INDRAPRASTHA MEDICAL CORPORATION LIMITED

Indraprastha Medical Corporation LimitedRegistered office & Hospital Complex

Sarita Vihar, Delhi - Mathura Road, New Delhi - 110076 (India)

Visit us at : www.apollohospdelhi.com

Dear Shareholders,

Tomorrow belongs to the people who prepare for it today. The dreams of your past can be apretty accurate prediction for the reality of your future. At Apollo, we believe in creating our owndestiny. With the resources and skills which are at our disposal, Apollo group has alwaysbelieved in dreaming big and being at the crux of change. We now take bold strides towardsa future that is full of promise, the promise of greater things to come in a relentless pursuit forexcellence.

Today, Indian healthcare is in a position to become the largest employer in the foreseeablefuture. With every hospital bed added, direct employment for five people and indirectemployment for twenty-five is created. This generation of employment would help the nationgrow in a way that would be the envy of every nation around the world.

The total healthcare market in India is growing significantly and its contribution to the country’sGDP will increase from the present 6 per cent to 8.5 per cent over the next ten years.

Apollo Hospitals were pioneers in providing high-quality medical care to Indians through state-of-the-art equipment backed by the best-trained doctors and nurses that India could boast of.It was born from my mission to provide quality care to India without having to seek it fromabroad. We’ve come a long way since then. During the year 2007-08, over two lakh patientsin Indraprastha Apollo Hospitals were attracted by the quality of care.

MessageDr. Prathap C. Reddy,

Founder - Apollo Hospitals Group

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Indraprastha Apollo Hospitals has thus set a fine example in the field of Indian healthcarenot only in public-private partnership but also as first Indian hospital to be awarded the JointCommission International (JCI) accreditation.

Growth of healthcare has to go hand in hand with quality initiatives, very few hospitals areaccredited by JCI (Joint Commission International), a subsidiary of JCAHO - the InternationalGold Standard for quality in healthcare. But I’m proud that of the 10 hospitals accredited byJCI in the SAARC region so far, five hospitals are from the Apollo Group.

In this age of Information Technology, which is changing the nature of healthcare, Apollo hasembedded IT into the very core of its functioning. Soon, the new Hospital information Systems(HIS) and Digital Record Systems will help provide our clinicians with real-time access topatient information, as well as complete longitudinal record of care.

Telemedicine, which was pioneered by Apollo Hospitals in the last decade, is one of the mostsignificant innovations of our times.

While the Indian healthcare sector is poised at the brink of an exciting healthcare revolution,Apollo stands poised at the brink of equally compelling and developing opportunities.

One such opportunity is Medical Tourism and India has witnessed an enormous growth, in thissector opening a world of opportunities for medical and ancillary services and a tremendousboost in infrastructure for the private and voluntary sector.

Leading the race in attracting medical tourists to India is Apollo Hospitals, the healthcarepowerhouse of India. Seeking essential healthcare services, medical tourists from across theworld arrive here. Apollo Hospitals renders superlative services along the International PatientCare model, and has therefore carved a niche in the Health Tourism sector.

In our enduring role as a socially responsible organization, we continue to do exemplary workwith our active SACH campaign. Its success can be attributed to the confidence of each andevery employee of Apollo hospitals and the trust rendered by stakeholders like you.

It is the successes of such endeavors that make the Apollo dream a reality, so the day we seehealthcare as the catalyst, propelling India from a developing to a developed country is notfar off. It could well be tomorrow.

As O S Marsdew said, “there is no medicine like hope, no invention so great and no tonicso powerful”.

Dr. Prathap C. Reddy

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Chairman : Mr. Rakesh Mehta

Vice Chairman : Dr. Prathap C. Reddy

Directors : Dr. B. Venkataraman

Ms. Renu S. Karnad

Mr. Satnam Arora

Ms. Suneeta Reddy

Lt. Gen. (R) Vijay LallPVSM, AVSM, ADC

Mr. Vivek Rae

Mr. V.R. Reddy

Mr. V.V. Bhat

Vice President CumCompany Secretary : Mr. Ajay Kumar Singhal

Registered Office &Hospital Complex : Sarita Vihar,

Delhi-Mathura Road,New Delhi – 110076

Hospital at Noida : Apollo Hospitals,E-2, Sector-26Noida - 201301

Auditors : M/s. S.C. Vasudeva & Co.Chartered AccountantsNew Delhi

Bankers : Oriental Bank of CommerceAXIS Bank Limited

Place : New DelhiDate : 25th July, 2008

Board of Directors

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CONTENTS

Notice ...................................................................... 02

Directors' Report ..................................................... 06

Management Discussion and ................................. 12Analysis Report

Report on Corporate Governance .......................... 17

Auditors' Report ...................................................... 25

Balance Sheet ......................................................... 28

Profit & Loss Account ............................................. 29

Cash Flow Statement .............................................. 30

Schedules ............................................................... 31

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Indraprastha Medical Corporation Limited

Notice is hereby given that the Twentieth AnnualGeneral Meeting of Indraprastha MedicalCorporation Limited will be held on Wednesday,10th September, 2008 at 11.00 a.m. at FICCIGolden Jubilee Auditorium, Federation House,Tansen Marg, New Delhi – 110001, to transact thefollowing business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the AuditedBalance Sheet as at 31st March, 2008 and theProfit & Loss Account for the year ended on thatdate together with the Report of Directors’ andAuditors’ thereon.

2. To declare dividend on shares.

3. To elect a Director in place of Lt. Gen. (R) VijayLall who retires by rotation and being eligible,offers himself for re-election.

4. To elect a Director in place of Mr. Satnam Arorawho retires by rotation and being eligible, offershimself for re-election.

5. To consider and, if thought fit, to pass, with orwithout modifications, the following resolutionas “ Special Resolution”:

“RESOLVED THAT pursuant to the provisionsof Section 224A and other applicableprovisions, if any, of the Companies Act, 1956,M/s. S. C. Vasudeva & Co., CharteredAccountants, be and is hereby appointed asAuditors of the Company to hold office from theconclusion of this Annual General Meeting ofthe Company until the conclusion of the nextAnnual General Meeting of the Company at aremuneration of Rs. 8.00 lacs plus out of pocketexpenses.”

SPECIAL BUSINESS

6. To consider and if thought fit, to pass with orwithout modification, the following as an OrdinaryResolution:

“RESOLVED THAT Mr. Rakesh Mehta be and ishereby appointed as Director of the Company,who shall be liable to retire by rotation.”

NOTICE7. To consider and if thought fit, to pass with or

without modification, the following as an OrdinaryResolution:

“RESOLVED THAT Mr. Vivek Rae be and ishereby appointed as Director of the Company,who shall be liable to retire by rotation.”

By order of the Board

for Indraprastha Medical Corporation Limited

Ajay Kumar SinghalPlace: New Delhi Vice President cumDate: 9th June, 2008 Company Secretary

NOTES:

1. A member entitled to attend and vote at themeeting is entitled to appoint a Proxy to attendand vote at the meeting instead of himself andthe Proxy need not be a Member of the Company.The instrument appointing proxy, in order to beeffective, must be deposited at the RegisteredOffice of the Company at least 48 hours beforethe commencement of the meeting.

2. The relevant Explanatory Statement pursuant toSection 173 (2) of the Companies Act, 1956,relating to the Special Business to be transactedat the meeting, is annexed hereto.

3. The Register of Members and Share TransferBooks of the Company shall remain closed fromSaturday, 30th August, 2008 to Wednesday,10th September, 2008 (both days inclusive).

4. Dividend, if declared, will be paid to thosemembers whose names appear :-

a) as Members on the Register of Membersof the Company as on 10th September,2008, after giving effect to all valid sharetransfers in physical form lodged with theCompany up to the closing hours ofbusiness on 29th August, 2008, and

b) as Beneficial owners as per the Statementof Beneficial Ownership to be furnished byNational Securities Depository Limited(NSDL) and Central Depository Services(India) Limited (CDSL) in respect of theshares held in dematerialized form as at theclosing hours of business on 29th August,2008.

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5. Securities & Exchange Board of India (SEBI)has made trading in the shares of the Companycompulsory in dematerialized form for allinvestors. Members are requested to open anaccount with a Depository participant, if notdone so far and dematerialize theirshareholding to avoid inconvenience in future.

6. To avoid the incidence of fraudulentencashment of the Dividend warrants,Members, holding shares in physical form, arerequested to intimate the Company under thesignature of the Sole/First Joint holder, thefollowing information, so that the Bank AccountNumber and Name and Address of the Bankcan be printed on the Dividend Warrant:-

a) Name of Sole/ First Joint Holder and FolioNo.

b) Particulars of Bank Account, viz.

i) Name of the Bank

ii) Name of Branch

iii) Complete address of the Bank with PinCode Number

iv) Account Type, whether savings (SB) orCurrent Account (CA)

v) Bank Account Number allotted by theBank.

7. Shareholders desirous of availing the facilitiesof Electronic Credit of Dividend are requestedto submit ECS form duly filled in. ECS formcan be obtained from the Registered Office ofthe Company.

8. Members who hold shares in the dematerializedform, want to change / correct the bank accountdetails should send the same immediately tothe concerned Depository Participant. TheCompany will not entertain any direct requestfrom members for deletion/change in the BankAccount details furnished by DepositoryParticipants to the Company.

9. Non- Resident Shareholders are requested toinform immediately:-

a) The change in the residential status onreturn to India for permanent settlement and

b) The particulars of NRE Account with a Bankin India, if not furnished earlier.

10. Pursuant to the provisions of Section 205A(5)and 205C of the Companies Act, 1956, theCompany has transferred the unpaid orunclaimed dividend for the financial year2000-01 to the Investor Education andProtection Fund (IEP Fund) of the CentralGovernment.

Dividends for the financial year ended31st March, 2002 and thereafter, which remainunpaid or unclaimed for a period of seven yearsfrom the date of its transfer to the UnpaidDividend Account of the Company will betransferred to the IEP Fund of the CentralGovernment. No claim shall lie from a Memberagainst the Company or the said Fund oncethe transfer is made to the said Fund and nopayment shall be made in respect of any suchclaims. Therefore, members who have notencashed their dividend warrant(s) so far forthe financial year ended 31st March, 2002 orany subsequent financial year(s), are requestedto make their claim to the SecretarialDepartment, Sarita Vihar, Delhi-Mathura Road,New Delhi – 110 076, before such transfer tothe said Fund, in their own interest.

11. In terms of Section 109(A) the Companies Act,1956, a Shareholder of the Company maynominate a person to whom the shares held byhim/her shall vest in the event of his/her death.In case, any member wishes to avail thenomination facility in respect of shares held byhim/her, please write to the Company to obtainthe nomination form.

12. Members holding shares in physical form arerequested to notify immediately the change intheir address, if any, to M/s. Intime SpectrumRegistry Ltd., A-40, 2nd Floor, Near BatraBanquet Hall, Naraina Ind. Area, Phase – II,New Delhi – 110 028.

13. Shareholders seeking any information withregard to accounts are requested to write tothe Company at least seven days in advanceso as to enable the Company to keep theinformation ready.

14. Members are requested to bring their copy ofAnnual Report and Attendance Slip duly filledat the meeting.

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Indraprastha Medical Corporation Limited

INFORMATION REQUIRED TO BE FURNISHEDIN PURSUANCE OF CLAUSE 49 OF THE LISTINGAGREEMENT WITH STOCK EXCHANGES

The particulars of the Directors who are proposedto be appointed / reappointed are as given below:

1. Name : Lt. Gen. (R) Vijay Lall, PVSM,AVSM, ADC

Age : 66 years

Qualifications : MBA, FBIM (UK), AIM; EC (USA),Distinguished F Inst D, MIBM,Distinguished FIIMM

Expertise : Lt. Gen. (R) Vijay Lall, PVSM, AVSM,ADC, had served the Indian Army for forty years,in various vital assignments and retired as DirectorGeneral Ordnance Services & Senior ColonelCommandant AOC. He had over one hundredindependent establishments all over the country,employing approx. a lakh of civilian and militarypersonnel and handling a budget of ten thousandcrores. His vast and multidimensional experiencein logistics, supply chain management, academicadministration, and human resource management;particularly of civilians, education and training wonhim many laurels. In his early years, he had theunique honour of heading an independent foreigndefence organization, abroad.

As President (Mayor) of a very large cantonment,he made valuable contribution towards improving,the administrative responsiveness, quality of life aswell as civic amenities for the citizens. This wasapplauded by the media and the Govt. As headof the College of Materials Management (whichimparts integrated management education toselected Foreign and Indian Students) & Dean ofManagement, Jabalpur University, he dedicatedlypersevered and got the institution ‘Golden PeacockNational Training Award’ besides the recognition,as a ‘Center of Excellence’. He was speciallyselected on a number of governmental studies andresearch for streamlining logistics, human resourceand supply chain management; which lead to asaving of over one hundred crores to thegovernment exchequer, besides, improving theefficiency all round.

He was decorated/conferred with numeroushonours & awards, Hon. ADC to President of India,PVSM [Param Vishisht Seva Medal (forDistinguished Services of Most ExceptionalOrder)], AVSM (Ati Vishisht Seva Medal) {for

Distinguished Services of Exceptional Order}, bythe President of India, Commendation of the Chiefof Army Staff; Distinguished Fellowship of theInstitute of Directors, (World Quality Council) as wellas the Indian Institute of Materials Management.He was declared ‘Man of the Year 2000’: by ABI,USA. His accomplishment got published in thebooks — “Asia Pacific Who’s Who”, BiographyInternational, Asian – American Who’s Who, as wellas Distinguished and Admirable Achievers. TheGeneral is an ‘Honorary Advisor’ to the IndianInstitute of Materials Management, besides; is aFellow of the British Institute of Management and isalso on the Executive Council of the AmericanInstitute of Management. Is a life member of Instituteof Defence Studies and Analysis (India) andChinmaya Centre of World Understanding.

Outside Directorship : None

Membership of Committees of the Board ofother Companies : None

Shareholding in the Company : Nil

2. Name : Mr. Satnam Arora

Age : 59 years

Qualifications : Masters in Economics

Expertise : Mr. Satnam Arora has rich and variedexperience in managing business in variousindustries. He is the Joint Managing Director ofM/s. Kohinoor Foods Limited which is a 500 croresturnover food company with world famous“Kohinoor” brand of basmati rice. This brand ofbasmati rice is available in about 60 countriesaround the world and also has the dominance inthe Indian market. He has extensively travelledaround the globe and have been instrumental insetting up various operations of the Companyoverseas.

Outside Directorship:

Kohinoor Foods Ltd .Satnam Haegens Ltd.Sachdeva Brothers Ltd.Sara Textiles Ltd.

Membership of Committees of the

Board of other Companies :

Share Transfer Committee (Kohinoor Foods Ltd.) -Member

Shareholding in the Company : Nil

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3. Name : Mr. Rakesh Mehta

Age : 57 years

Qualifications : IAS

Expertise : Mr. Rakesh Mehta is a member of theIndian Administrative Service. He has extensiveexperience in public administration, having heldseveral senior posts in the State Government andin the Government of India and also foreignassignment during 33 years of service and ispresently posted as Chief Secretary, Governmentof NCT of Delhi.

Outside Directorship :

BSES Rajdhani Power Ltd.BSES Yamuna Power Ltd.North Delhi Power Ltd.Delhi TRANSCO Ltd.Delhi Power Co. Ltd.Indraprastha Power Generation Co. Ltd.Pragati Power Corpn. Ltd.Delhi Metro Rail Corpn. Ltd.Delhi Integrated Model Transit System

Membership of Committees of the Board of otherCompanies : None

Shareholding in the Company : Nil

4. Name : Mr. Vivek Rae

Age : 54 years

Qualifications : IAS

Expertise : Mr. Vivek Rae is a member of the IndianAdministrative Service. He has extensiveexperience in public administration, having heldseveral senior posts both in the State Governmentand in the Government of India. Presently he isposted as Principal Secretary – Health & FamilyWelfare, Government of NCT of Delhi.

Outside Directorship :

BSES Yamuna Power Ltd.BSES Rajdhani Power Ltd.

Membership of Committees of the Board of otherCompanies :

Audit Committee (BSES Yamuna Power Ltd.) –Member

Audit Committee (BSES Rajdhani Power Ltd.) –Member

Shareholding in the Company : Nil

EXPLANATORY STATEMENT PURSUANT TOSECTION 173(2) OF THE COMPANIES ACT, 1956

ITEM NO. 6

Mr. Ramesh Narayanaswami, Director andChairman of the Board of Directors hadsuperannuated from the office of Chief Secretary,Govt. of NCT of Delhi and ceased to be a Directorof the Company. In his place, the Board appointedMr. Rakesh Mehta, Chief Secretary, Govt. of NCTof Delhi as an Additional Director and Chairman ofthe Board of Directors on 29th January, 2008.Pursuant to Section 260 of the Companies Act,1956, Mr. Rakesh Mehta holds office only up to theAnnual General Meeting. As required under Section257 of the said Act, notice has been received froma member alongwith requisite deposit signifying hisintention to propose Mr. Rakesh Mehta as acandidate for the office of Director.

Except Mr. Rakesh Mehta, no other Director isinterested in the aforesaid resolution.

ITEM NO. 7

Mr. D. S. Negi, Director of the Company hadsuperannuated from the office of PrincipalSecretary, Health & Family Welfare, Govt. of NCTof Delhi and ceased to be a Director of theCompany. In his place, the Board appointedMr. Vivek Rae, Principal Secretary, Health & FamilyWelfare, Govt. of NCT of Delhi as an AdditionalDirector on 12th October, 2007. Pursuant to Section260 of the Companies Act, 1956, Mr. Vivek Raeholds office only up to the Annual General Meeting.As required under Section 257 of the said Act,notice has been received from a member alongwithrequisite deposit signifying his intention to proposeMr. Vivek Rae as a candidate for the office ofDirector.

Except Mr. Vivek Rae, no other Director is interestedin the aforesaid resolution.

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Indraprastha Medical Corporation Limited

The Directors take pleasure in presenting the20th Annual Report of the Company along with theaudited accounts for the year ended 31st March,2008.

FINANCIAL RESULTS(Rs. in Lakhs)

Particulars Year ended Year ended31-03-2008 31-03-2007

Income from Operations 31,470.73 23,271.35

Other Income 2,756.46 2,103.76

Total Expenditure

Consumption of stores & spares 9,482.21 6,690.90

Staff Cost 6,366.66 4,591.91

Consultation Fees paid to the Doctors 8,643.26 6,225.38

Other expenditure 4,908.08 3,876.53

Interest 627.51 509.49

Depreciation 1,617.11 1,183.73

Profit before tax 2,582.36 2,297.17

Provision for taxation 967.58 824.83

Net Profit (PAT) 1,614.78 1,472.34

Balance brought forward

from previous year 2,019.61 1,994.71

Amount available for appropriation 3,634.39 3,467.05

Adjustment of Employees benefits

as per Accounting Standard 15

(Revised) - 56.78

Appropriations

Transferred to General Reserve 100.00 50.00

Dividend (Proposed) 1,283.42 1,145.91

Corporate Dividend Tax 218.12 194.75

Balance carried to Balance Sheet 2,032.85 2,019.61

DIVIDEND

The Directors are pleased to recommend paymentof dividend on equity shares @14 per cent (Rs. 1.40per share) for the financial year ended 31st March,2008 (previous year Rs. 1.25 per share).

OPERATIONS

During the year under review, the total income ofthe Company increased to Rs 342.27 crore fromRs. 253.75 crore in the previous year – an increaseof 35 per cent. The profit after tax stood at Rs. 16.15crore against Rs. 14.72 crore in the previous year –a growth of about 10 per cent.

DIRECTORS' REPORT

Dear Shareholders

The operational performance details ofIndraprastha Apollo Hospitals, New Delhi are asunder:-

2007-08 2006-07 Growth(Decline)

No. of In-patient Admissions 32898 30367 8.33%

Average daily bed occupancy 466 408 14.22%

Total no. of outpatients 83003 71473 16.13% (New Registration)

Health Check up 23207 19356 19.90%

Dialysis 18886 20197 (6.49%)*

Cardiac Surgeries 2180 709 207.48%

Transplant Surgeries 187 99 88.89%

Other Surgeries 12093 11354 6.51%

No. of International Patients 3239 1949 66.19%

* Fall in dialysis numbers is following a conscious shift of patientsto the Noida Hospital.

HIGHLIGHTS OF THE YEAR 2007-08

The year saw significant growth in the volume ofpatients at the Indraprastha Apollo Hospitals. Thenumber of cardiac surgeries has almost tripled. Thedepartments of Neurosurgery, Transplant Surgeryand Emergency Services too recorded significantgrowth in volume of patients.

To accommodate the surging patient volumes,improve efficiencies in the system and meetcompetition from new hospitals, the Hospitalundertook major upgradation and modernizationefforts. The aging OPD wing was revamped andnow wears a contemporary, better planned look.The upgraded department now consists of 22 suitesspread over five floors with improved aesthetics andfacilities that will increase the comfort of waitingpatients.

The patient rooms in the Hospital had not beenrenovated since commissioning. In order to improveaesthetics and maximize patient comfort,upgradation and renovation of the rooms has beencommenced during the year.

At the 57-bed Indraprastha Apollo Hospitals inNoida too, modifications were undertaken toreposition the Hospital as a family Hospital withsuperior mother and child care facilities.Empanelment with CGHS, ONGC and GAIL wereobtained, which should serve to attract more

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patients to the Hospital. Although only in its secondyear of operation, the Noida Hospital did creditablywell financially and hopes to turn profitable duringthe financial year 2008-09.

Marketing initiatives to attract more internationalpatients were strengthened further. An agreementwas signed between your Hospital and the IraqiHealth Ministry for treating high-end tertiary carepatients and for training doctors. As part of thisagreement, more than 100 high end tertiary carepatients from Iraq were treated at the Hospital whileanother 100 underwent Cochlear implants. In all,330 patients from Iraq were treated within a year –mostly in areas of Cardiology (Paediatric and Adult),ENT (Cochlear Implant), Orthopedics,Neurosurgery and Oncology.

At Indraprastha Apollo Hospitals, the endeavourhas always been to promote wellness and focuson prevention. The sooner you detect anyirregularity in your system, the better is themanagement and outcome of treatment. PreventiveHealth Checkups were pioneered by the Apollogroup and have created a satisfied customer baseover decades. Apollo Health Checks are allinclusive health screening programmes that offerthe convenience of all tests under one roof. Thereach of these popular screening programmes isnow being extended through interventions like theApollo Healthy Heart Club, whose aim is to checkthe spread of heart diseases in the country.Prevention of heart disease would be possible byhaving an annual preventive heart checkup, at avery nominal price which will help in earlymanagement of the disease. A series of educationalprogrammes will also be organized by a team ofspecialists from Apollo Hospitals to createawareness among the public at large.

You will be glad to note that Indraprastha ApolloHospitals has been selected for a significant andprestigious new assignment. The Delhi InternationalAirport (Private) Limited has selected your Hospitalto operate and manage medical and healthcarefacilities at all passenger and cargo terminals ofthe Indira Gandhi International Airport. A four bedmedical centre with basic first aid, stabilizingfacilities and modern automatic machines will comeup at both the domestic and international terminals.A casualty evacuation centre and a 24-hourpharmacy will also be set up at the domestic arrivalterminal. Three advanced life-saving ambulancesfor mobility on the airside and city side willbe available with paramedics round the clock atthe airport.

FOCUS ON QUALITY

In 2005, Indraprastha Apollo Hospitals, New Delhibecame the first Hospital in India to be accreditedby the Joint Commission International (JCI), USAthe largest accreditor of health care organizations.As per JCI requirements, every three years thefacility is surveyed again for re-accreditation andthe process will be done at your Hospital in July2008.

In July 2007, JCI revised its accreditation manualon the standards of care to be provided by all JCIaccredited Hospitals around the world. The revisedstandards relating to Quality Improvement andPatient Safety came into force with effect from1 Jan 2008.

Your Hospital began focused preparations for there-accreditation from October 2007 itself. AllHospital policies were reviewed. Quality indicatorsfor all departments were also reviewed keeping inmind the new JCI standards. The reviewed policieswere disseminated to all concerned departmentalheads and alterations have been made wherenecessary.

TRAINING PROGRAMMES

Constant updating and intensive reviews of newprocedures is critical in the medical profession inorder to improve prevention, diagnosis andmanagement of diseases. Indraprastha ApolloHospitals organized a broad spectrum ofContinuous Medical Education activities addressinga variety of medical topics during the year endedMarch 2008.

The Hospital held around 1200 Continuous MedicalEducation (CME) programmes and severalworkshops, updates and symposia whichcomprehensively tackled all the new advances andnew trends in medicine.

Advanced Cardiovascular Life Support (ACLS)classes were organized for doctors and nurses. Inaddition, doctors and nurses also attended aPediatric Advanced Life Support (PALS) andNeonatal Life Support (NALS) course.

To familiarize the hospital staff with JCIrequirements, training classes were held by certifiedJCI trainers in Hindi and English. Informationprovided during these classes was reinforcedthrough a JCI Handbook that was distributed toall staff.

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Indraprastha Medical Corporation Limited

In order to share its expertise in cardiac care, Apollois starting a Certificate programme in cardiacemergencies which will have concise and relevantevidence based guidelines relating to themanagement of common cardiac emergencies.This programme is open to all general physiciansand doctors in every part of the country, in urbanand rural areas.

INFECTION CONTROL AND ENVIRONMENT

The infection control programme at your Hospitalhas matured into one of the best programmes inthis country. Employee safety and infectionprevention was addressed by educational drives.Personal protective equipment was augmented toprevent exposure inoculation injuries and provisionof pre and post exposure prophylaxis made.Vaccination of staff for various preventableinfections including Hepatitis B is an ongoingphenomenon. Care was also taken to maintainenvironment to acceptable standards to containinfective exposures. In addition, nurses and doctorsadopted latest technical measures includingstringent hand hygiene routines.

The result of all these preventive measures saw aperceptible decrease in the infective indices.

International and national experts in the field ofinfections control visited and disseminatedknowledge in various symposia, workshops andchapter meets organized by the Infection ControlCommittee, Indraprastha Apollo Hospitals incollaboration with national organizations likeHospital Infection Society of India and IndianSociety for Critical Care Medicine.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Our promise of touching more lives reflects thestrong social commitment of the Apollo HospitalsGroup. Throughout the year, the focus atIndraprastha Apollo Hospitals too was on adheringto this motto and making a difference to society.

The Hospital voluntarily came forward to offer a rayof hope to a 21-day old baby battling with a heartdisease that had been abandoned by its parents.After the news about the abandoned baby spread,Indraprastha Apollo Hospitals decided to offer freetreatment to the critically ill infant, who wasdiagnosed with a congenital heart condition.

Other initiatives taken to benefit the communityincluded prevention and awareness building campson various diseases.

TECHNOLOGY ABSORPTION

The Company continued to invest in cutting edgetechnology to offer the latest in medical care andmaintain international standards. Among the newdevices and systems the Company invested inincluded:

• Intellivue Patient Monitoring System – This isa significant addition as the innovative andversatile monitoring system helps speedawareness of critical changes in patientcondition. It spans the care environment, patientacuity levels and clinical requirements andincorporates new levels of quantification andinterpretation.

• Infinia Hawkeye 4 SPECT/CT System – Thiswas installed in the department of NuclearMedicine. Infinia Hawkeye 4 is a dual detectorsystem combined with a multi-slice helicalSPECT/CT delivering higher image quality, fasteracquisition, more versatility and anunprecedented patient throughput. It is a3rd Generation SPECT/CT system product ofGE Health Care. It delivers high qualityattenuation corrected images for every SPECTprocedure and precise localization, thusimproving diagnostic confidence.

• iE33 Intelligent Echocardiography System:This system spells a radical leap in imagequality. The iE33 Intelligent EchocardiographySystem provides advanced clinical imagingperformance for quicker, more accuratediagnosis. Its revolutionary fifth generationLive3D reveals new information not previouslyavailable from echo and expands the utility ofecho leading to better surgical planning andcatheter guidance.

Apart from these, the Hospital invested in state ofthe art ultra sound scanning system, and treatmentplanning system for linear accelerator – significanttechnological tools that will help improvediagnostics and disease management.

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DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of theCompanies Act, 1956, your Directors state:

(i) that in the preparation of the annual accounts,the applicable accounting standards havebeen followed;

(ii) that appropriate accounting policies have beenselected and applied consistently and havemade judgments and estimates that arereasonable and prudent so as to give a trueand fair view of the state of affairs of theCompany as at 31st March, 2008 and of theprofit of the Company for the year ended31st March, 2008;

(iii) that proper and sufficient care has been takenfor the maintenance of adequate accountingrecords in accordance with the provisions ofthe Companies Act, 1956 for safeguarding theassets of the Company and for preventing anddetecting fraud and other irregularities;

(iv) that the annual accounts have been preparedon a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, aManagement Discussion and Analysis Report anda Report on Corporate Governance is attached tothis Report.

A Certificate from the Statutory Auditors of theCompany regarding the Compliance by theCompany of the conditions stipulated under Clause49 of the Listing Agreement is also attached to thisReport.

A declaration by the Managing Director pursuantto clause 49(I)(D)(ii) of the Listing Agreement statingthat all the Board Members and SeniorManagement Personnel of the Company haveaffirmed compliance with the Code of Conduct,during the financial year ended 31st March, 2008,is also attached to this Report.

AUDITORS / AUDITORS’ REPORT

M/s. S. C. Vasudeva & Co., Chartered Accountants,Auditors of the Company shall hold office until theconclusion of the ensuing Annual General Meetingand are eligible for re-appointment.

The Company has received a letter from M/s. S. C.Vasudeva & Co., Chartered Accountants, to theeffect that their appointment, if made, would bewithin the prescribed limits under Section 224(1-B)of the Companies Act, 1956. The Board of Directorsrecommends the appointment of M/s. S. C.Vasudeva & Co., Chartered Accountants asAuditors of the Company.

DIRECTORS

Mr. D. S. Negi had superannuated from the officeof the Principal Secretary, Health and FamilyWelfare, Government of NCT of Delhi and ceasedto be a Director of the Company. In his place, theBoard appointed Mr. Vivek Rae, Principal Secretary,Health and Family Welfare, Government of NCT ofDelhi as an Additional Director of the Company.

Mr. Ramesh Narayanaswami had superannuatedfrom the office of the Chief Secretary, Governmentof NCT of Delhi and ceased to be a Director andChairman of the Company. In his place, the Boardappointed Mr. Rakesh Mehta, Chief Secretary,Government of NCT of Delhi as an AdditionalDirector and Chairman of the Company.

Pursuant to Section 260 of the Companies Act,1956, Mr. Vivek Rae and Mr. Rakesh Mehta will holdoffice of the Director only up to the date of theAnnual General Meeting of the Company. TheCompany has received notices under Section 257of the Companies Act, 1956 proposing the abovenamed persons as candidates for the office ofDirector, liable to retire by rotation. A resolutionseeking approval of the shareholders has beenincorporated in the notice of the Annual GeneralMeeting.

In accordance with the provisions of the CompaniesAct, 1956 and the Articles of Association of theCompany, Lt. Gen. (R) Vijay Lall and Mr. SatnamArora, Directors of the Company shall retire byrotation at the ensuing Annual General Meeting andbeing eligible, offer themselves for re-election.

The information on the particulars of the Directorsseeking appointment / re-appointment, as requiredunder clause 49 of the Listing Agreement, has beenfurnished in the notice to the shareholders for theAnnual General Meeting.

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Indraprastha Medical Corporation Limited

FIXED DEPOSITS

During the year under review, the Company hasnot accepted any deposit under Section 58A of theCompanies Act, 1956 read with Companies(Acceptance of Deposits) Rules, 1975.

INSURANCE

All properties and insurable assets of the Company,including Building, Plant & Machinery and Stockshave been adequately insured, wherevernecessary.

The Company also has a professional indemnityinsurance policy to cover the risk on account ofclaims filed against the Company in consumercourts.

RESEARCH & DEVELOPMENT

The Company is running a multi super-specialtyHospital and is not engaged in any major research& development activity. However, the Hospitalcontinues to be a major centre for internationalclinical trials.

CONSERVATION OF ENERGY

Given the huge concerns over climate change andenergy crisis, companies worldwide areimplementing sustainable practices in the way theydo business. Indraprastha Apollo Hospitals toorecognizes the imperatives of energy efficiency andhas introduced several measures to conserveenergy.

Existing conventional tube light chokes have beenreplaced with 28w Electronic Ballast. A solar heatingsystem for water heating has been installed for partof the facility, which will cut the use of electricgeysers and thereby save electrical energy.

Plant maintenance on a regular basis, review ofenergy generation and its consumption are amongthe other measures adopted to conserve energy.Training programmes for creating awareness aboutconservation of energy and natural resources arealso being held on a regular basis for employees.

Roof of entire OPD block and half of IP block havebeen treated with Thermoshield paint, whichreduces heat gain by 20% thereby reducing airconditioning load substantially.

1000 KL/day Effluent treatment plant is underconstruction and due to be commissioned shortly.It will enable the Hospital to save water about400KL/day as well as conform to prescribedregulations.

FOREIGN EXCHANGE EARNINGS & OUTGO

(a) Activities relating to exports; initiatives takento increase exports; development of newexport markets for products and services;and export plans;

The Company is engaged in the healthcarebusiness and is not carrying on any export activities.The Hospital has been empanelled with eminentinternational insurance companies and hasappointed Healthcare Facilitators in variouscountries to attract international patients.

(b)Total Foreign Exchange earnings and Outgo

During the year under review, foreign exchangeearnings and outgo were as under:-

Earnings : Rs. 30.13 crore

Outgo : Rs. 15.66 crore

INDUSTRIAL RELATIONS

The Industrial Relations scenario continued to becordial during the year under review.

However, the proceedings of the labour and othercourt cases, which took place after the strike by asection of employees in the Hospital in September,1998 continued during the year.

PARTICULARS OF EMPLOYEES

The Particulars of employees as per Section 217(2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules, 1975are annexed and form part of this report.

ACKNOWLEDGEMENT

The Directors wish to thank and deeplyacknowledge the cooperation, assistance andsupport extended by the financial institutions,banks, the Govt. of Delhi and the UnionGovernment.

The Directors also wish to place on record theirappreciation for the all-round support andcooperation received from the employees at alllevels and the Consultant Doctors.

For and on behalf of the Board

Place : New Delhi Rakesh MehtaDate : 9th June, 2008 Chairman

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Apolo-06-24.p65 8/3/2008, 1:49 PM11

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Indraprastha Medical Corporation Limited

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Overview of the Business Environment, IndustryStructure and Current Developments in the Sector

Section I:Indian Healthcare Scenario

Currently the Indian healthcare sector is valued atUS $34 billion. This translates to US $34 per capitaor roughly 6 per cent of GDP. The healthcarebusiness is projected to grow to over US$ 40 billionor 8.5 per cent of GDP by 2012, saysPricewaterhouseCoopers(PwC) in its report,‘Healthcare in India: Emerging market report 2007’.

The private sector accounts for more than 80 percent of the total healthcare spending in India.Although this year the Indian government hasincreased its budgetary outlay on healthcare toRs.16,534 crore – an increase of 15 per cent —the sector will continue to be dominated by theprivate sector. Estimates suggest that privatehealthcare spending in India will rise from Rs.69,000 crore to Rs. 156,000 crore by 2012. Thisfigure could further go up by an additional Rs.39,000 crore if widespread health insurance coverbecomes operative.1

The private sector provides 60 per cent of alloutpatient care in India and as much as 40 per centof all in-patient care. It is estimated that nearly 70per cent of all hospitals and 40 per cent of hospitalbeds in the country are in the private sector, saysPwC.

Some long-awaited policy initiatives from thegovernment, rising affluence among the middleclass which can now afford quality healthcare, andincreasing health insurance penetration have putIndia’s healthcare sector on an unprecedentedgrowth curve.

Within the private sector, corporate healthcare isexpected to witness heightened activity thanks toa five-year tax holiday under Section 80-1B for newhospitals investing in Tier II towns that thegovernment has declared in the latest Budget. Thiswindow will be open between April 2008 and March2013 during which the hospital has to beginoperations.

Experts feel that this bold new initiative will spurgrowth among corporate hospitals, which willdeploy investments in Tier II towns to takeadvantage of the tax break.

Already, the healthcare industry has become oneof India’s largest sectors, in terms of revenue andemployment, and the sector is expanding rapidly.From four million jobs currently, the sector isexpected to provide 9 million jobs by 2012.

The Outlook

An important factor in the healthcare sector’sdynamic growth is the country’s growing middleclass, which can now afford quality healthcare andis demanding it. According to PwC, over 150 millionIndians have annual incomes of more than US$1,000, and many who work in the businessservices sector earn as much as US $20,000 a year.Today at least 50 million Indians can afford to buyWestern medicines - a market only 20 per centsmaller than that of the UK.

There is also heightened awareness abouthealthcare needs among Indians. Today, Indiansare spending more on healthcare and preferringprivate services to government. According to a2007 McKinsey report, average householdconsumption of healthcare will triple by 2015 andrate of annual growth in this segment will rise fromcurrent 3 per cent to 9 per cent. Estimates suggestthat healthcare’s share of the wallet will rise as fastas education, and three times that of beveragesand food. 2

The number of foreigners coming to India for qualityhealthcare is also witnessing immense growth. Witha GDP growth of nearly 9 per cent, India is one ofthe fastest growing economies in the world and theperfect health-hub of the world. Experts feel thatthe windfall that began ever since the developedworld discovered that it could get quality healthcareservice for less than half the price in India willcontinue.

1 CII-McKinsey study2 Businessworld, 3 September 2007

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OPPORTUNITIES

For healthcare delivery firms, overwhelmingopportunities exist in areas like health insurance,international patients, telemedicine and clinicaltrials.

• Health Insurance: According to estimates(Businessworld, 3 September 2007) premiumbased health insurance would expand coveragefrom 30 million Indians in 2006 to 120 millionpeople in 2015. Removal of regulatory hurdlesand entry of international players are expectedto be key drivers of expanded health insurance,which in turn will translate into increased footfallsin corporate hospitals.

• International Patients: According to CRIS-INFACHospitals Review 2007, an estimated 2 lakhinternational patients visited India in 2006, upfrom 10,000 in 2000. The medical tourism marketis estimated at Rs. 1,300 crore in 2008 andexpected to grow to Rs. 7,800 crore by 2012, aCompounded Annual Growth Rate (CAGR) of55 per cent. A CII-McKinsey report corroboratesthis, projecting that medical tourism couldcontribute Rs. 5,000-10,000 crore as additionalrevenue for the tertiary care hospitals by 2012.This will account for 3-5 per cent of the totalhealthcare delivery market.

• Telemedicine: A 2007 study by CRISIL Researchon the healthcare sector says that telemedicineis key to improving efficiency and widening thereach of healthcare, especially to rural India. Thestudy points out that with over 70 per cent ofIndia’s population residing in rural areas andmore than 75 per cent of Indian doctors basedin cities, telemedicine will turn out to be the onlyfeasible way to bridge the rural-urban healthdivide.

• Clinical Trials: Clinical trials can become a US$1 billion industry in India by 2010. However,the industry would need a boost in terms ofeffective government policies and effectiveutilization of infrastructure.

THREATS

The biggest challenge for the healthcare industrytoday is an acute shortage of qualified doctors,nurses and trained paramedic staff. With severalnew players entering the tertiary care segment, thedemand supply ratio is going to get skewed further.Given the staffing constraints, it is going to be achallenge to meet stringent quality standards.

According to CRISIL research, the nurse-per-bedratio in India is 0.87 vis-à-vis the world average of1.2 nurses per bed. The ratings and researchagency suggests that corporates should set upnursing colleges along with hospitals so that thereis continuous flow of nursing staff.

Retention of talent due to constraints in availabilityof trained staff will push staff costs higher.

The Way Ahead

The growth in India’s healthcare has also beenfuelled by the country’s burgeoning population aswell as the new profile of lifestyle diseases, thetreatment for which is usually long-term, expensiveand involves specialized tertiary care providers.According to CRIS-INFAC Hospitals Review 2007,the lifestyle diseases segment - cardiac, oncologyand diabetes - is expected to grow from Rs. 23,000crore in 2006 to Rs. 57,000 crore by 2011. Hospitalsthat have invested in super specialty centres areexpected to see volumes surge.

Hospitals with super specialty centres are also wellequipped to provide Disease Mangement (DM)programmes. DM – a concept very popular in theWest - is a system of reducing healthcare costsand improving quality of life for individuals withchronic disease conditions through integrative care.Some illnesses where Disease Managementprogrammes are shown to be effective are Coronaryheart disease, kidney failure, hypertension, obesity,diabetes, asthma, cancer, arthritis andosteoporosis. In all these, the sufferer usually hasto visit different speciality doctors – for instance, adiabetic has to consult a nutritionist, a cardiologistand so on. If all these facilities are under one roof,it not only cuts cost but the doctors can offercollaborative treatment and manage the condition

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Indraprastha Medical Corporation Limited

better, easing the disease path. In the US diseasemanagement is a huge industry with many vendorsand several employer sponsored DM programmesfor their workers.Web based assessment tools andother protocols are used to measure theeffectiveness of this programme. In India, DM isstill at a nascent stage but given the spurt in lifestylediseases, this is a huge opportunity area forcorporate hospitals.

India’s population is projected to touch 1.2 billionby 2015, representing an increased market size.The increase in the population share of the elderlyis also causing a change in the pattern of demandfor healthcare services. Such demographictransition is opening up both preventive andcurative care opportunities in healthcare, whichcorporate hospitals are well poised to exploit. Forinstance, in-patient capacity in cardiac care is closeto the point of reaching excess supply in certaincities.

Given that the disease profile and its managementare constantly evolving, it is imperative for hospitalsto be proactive rather than reactive. With nationalmapping of disease profiles underway in India,hospitals can quickly spot the trend of diseasesand be prepared in those areas.

As Hospital Management comes of age, gains canbe expected from bringing in efficiencies into thesystem. Earlier, hospitals had evolved rather thanbe designed. Today, processes are gettingstructured so that not only are there multiple pointsof control but patient convenience is also kept inmind. Information capture, data-based qualitycontrol, technological innovations are alltransforming healthcare delivery systems –especially in the private tertiary care institutions.Corporate entities entering the healthcare sectorhave already introduced managerial practices andtools that are leading to the expansion of the hospitalmanagement education industry.

While managerial acumen will lead to cost reductionand efficiencies, the real differentiating edge willlie in providing new treatments and cutting edgetechnology: Medical science is advancing at a rapidpace and new treatment protocols are emergingby the day. The challenge is to rapidly upgradetechnology and be prepared.

Section II

Indraprastha Apollo Hospitals – PreferredHealthcare Service Provider

Indraprastha Apollo Hospitals is the firstinternationally accredited hospital in India. In pursuitof its mission to treat illness and promote wellness,the company has constantly set new benchmarksof excellence and redefined healthcare deliverysystems. Not surprisingly, it has emerged as thepreferred tertiary care destination in India and aglobal medical powerhouse. It has consistentlyfigured among the Top Ten list of best hospitals inthe country. In a nationwide survey to find out India’sbest hospitals, The Week magazine rankedIndraprastha Apollo Hospitals, Delhi number eight.

Key Strengths

Indraprastha Apollo Hospitals has emerged as oneof the most valuable healthcare institutions in Indiariding on four assets – technological, infrastructural,human and intellectual.

The Company continues to invest in newtechnologies, top line doctors and qualitystandards. Given its first mover advantage, qualityof service emanating from long experience in thehealthcare industry, nationwide brand equity, fairlywidespread presence and dedication to providecommitted care, Indraprastha Apollo Hospitals isconfident of retaining its leadership position.

OVERVIEW OF SEGMENT-WISE BUSINESSPERFORMANCE

The Company is engaged in healthcare business,which in the context of Accounting Standard 17issued by the Institute of Chartered Accountants ofIndia, is considered the only business segment.

Financial year 2007-08 represented a year of well-rounded growth for the Hospital and validatedseveral growth strategy steps taken earlier.

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FINANCIAL PERFORMANCE/OPERATIONALPERFORMANCE

During the year gone by, the Hospital registeredsignificant growth in average bed occupancy andsurgical volumes. The total income of the Companystood at Rs. 342.27 crore registering an impressivegrowth of over 36 per cent from the previous yearfigures of Rs. 253.75 crore.

The profit before tax stood at Rs. 25.82 crore andregistered an 12 per cent growth over the profitbefore tax in the previous year of Rs. 22.97 crore.

The profit after tax was Rs. 16.15 crore as comparedto the previous financial year (Rs. 14.72 crore) – agrowth of 10 per cent.

Compared to the growth in turnover, profits for theyear did not register proportionate increase due toa variety of factors. For one, there was significantincrease in staff costs incurred in order to retaintalent as competition was offering attractivecompensation to trained staff. Expenses were alsoincurred in modernizing and upgrading the facilityso that it could improve efficiencies as well as takeon the competition posed by brand new privatehospitals. Interest costs were also higher due tofirming up of interest rates and increase in capitalemployed in view of the rise in volume of business.Depreciation was also higher compared to theprevious year. Finally, the Noida hospital, which inits second year of operation registered good growthin volumes but made a loss of Rs. 2.02 crore, alsomade a difference to the bottom-line.

HUMAN RESOURCE DEVELOPMENT

People are the biggest resources in the HealthcareServices sector. Indraprastha Apollo recognizesthat Human Resource is the differentiating edge inservice delivery and an inseparable part of itsgrowth strategy. Identifying and developing talentand investing in training continue to be the focusof the management. The HR team strives to alignHR policies with business and organization goalsand create a performance driven culture. TheCompany invested in regular leadershipdevelopment programmes, reskilling workshopsand other training modules for its staff. Trainingareas ranged from General Awareness to

Behavioral skills. Special sessions on stressmanagement and Six Sigma training were alsoarranged.

The total number of employees in the Company ason 31st March, 2008, was 2802 as compared to2435 people last financial year. Besides this, thereare 350 consultant doctors who work in the Hospitalon a ‘fee for service’ basis. The Company hasengaged contractors for various support servicesin the Hospital and they have deployed 822workers.

OUTLOOK

There is tremendous demand – both from domesticas well as international segments - for healthcareservices in India. This is reflected in the bedoccupancy figures at Indraprastha Apollo Hospitals,which touched an average of 466 for the year 2007-2008. On several days peak occupancy (524 outof 529) was achieved during the year.

Indraprastha Apollo Hospitals is uniquely placedto take advantage of the opportunity arising fromsurging demand. The Company has alreadysubmitted building plans to MCD for approval toadd 200 additional beds in the Hospital complex.

A lot of upgradation and renovation activities wereundertaken in OPD area in order to bring inefficiencies and also meet the competition fromother new hospitals. These infrastructuralimprovements are expected to bring in betterrealization per patient.

The Indraprastha Apollo Hospital, Delhi was the firsthospital in the country to get an international qualityaccreditation certificate, when it was accredited bythe Joint Commission International (JCI), USA.India’s independent credit rating agency CRISILhas also assigned a Grade A rating to Apollo.Indraprastha Apollo Hospital will also be takingmore initiatives to meet the stringent quality normsit has set for itself.

There has been a huge surge in air ambulanceservices. According to estimates, around 365airliftings worth several millions of rupees happenin Delhi in a year, of which Indraprastha ApolloHospitals alone did nearly 90 in 2007-08.

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Indraprastha Medical Corporation Limited

The volume of international patients went upsignificantly during the year with 3239 foreignpatients admitted as against 1949 patients in theprevious year. The Iraqi Health Ministry had signedan agreement with the Hospital for treating high endtertiary care patients and for training their doctors.Strong marketing thrust in this area is expected toresult in more countries participating in suchprogrammes.

The outlook for your Company certainly appearsbright since Indraprastha Apollo Hospitals enjoysgreat brand equity and has a reputation of being apreferred healthcare delivery service provider forthe increasingly discerning domestic healthcareconsumer as well as the global quality consciouspatient.

RISK AND CONCERNS

Spotting the huge potential in the private healthcaresector in India, a host of private players haveventured into this segment. Given the increasedcompetition and the attractive remunerationsoffered by the new players, attrition is inevitable.However, the Indraprastha Apollo Hospitals hastaken steps – including salary revisions andproactive HR policies - to retain talent.

The other factor that poses a challenge to everyhealthcare delivery provider is the rapid pace withwhich technology is moving. New discoveries,innovations and sophisticated medical systems areunfurled day by day. Equipment technologyobsolescence is therefore a significant risk.However, since this is an industry wide challenge,options such as leasing are emerging to combatwith the issue.

Free treatment to patients recommended by thegovernment is also a bit of a contentious issue. Asper the terms of lease deed with the Governmentof Delhi, the Hospital has been providing freetreatment, exclusive of medicines and medicalconsumables, to patients recommended by the

Delhi government. A public interest litigation (PIL)regarding free treatment in the Hospital is pendingin the High Court of Delhi. The main issue in thePIL is that the Hospital should also provide freemedicines and medical consumables to patientsrecommended by the Delhi government.

INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY

The Company has put in place adequate internalcontrols to ensure that assets are safeguarded andprotected against loss from unauthorized use ordisposition and the transactions are authorized,recorded and reported correctly.

The internal audit department together with anindependent firm of Chartered Accountants reviewsthe effectiveness of the systems and procedures.The internal auditors evaluate the adequacy of theinternal control systems by analyzing and testingcontrols and make their recommendations to themanagement to improve controls wherevernecessary.

CAUTIONARY STATEMENT

Statements in this Management Discussion andAnalysis describing the Company’s objectives,projections, estimates and expectations mayconstitute “forward looking statements” within themeaning of applicable laws and regulations. Actualresults might differ materially from those eitherexpressed or implied.

For and on behalf of the Board

Place : New Delhi Rakesh MehtaDate : 9th June, 2008 Chairman

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REPORT ON CORPORATE GOVERNANCE

The attendance of each of the Directors at the Board Meetings held during the financial year ended 31st March, 2008 and at the lastAnnual General Meeting held on 21st September, 2007, is as under:-

Name of the Director Category Number of AttendanceBoard Meetings at the Last

attended AGM

Mr. Ramesh Narayanaswami (1) Non-Executive 3 Yes(Chairman)

Mr. Rakesh Mehta (2) Non-Executive 1 N.A.(Chairman)

Dr. Prathap C Reddy Non-Executive 4 Yes(Vice-Chairman)

Mr. Richard Leroy Larison (3) Executive 3 Yes(Managing Director)

Mr. D. S. Negi (4) Non-Executive 2 N.A.

Mr. Vivek Rae (5) Non-Executive 2 N.A.

Dr. B.Venkataraman Non-Executive – Independent 4 Yes

Lt. Gen. (R) Vijay Lall Non-Executive – Independent 4 Yes

Ms. Suneeta Reddy Non-Executive 4 Yes

Ms. Renu S. Karnad Non-Executive 1 Yes

Mr. V. R. Reddy Non-Executive – Independent 3 No

Mr. V. V. Bhat Non-Executive 3 No

Mr. Satnam Arora Non-Executive – Independent 3 Yes

(1) Ceased to be a Director w.e.f. 05.12.2007.

(2) Appointed by the Board as an Additional Director on 29.01.2008.

(3) Appointed by the Board as an Additional Director on 18.10.2006 and thereafter appointed by the shareholders as a Director andManaging Director at the last Annual General Meeting held on 21.09.2007.

(4) Ceased to be a Director w.e.f. 27.08.2007.

(5) Appointed by the Board as an Additional Director on 12.10.2007.

b) Attendance of each Director at the Board Meetings and the last Annual General Meeting

1. COMPANY’S PHILOSOPHY ON CORPORATEGOVERNANCE

The Company’s Philosophy on CorporateGovernance is to practice transparency inoperations and maintain a professional approachand accountability in dealing with its stakeholders.The Company is committed to deliver health carefacilities comparable with international standardsat affordable cost to a wide cross section of thesociety and to optimize shareholders value.

2. BOARD OF DIRECTORS

a) Composition and category of Directors

As on 31st March, 2008, the Board of Directors had11 members comprising of one Executive Directorand ten Non-Executive Directors including fourIndependent Directors. The Chairman of the Boardis Non-Executive.

The Chairman, Vice-Chairman and ManagingDirector are not liable to retire by rotation. All otherDirectors are liable to retire by rotation.

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Indraprastha Medical Corporation Limited

(d) Number of Board Meetings held and thedates of the Board Meeting

Four (4) Board meetings were held during thefinancial year ended 31st March, 2008. The datesof the meetings are as follows : 29th May, 2007,26th July, 2007, 12th October, 2007 and 29th January,2008. The maximum time gap between twoconsecutive Board meetings was not more than fourmonths.

3. AUDIT COMMITTEE

(a) Terms of Reference

The term of reference of the Audit Committee coversthe areas mentioned under Clause 49 of the ListingAgreement and Section 292A of the Companies,Act, 1956, besides other terms as may be referredby the Board of Directors.

(b) Composition, Name of Members andChairman

As on 31st March, 2008, the Audit Committeeconsists of 3 Non-Executive Directors (including 2Independent Directors) viz. Dr. B Venkataraman,Lt. Gen. (R) Vijay Lall and Ms. Suneeta Reddy.

Dr. B. Venkataraman (Independent Director) is theChairman of the Audit Committee.

Mr. Ajay Kumar Singhal, Vice President cumCompany Secretary is the Secretary to the AuditCommittee.

(c) Meetings and attendance during the year

The Audit Committee met 4 times during the yearand the maximum time gap between twoconsecutive meetings was not more than fourmonths. The name of Members, Chairman and theirattendance at the Audit Committee Meetings areas under:

Members Category Meeting MeetingHeld Attended

Dr. B. Venkataraman Non-Executive 4 4(Chairman) Independent

Lt. Gen (R) Vijay Lall Non-Executive 4 4Independent

Ms. Suneeta Reddy Non-Executive 4 2

Mr. V. V. Bhat, Director representing Govt. of Delhi,also attended the 3 meetings of the AuditCommittee by invitation.

The Chairman of the Audit Committee was presentat the last Annual General Meeting.

(c) Number of Other Boards or Board Committees in which the Director is a Member/Chairperson

Name of Director Number of outside Directorships Total number ofheld (excluding alternate Committee position

directorships and directorships held (excluding inin private and foreign private Companies)

Companies) as on 31.3.2008 as on 31.3.2008

Chairman Member

Mr. Rakesh Mehta (Chairman) 9 Nil Nil

Dr. Prathap C Reddy (Vice-Chairman) 13 Nil Nil

Mr. Richard Leroy Larison (Managing Director) Nil Nil Nil

Mr. Vivek Rae 2 Nil 2

Mr. V. V. Bhat 9 Nil Nil

Lt. Gen. (R) Vijay Lall Nil Nil Nil

Dr. B.Venkataraman 2 Nil 1

Ms. Suneeta Reddy 14 1 2

Ms. Renu S. Karnad 13 3 2

Mr. V.R. Reddy Nil Nil Nil

Mr. Satnam Arora 4 Nil Nil

None of the Directors on the Board hold the office of Director in more than 15 Companies, or membershipof Committees of the Board in more than 10 Committees and Chairmanship of more than 5 Committeesacross all Companies.

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4. REMUNERATION COMMITTEE

(a) Terms of Reference

The terms of reference of the RemunerationCommittee is to determine the Company’s policyon specific remuneration packages for executivedirectors and other senior executives of theCompany including pension rights, anycompensation payment and such other relevantmatters as may be referred by the Board from timeto time.

(b) Composition, Name of Members andChairman

As on 31st March, 2008, the RemunerationCommittee consists of 5 Non-Executive Directors(including 3 Independent Directors) viz.Dr. B Venkataraman, Mr. V. V. Bhat., Lt. Gen. (R)Vijay Lall, Ms. Suneeta Reddy and Mr. V. R. Reddy.Dr. B Venkataraman (Independent Director) is theChairman of the Remuneration Committee.

(c) Attendance during the year

The Remuneration Committee met once during theyear ended 31st March, 2008. All the members ofthe Remuneration Committee were present at themeeting.

The Chairman of the Remuneration Committee waspresent at the last Annual General Meeting.

(d) Remuneration Policy

The remuneration policy is to remain competitive inthe industry and to attract and retain talent andappropriately reward employees on theircontribution.

(e) Details of Directors Remuneration

The details of Remuneration paid to Directors forthe year ended 31st March, 2008 are as under:-

i) The Non-Executive Directors are paid by wayof sitting fee for attending each meeting of theBoard of Directors or Committees thereof. Thedetails of Remuneration paid to Non-ExecutiveDirectors are as under:-

Name of the Director Sitting Fee (Rs.)

Mr. Ramesh Narayanaswami 45,000Mr. Rakesh Mehta 15,000Dr. Prathap C Reddy 60,000Mr. V. V. Bhat 1,05,000Mr. D. S. Negi 30,000Mr. Vivek Rae 30,000Lt. Gen. (R)Vijay Lall 1,65,000Dr. B Venkataraman 1,65,000Ms. Suneeta Reddy 1,05,000Mr. V. R. Reddy 60,000Ms. Renu S Karnad 15,000Mr. Satnam Arora 45,000

Apart from receiving director’s remuneration by wayof sitting fee for attending each meeting of the Boardor Committee thereof, none of the Non-ExecutiveDirectors has any pecuniary relationship ortransactions with the Company during the yearended 31st March, 2008.

(ii) The details of Remuneration paid to ExecutiveDirector are as under:-

Name of the Salary Perquisites Total

Director (Rs.)

Mr. Richard 82,53,000 13,05,700 95,58,700Leroy Larison

5. SHAREHOLDERS / INVESTORS’GRIEVANCE COMMITTEE

As on 31st March, 2008, the Shareholders /Investors’ Grievance Committee consists of 3 Non-Executive Directors viz. Lt. Gen. (R) Vijay Lall,Dr. B Venkataraman and Mr. Satnam Arora.Lt. Gen. (R) Vijay Lall is the Chairman of theShareholders / Investors Grievance Committee. TheShareholders / Investors’ Grievance Committee mettwice during the year.

a) Name of the Lt. Gen. (R) Vijay LallNon-ExecutiveDirector headingthe Committee

b) Name and Mr. Ajay Kumar SinghalDesignation of Vice President cumthe Compliance Company SecretaryOfficer

c) Number of The Company hasShareholders received 102 complaintsComplaints during the year and 2received during complaints were pendingthe financial year at the beginning of the

year.

d) Number not All the complaints haveresolved to the been resolved to thesatisfaction of satisfaction of theshareholders complainants.

e) Number of Sixpending complaintsas on 31st March,2008

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2) There were no instances of non-compliance by the Company, penalties, strictures imposed on theCompany by the Stock Exchange or SEBI or any Statutory authority on any matter related to capitalmarkets during the last three years.

3) The Company has not adopted a Whistle Blower Policy.

4) The Company has complied with all the Mandatory requirements of the Clause 49 of the ListingAgreement with Stock Exchanges on Corporate Governance. As regards the Non-mandatoryrequirements the extent of compliance has been stated in this report against each item.

7. DISCLOSURES

1) During the financial year ended 31st March, 2008, the following were the related party transactionsof material nature:-

Rs. in Lakhs

Name Relationship Nature of 31st March, 31st March,Transactions 2008 2007

Apollo Hospitals Associate Pharmacy-Consumables 957.82 978.84Enterprise Limited Licence Fees 78.00 78.00

Commission on Pharmacy Sales 237.46 202.76Reimbursement of Expenses 49.44 39.71Account Payable 484.85 403.95

Managing Key Management Remuneration to 95.59 30.74Director Personnel Managing Director

6. GENERAL BODY MEETINGS

The last three Annual General Meetings wereheld as under:

Financial Year Location Date Time

2006-2007 FICCI, Golden 21st September 10.15 A.MJubilee Auditorium, 2007

2005-2006 Federation House 11th August, 10.15 A.MTansen Marg, 2006

2004-2005 New Delhi 31st August, 10.00 A.M2005

Note:-

1) Special Resolution was passed at all three AGM mentionedabove for the appointment of Auditors, being more than25% of the share capital of the Company is held by theGovt. of Delhi.

2) Special Resolution was passed at AGM on 31st August,2005, for payment of all fees / compensation to the

Non-Executive Directors, including Independent Directors,in pursuance of the requirement of the amended Clause49 of the Listing Agreement with the Stock Exchanges onCorporate Governance.

3) Special Resolution was passed at AGM on 21st September,2007, in pursuance of Section 198, 269 & 309 of theCompanies Act, 1956 for the appointment of andremuneration to Mr. Richard Leroy Larison as “ManagingDirector” of the Company.

4) Special Resolution was passed at AGM on 21st September,2007, in pursuance of Section 310 of the Companies Act,1956 for increase in the remuneration payable toMr. Richard Leroy Larison, Managing Director of theCompany.

5) No Resolution was required to be put through postal ballotlast year.

6) No special resolution is proposed to be conducted throughpostal ballot.

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9. GENERAL SHAREHOLDER INFORMATION

a. Annual General Meeting 10st September, 2008 at 11.00 A.M.Date, Time and Venue FICCI Golden Jubilee Auditorium,

Federation House, Tansen Marg,New Delhi – 110001.

b. Financial Calendar 1st Qtr. - 1st April to 30th June2nd Qtr. - 1st July to 30th September3rd Qtr. - 1st October to 31st December4th Qtr. - 1st January to 31st March

c. Book Closure Date 30th August, 2008 to 10th September, 2008. (both days inclusive).d. Dividend Payment Date On or after 14th September, 2008.e. Listing on Stock Exchanges 1) The Bombay Stock Exchange Limited (BSE) &

2) The National Stock Exchange of India Ltd. (NSE)The annual listing fee for the year 2008-09 has been paid.

f. Stock Code/Symbol BSE - 532150NSE - INDRAMEDCO

Demat ISIN in NSDL & CDSL INE681B01017g. Market Price Data Monthly High & Low during each month of the financial year

2007-08 at National Stock Exchange (NSE) is under:-

Month National Stock Exchange NSE Index (S&P CNX 500)

Highest Lowest Volume Highest Lowest(Rs.) (Rs.) (Nos.)

April – 2007 30.85 27.10 9,23,645 3453.40 2997.85May – 2007 36.35 28.90 33,51,679 3578.60 3318.45June – 2007 36.00 31.00 18,26,039 3626.10 3413.05July – 2007 32.90 29.65 12,74,706 3883.90 3615.65August – 2007 33.90 29.00 20,33,270 3793.85 3362.80September – 2007 43.70 32.10 56,71,155 4202.95 3713.10October – 2007 42.00 34.40 29,90,738 4843.65 4129.75November - 2007 44.90 33.20 32,63,948 5020.00 4512.20December - 2007 61.10 41.00 90,26,819 5364.00 4895.85January - 2008 60.00 35.00 16,19,932 5563.50 3744.45February - 2008 39.00 32.00 10,69,054 4639.95 4044.75March - 2008 37.00 26.50 22,29,549 4262.25 3603.45

h. Registrar and Transfer Agents M/s. Intime Spectrum Registry Ltd. continue to be the Registrar &Transfer Agents of the Company and their address is as under:-M/s. Intime Spectrum Registry Ltd.A-40, 2nd Floor, Near Batra Banquet Hall,Naraina Ind. Area, Phase II,New Delhi - 1100 028.

i. Share Transfer System

The Company’s shares are traded in the Stock Exchanges compulsorily in demat mode. Physical Shareswhich are lodged with the Registrar and Transfer Agents / or with the Company for transfer are processedand returned to the shareholders duly transferred within the time limit stipulated under the ListingAgreement subject to the documents being in order.

8. MEANS OF COMMUNICATION(i) Quarterly Results Published in the newspapers.

(ii) Newspapers wherein results normally published Financial Express – All edition & Jansatta (Hindi)

Delhi edition

(iii) Any website, where displayed Yes – www.apollohospdelhi.com

(iv) Whether it also displays official news releases Yes

(v) The presentations made to institutional investors Noor to the analysts

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Indraprastha Medical Corporation Limited

j. Distribution of shareholding as on March 31, 2008.

Shareholding of Shareholders Share Amountnominal value ofRs. Rs. Number % to total Rs. % to total

Upto 2,500 18576 57.509 23831420 2.6002,501 - 5,000 6909 21.389 29864910 3.2585,001 - 10,000 3480 10.774 30901150 3.37110,001 - 20,000 1474 4.563 23667390 2.58220,001 - 30,000 540 1.672 14169390 1.54630,001 - 40,000 265 0.820 9747270 1.06340,001 - 50,000 259 0.802 12510910 1.36550,001 - 1,00,000 378 1.170 29539070 3.2221,00,001 & above 420 1.300 742498490 80.994

Total 32301 100.000 916730000 100.000

Shareholding Category as on 31st March, 2008

Category No. of Shares held % to total

Indian Promoters 42844637 46.736Foreign Promoters 3513654 3.833Mutual Funds & UTI 2129351 2.323Financial Institutions / Banks 1395950 1.523Bodies Corporate 16352577 17.838NRI’s/OCB’s 2017257 2.200Indian public 23419574 25.547Grand Total 91673000 100.000

Shares held by Non-Executive Directors

The number of shares held by Non-Executive Directors as on 31st March, 2008, is as under:-

Name of the Non-Executive Director Number of shares held

Dr. Prathap C Reddy 2,37,187

Dr. B Venkataraman 15,800

Ms. Suneeta Reddy 1,38,293

k. Dematerialisation of Shares

About 67% of the Company’s paid–up equity share capital has been dematerialised upto 31st March,2008

The details of demat of shares as on 31st March, 2008 are as under:-

No. of Shareholders No. of Shares % of Capital

NSDL 19083 56699950 61.85

CDSL 5266 4624117 5.04

Requests for dematerialisation of shares are processed and confirmation is given to the respectivedepositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services IndiaLimited (CDSL) within 15 days.

Shares of the Company are regularly traded at NSE & BSE.

l. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likelyimpact on equity

The Company has not issued any GDRs/ADRs/Warrants or any other convertible instruments.

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m. Hospital Location Indraprastha Apollo Hospitals,Sarita Vihar, Delhi-Mathura Road,New Delhi – 110076.

n. Address for Correspondence Postal Address:-M/s. Indraprastha Medical Corporation LimitedSarita Vihar, Delhi-Mathura Road,New Delhi - 110076E-mail Address:- for Investors:-asinghal@apollohospitals.com

NON-MANDATORY REQUIREMENTS

1. (a) Whether Chairman of the Board is entitledto maintain a Chairman’s office at theCompany’s expense and also allowedreimbursement of expenses incurred inperformance of his duties.

(b) Independent Directors may have a time notexceeding in the aggregate a period of nineyears on the Board of the Company.

2. Remuneration Committee

3. Shareholder rights – the half yearly declarationof financial performance including summary ofthe significant events in last six months shouldbe sent to each household of shareholders

4. Audit Qualifications

5. Training of Board Member

6. Mechanism for evaluating non-executive Boardmembers

7. Whistle Blower Policy

No office for the Chairman is maintained at theCompany’s expense. There was no reimbursementof expenses to the Chairman.

As on date, there is no Independent Director havinga term of office exceeding nine years on the Boardof the Company except Dr. B. Venkataraman whowas appointed on the Board of the Company on22-9-1995 and has completed the term of 12 years.

Please refer to Sr. No. 4 of this report

As the Company’s half yearly results are publishedin English newspaper having a circulation all overIndia and in a Hindi newspaper having a circulationin Delhi region, the same are not sent to theshareholders of the Company.

There are no audit qualifications in the Auditorsreport.

At present, the Company does not have such atraining programme for the Board members.

At present, the Company does not have such amechanism as contemplated for evaluating theperformance of non-executive Board members.

At present, the Company does not have a WhistleBlower Policy.

For and on behalf of the Board

Place : New Delhi Rakesh MehtaDate : 9th June, 2008 Chairman

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Indraprastha Medical Corporation Limited

C E R T I F I C A T E

ToThe Members of Indraprastha Medical Corporation Ltd.

We have examined the compliance of conditions of corporate governance by M/s IndraprasthaMedical Corporation Ltd., for the year ended on 31.03.2008, as stipulated in clause 49 of theListing Agreement of the said company with stock exchange(s).

The compliance of conditions of corporate governance is the responsibility of the management.Our examination was limited to procedures and implementation thereof, adopted by the companyfor ensuring the compliance of the conditions of the Corporate Governance. It is neither an auditnor an expression of opinion on the financial statements of the company.

The company has taken steps for risk assessment and minimization of risk through means ofproperly defined framework.

In our opinion and to the best of our information and according to the explanations given to us, wecertify that the company has complied with the conditions of Corporate Governance as stipulatedin the abovementioned Listing Agreement.

We state that 6 (six) investor grievance(s) are pending against the company as per the recordsmaintained by the company as on 31st March 2008.

We further state that such compliance is neither an assurance as to the future viability of thecompany nor the efficiency or effectiveness with which the management has conducted the affairsof the company.

For S.C. Vasudeva & Co.,

Chartered Accountants

Place : New Delhi Sachin Vasudeva

Date : 9th June, 2008 Partner

M.No. 92783

Declaration under Clause 49-I (D) of the Listing Agreement

ToThe Members of Indraprastha Medical Corporation Ltd.

I hereby declare that all Board Members and Senior Management Personnel of the Companyhave affirmed compliance with the provisions of the CODE OF CONDUCTCODE OF CONDUCTCODE OF CONDUCTCODE OF CONDUCTCODE OF CONDUCT during the financialyear ended 31st March, 2008.

Name : Richard Leroy Larison

Designation : Managing Director

Date : 14th May, 2008

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To the Members of

Indraprastha Medical Corporation Limited.

We have audited the attached Balance Sheet ofIndraprastha Medical Corporation Limited, as at31st March, 2008 and also the Profit and Loss Accountfor the year ended on that date annexed thereto and theCash Flow Statement for the year ended on that date.These financial statements are the responsibility of theCompany’s Management. Our responsibility is to expressan opinion on these financial statements based on ouraudit.

We conducted our audit in accordance with auditingstandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes an examination, on a test basi