substantial losses and expect to continue to incur losses in the future. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. and when we do realize profits. IHL and EHIRCL’s subsidiaries.Depreciation We depreciate our leasehold improvements. IHL and EHIRCL’s subsidiaries. deferred and fringe benefit taxes. we have become obligated to pay fringe benefit taxes in respect of certain perquisites offered to our employees and certain other business expenses. over the lease period. Deferred income tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. we may consider consolidating our corporate structure to take advantage of the deferred tax assets accumulated at FHL. including immovable fixtures in our owned hospitals located in leased premises. The amount of 327 . 5. We record a deferred tax asset when we believe that there is reasonable certainty that sufficient future taxable income will be available against which the deferred tax asset can be realized. Income Taxes Tax expense comprises current. Depreciation on all other fixed assets is provided using the straight line method and is based on statutorily prescribed rates. OBPL’s effective current tax rates in fiscal 2004 and 2005 were lower than the normal corporate rate due to accumulated losses in prior periods that offset taxable profits. As we have losses at FHL.

09% 27.42 218.34 196.69% 10.52 184.51 251.42% 31.17 4.00% (0. an adjustment to the deferred tax asset would be charged to income in the period such determination was made which would result in a reduction of our net income.41 35.65 102.93% (0.05% 1.02% 3.75 73.55 141.77 43.18 -5.17% 10.10 25.47)% 550.96% 18.68 67.67% 22.90 20. We have not recognized deferred tax assets on carried-forward losses or unabsorbed depreciation as it is not certain whether the Company will be able to take advantage of such losses and depreciation in the future.58)% 2004 .35 97.09% 15.19 (4.26% 100.31 12.96% 480.00% 36.35 44.69% 4. 2005 and 2004 in respect of FHL on a standalone basis.29 Other Income Total Income Materials Consumed Personnel Expenses Operating Expenses General and Administration Expenses Selling and Distribution Expenses Interest Expenses Depreciation/ 328 22.99% -1.52% 0.44 503.75% 2.25% 100. Results of Operations for Fortis Healthcare Limited on a Standalone Basis The following table sets forth certain profit and loss data in rupees and as a percentage of total income and certain operating data for the years ended March 31.62% (1.63% 9.53 999. 2006 2005 (Rupees in millions) Inpatient Income Outpatient Income Management Fees from Hospitals Pharmacy Income Less Discounts Net Operating Income 977.46% 1.29% 2.76% 23.28% 7.05 65. Restated Unconsolidated Summary Statements Year Ended March 31. In the event we are not able to realize the deferred tax assets.00% 34.the deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income during the carry forward period differ materially from current estimates.74 20.82 369.30% 7.13% 29.63)% 443.88 630.74 119.23 (14.74% 4. 2006.21% 6.09% 0.13 176.46% 100.34% 603.31 22.69 22.82 95.94) 88.36% 906.62% 6.13% 6.00% 35.21 53.21 95.00) 87.92 272.45% 25.55 16.84% 4.71) 90.04 (2.54 26.77 149.59 78.91 62.69 0.54% 4.64% 13.

41) 132.55 million in fiscal 2006. a slight increase in outpatient registrations at Fortis Hospital. as well as an increase in prices charged for various procedures.36)% -(32.82 million in fiscal 2006.15% (27. Pharmacy Income: Pharmacy income increased by 33% from Rs. Mohali as a result of higher patient volumes at that hospital. 329 . 630.78) 2.05)% -(13.75% (12.Amortization Total Expenditure Loss before tax Fringe tax benefit Loss before prior period and exceptional items Exceptional item Prior period items Net Loss Adjustments for restatement Net Loss.80 (80.35 million in fiscal 2005 to Rs.29) (83. 65.19 million in fiscal 2005 to Rs.71) 127.51) 2. Amritsar. 2005 Income FHL’s total income increased by 58.94 (162.41)% Fiscal Year Ended March 31. Outpatient Income: Outpatient income increased by 46% from Rs.69 million in fiscal 2005 to Rs. 999.47% (13. as restated 1. 906.36)% 21.61) (57. 550. Mohali.36) (0.20 (277.98 (83. Amritsar. Pharmacy income also increased slightly at Fortis Hospital. Inpatient Income: Inpatient income increased by 65% from Rs. partially offset by the discontinuation of FHL’s O&M arrangement with Nayyar Hospital.95)% 0.31 million in fiscal 2005 to Rs.60 (275. including consultations.05 million in fiscal 2006.32)% (11.42 million in fiscal 2005 to Rs.01 -(55.36% (32.58)% 0. 16.27% -(11.38) -2.67)% 710.09)% (0. FHL did not earn any fees under its O&M contract for Fortis Jessa Ram Hospital in either period.53 (279.80 (276.60% from Rs. 2006 Compared to Fiscal Year Ended March 31. This increase was primarily due to an increase in inpatient admissions and procedures at Fortis Hospital. to a lesser extent.22% (27.17 million in fiscal 2006. Management Fees from Hospitals: Hospital management fees from O&M contracts increased by 1.28% (27.275.75)% -0.367% from Rs.58% (27.75)% -(12.80) (1.80)% -0.98) -1. Mohali and.81) 107.27)% 665.38) -(80. 4. 12.65) 112. investigations and minor procedures at Fortis Hospital. partially offset by a slight decrease in admissions at Fortis Hospital.81) -(162. Amritsar due to a study leave of absence of one of FHL’s principal doctors at that hospital. both of which were entered into during fiscal 2006. 0. This increase was primarily due to fees earned under FHL’s new O&M contracts for Jeewan Mala Hospital and Fortis La Femme. 44.23 million in fiscal 2006.22)% (0. This increase was primarily due to an increase in outpatient registrations. This increase was primarily due to an increase in retail sales volumes at FHL’s pharmacy at Fortis Hospital.

46% from Rs. Amritsar and a change in procedure mix.54% from Rs.S. Mohali and at its corporate office as FHL increased its expansion efforts. This increase was primarily due to the overall growth in FHL’s business during fiscal 2006. General and administration expenses as a percentage of total income increased from 6. Materials Consumed: Materials consumed increased by 69.80 million in fiscal 2005 to Rs. 102.10 million in fiscal 2005 to Rs. 14. Expenditure FHL’s total expenditure increased by 79.Discounts: Discounts on healthcare services given to patients on an individual basis increased by 268% from Rs. 710. Operating Expenses: Operating expenses increased by 27. to a lesser extent. interest from short-term investments made with surplus funds and miscellaneous income. 369. This increase was primarily due to an increase in consumables during the period in response to higher patient volumes at Fortis Hospital. Mohali and. Other Income: Other income decreased by 16. losses related to exchange rate fluctuations in connection with a U. Mohali. 184. This increase was primarily due to increases in salaries and wages and related benefits as FHL increased its headcount from 637 in fiscal 2005 to 1. and personnel expenses as a percentage of total income decreased from 22.18% from Rs.88 million in fiscal 2005 to Rs. This was partially offset by an increase in inventories at the end of fiscal 2006.08% from Rs. compared to 127.00 million in fiscal 2005 to Rs.89% from Rs.75% from Rs. which are directly reflected in the inpatient income and outpatient income amounts.21% in fiscal 2005 to 25. Materials consumed as a percentage of total income increased from 34. FHL’s personnel expenses also increased as a result of several doctors shifting from being compensated on a retainer basis to becoming FHL’s employees. FHL’s manpower utilization rates improved and the increase in patient volumes in fiscal 2006 did not require a proportionate increase in staffing at its hospitals. General and Administration Expenses: General and administration expenses increased by 138. Fortis Hospital.53 million in fiscal 2006.42% in fiscal 2005 to 18. 251.51 million in fiscal 2006.90 million in fiscal 2006.84% in fiscal 2005 to 10.60 million in fiscal 2006. 4.52 million in fiscal 2006. with consumablesintensive procedures.45% in fiscal 2006.17% in fiscal 2006 due to improved operating efficiencies and higher utilization of FHL’s existing infrastructure.71 million in fiscal 2006. as well as an increase in outsourcing fees for consulting and professional fees to doctors as a result of higher patient volumes and the ramping up of operations in anticipation of higher patient volumes in future periods. on-site vendors and. Operating expenses as a percentage of total income decreased from 31. 196.275. partially offset by increases in income from the Fortis Inn rehabilitation center at Fortis Hospital. 1. Discounts do not include discounts under arrangements with employers and insurance companies.77 million in fiscal 2005 to Rs.34 million in fiscal 2005 to Rs. rental income from third-party.S. 26.29% in fiscal 2006 due. This decrease was primarily due to a decline in foreign exchange gains recognized in fiscal 2005 in connection with a U.65 million in fiscal 2006. As a benefit of ramping up its operations in earlier periods in anticipation of higher patient volumes. 141. dollar-denominated loan and an increase in the provision for bad debt as a result of growth in the business at Fortis Hospital.019 in fiscal 2006 in response to higher patient volumes at Fortis Hospital. in part. This increase was primarily due to the overall growth in FHL’s business during fiscal 2006.96% in fiscal 2006 due to changes in procedure mix and higher prices for materials. 330 .67% in fiscal 2005 to 36. 22. FHL increased the remuneration for its existing employees. In addition.58% of total income in fiscal 2006.75% of total income in fiscal 2005. such as joint replacements and various cardiac procedures. and in particular. to a lesser extent. dollar-denominated loan. This increase was primarily due to an increase in patient volumes. 218. the Escorts hospitals acquisition and the IHL acquisition. 43. representing a higher proportion of FHL’s total procedure count. Personnel Expenses: Personnel expenses increased by 30. and represented 112. Mohali.55 million in fiscal 2005 to Rs.

increased from Rs. This decrease was primarily due to a withdrawal of certain business promotion schemes with respect to Fortis Hospital. books and periodicals etc.30% from Rs.34% in fiscal 2006. Fringe Benefit Tax With effect from the beginning of fiscal 2006.96% in fiscal 2005 to 7. among other things. 2. meetings and seminars. 2004 331 . Following the restatement of FHL’s financial statements to adjust for. staff welfare expenses. 276. (20% of the value of which was taxed) and gifts and festival celebrations (50% of the value of which was taxed). As a benefit ramping up FHL’s operations in earlier periods in anticipation of higher patient volumes. 1. prior period items and the provision for bad debts to reflect the year to which these pertained. losses related to exchange rate fluctuations and provisions for bad debt. 20% or 50% of the expense is taxed at the corporate tax rate.78% from Rs. the increases in patient volumes and income in fiscal 2006 did not require a proportionate increase in equipment purchases and depreciation and amortization as a percentage of total income decreased from 9.66% from Rs.to FHL’s continued focus on expanding its network.36 million in fiscal 2005 to Rs.02% in fiscal 2005 to 2. This increase was primarily due to the acquisition of new medical equipment and IT hardware in response to the growth in FHL’s business. 2.47% in fiscal 2005 to 0. running maintenance and depreciation on vehicles. In fiscal 2006.81 million in fiscal 2005 to Rs. 25. 2005 Compared to Fiscal Year Ended March 31.63% in fiscal 2005 to 27. Inc.35 million in fiscal 2006. This change was primarily due to the increase in financial expenses associated with the Escorts hospitals acquisition. 62. FHL paid Rs. the IHL acquisition and FHL’s other expansion projects during fiscal 2006. medical expenses reimbursement to the extent taxexempt for employees.15% in fiscal 2006. Interest Expenses: Interest expenses increased by 1. 279. Fiscal Year Ended March 31.53% from Rs.98 million in fiscal 2005 to Rs.75 million in fiscal 2006 and increased as a percentage of total income from 3. as restated. 20.09% in fiscal 2006.53 million in fiscal 2006 and decreased as a percentage of total income from 0.65 million in fiscal 2005 to Rs. 83.92 million in fiscal 2006 and decreased as a percentage of total income from 4.28% in fiscal 2006. FHL’s net loss.91 million in fiscal 2005 to Rs. an additional tax on certain perquisites offered to FHL’s employees and certain other business expenses has been imposed by the Central Government. 272. medical allowance. due primarily to traveling and conveyance.090. Mohali and the restructuring of FHL’s scientific association with Partners Healthcare Systems. telephone expenses. medical insurance expenses.70 million in fiscal 2006. Selling and Distribution Expenses: Selling and distribution expenses decreased by 17. Net Loss Net loss increased by 235. This decrease was primarily due to professional charges to doctors and bonus payments made during fiscal 2005 in respect of services performed in fiscal 2004. 73. 83.34% from Rs. 22.51 million in fiscal 2006.2 million in fringe benefit taxes. Depreciation and Amortization Depreciation and amortization increased by 16. partially offset by increases in prior period materials consumed and discounts on sales. Depending on the nature of the perquisite/business expense. Prior Period Items Prior period items decreased by 48.31 million in fiscal 2005 to Rs. This increase was primarily due to the increase in FHL’s short-term borrowings during fiscal 2006 to finance the Escorts hospitals acquisition and the IHL acquisition.

88 million in fiscal 2005. Expenditure FHL’s total expenditure increased by 6.75% of total income in fiscal 2005.35 million in fiscal 2005. orthopedics.36% of total income in fiscal 2004. Pharmacy Income: Pharmacy income increased by 142% from Rs. Outpatient Income: Outpatient income increased by 27% from Rs. oncology. This increase was primarily due to an increase in patient volumes. Amritsar as a result of the merger of Fortis Medical Centre Holdings Limited with FHL with effect from the beginning of fiscal 2005 (the “FMCHL Merger”). 26. 176. Inpatient Income: Inpatient income increased by 24% from Rs.94 million in fiscal 2004 to Rs.Income FHL’s total income increased by 25. reflecting an improvement in utilization and 332 . 12. Discounts do not include discounts under arrangements with employers and insurance companies.42 million in fiscal 2005. Materials Consumed: Materials consumed increased by 23.18 million in fiscal 2004 to Rs. Mohali and Fortis Hospital. This increase was primarily due to an increase in outpatient registrations.79% from Rs. 5.55 million in fiscal 2005. 550.41 million in fiscal 2004 to Rs. 2. Amritsar. The fees in fiscal 2005 represented fees earned under an O&M contract for Nayyar Hospital Amritsar. including consultations. FHL’s results of operations for fiscal 2005 include the results of Fortis Hospital. This increase was primarily due to an increase in consumption during the period in response to higher patient volumes at Fortis Hospital. Mohali and the impact of the operations of Fortis Hospital.31 million in fiscal 2005.30% from Rs.13% in fiscal 2004 to 34. dollar-denominated loan.80 million in fiscal 2005.S. which are directly reflected in the inpatient income and outpatient income amounts.74% from Rs. following the FMCHL Merger with effect from the beginning of fiscal 2005.77 million in fiscal 2004 to Rs. Mohali and the impact of the operations of Fortis Hospital. 22. FHL’s O&M contract for Fortis Jessa Ram Hospital commenced in the second half of fiscal 2004. gastroenterology and cosmetic surgery at Fortis Hospital. inves