Fortis Healthcare

1.  Nature of Operations
 
 The Company was incorporated in the year 1996 to set up, manage and
 operate a chain of multi speciality hospitals and it commenced its
 commercial operations by setting up the Fortis Heart Institute and
 Multi-Speciality Hospital at Mohali in the year 2001. Subsequently, the
 Company has set up / taken over the management of other hospitals in
 different parts of the country. During the year, the Company has
 successfully completed an Initial Public Offer (IPO) of 45,996,439
 equity shares of Rs. 10 each at a premium of Rs. 98 per share.
 Accordingly, the Company has become a listed entity effective May 9,
 2007, with its shares being traded on both BSE and NSE.
 
 2.  Segment Reporting
 
 As the Companys business activity primarily falls within a single
 business and geographical segment, there are no additional disclosures
 to be provided in terms of Accounting Standard 17 Segment Reporting.
 
 3.  The Company has deferred tax liability of Rs. 884.55 lacs on timing
 differences in depreciation and other differences in block of fixed
 assets as per the tax books and financial books and deferred tax assets
 of Rs. 2,675.12 lacs on unabsorbed depreciation as at March 31, 2008.
 The deferred tax liability being less than the deferred tax assets, in
 the context of block of assets, has not been provided for at the year
 end. Also, 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 the Company during the year
 and large amount of accumulated losses carried forward at the close of
 the year, deferred tax assets on timing differences and 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 take advantage of such losses /
 depreciation.
 
                                                        (Rs. In lacs)
                                         March 31, 2008   March 31, 2007
 
 4. Estimated amount of Contracts 
 remaining to be executed on capital
 account and not provided for
 (Net of Capital Advances of Rs. 13.48
 lacs (Previous Year Rs. 25.81 lacs))            55.11           278.05
 
 5. Contingent liabilities (not provided 
 for) in respect of:
 
 a) Claims against the Company not 
 acknowledged as debts (in respect 
 of compensation demanded                       254.40           343.25
 by the patients / their relatives for 
 negligence). The cases are pending 
 with various Consumer Disputes Redressal 
 Commissions. As per the management, 
 these claims are not likely to devolve
 on the Company due to their frivolous
 nature. Further, the Company has taken
 professional indemnity /error and
 omission policies to cover the 
 hospitals, their doctors and staff for
 any possible liability arising from
 such claims.
 
 b) Claims against the Company not
 acknowledged as debts (in respect 
 of reinstatement of services                      -                -
 of one of its former employees). 
 The matter is pending for adjudication
 with The Labour Tribunal and liability,
 if any arising there from is not 
 presently ascertainable.
 
 c) Unredeemed Bank Guarantees executed
 in favour of lessor as security for
 hospital land and building                    139.53           139.53
 taken on lease.
 
 d) Bank Guarantee executed in favour of
 Bombay Stock Exchange towards listing
 of the shares of the                          252.98
 Company with the exchange.
 
 e) Others                                      10.55             6.47
 
 6.  The Company has earned profits of Rs. 261.77 lacs during the
 current year and has accumulated losses of Rs. 13,568.97 lacs as at
 March 31, 2008, which has resulted in erosion of a portion of the
 Companys net worth. In view of the Company posting profits during the
 year and the additional funds raised by the Company through the Public
 Issue during the year to meet the cost of development and construction
 of new hospital by a subsidiary, to refinance the funds availed for the
 acquisition of investment in a subsidiary and to prepay some short term
 loans, the accounts of the Company have been continued to be prepared
 on a going concern basis.
 
 7.  Sundry debtors balances for Ex-Servicemen Contributory Health
 Scheme (ECHS) and Serving Defense Personnel of Rs. 2,920.27 lacs and
 Rs. 34.85 lacs respectively as at the year end remain subject to
 confirmation. The Company has made the provision for doubtful debts of
 Rs. 31.48 lacs against the above which, in the opinion of the
 management, is adequate. The management does not anticipate any
 material differences in the balance dues considered good for recovery
 in the financial statements.
 
 8.  The Company has entered into Operation and Management agreement
 with entities which are into hospital operations, in terms of which,
 the Company is responsible for developing and providing maintenance
 support and related services necessary to support, manage and maintain
 the hospital as may be required. The management fee in this case is
 based on gross billing of the hospital subject to certain conditions as
 per the underlying agreement. The gross billing of the hospital is
 considered based on the unaudited financial statements of the
 respective entity. The management does not anticipate any material
 changes in the amounts considered in financial statements.
 
 9.  The Haryana Urban Development Authority has issued the Letter of
 Allotment for a piece of land for putting up a hospital in Gurgaon to
 Fortis Hospotel Limited (formerly known as Oscar Bio-Tech Private
 Limited) which was originally planned to be allotted in the name of
 Company.
 
 Accordingly, the cost of land aggregating to Rs. 1,858.35 lacs, the
 deferred payment liability of Rs. 499.33 lacs, pre-operative
 expenditure relating to this hospital of Rs. 517.02 lacs and other
 related assets and liabilities incurred by the Company, have been
 transferred to Fortis Hospotel Limited (formerly Oscar Bio-Tech
 Limited).
 
 10.  The Company has incurred expenses aggregating to Rs. 3,278.91 lacs
 (including Rs 135.46 lacs paid to auditors) in connection with its
 Initial Public Offer. In terms of Section 78 of the Companies Act,
 1956, the same has been adjusted against the Securities Premium.
 
 11.  During the year, the Company has redeemed 26,000,000, Class B 5%
 Non Cumulative Redeemable Preference Shares of Rs. 10 each at a premium
 of Rs. 90 per share. In terms of section 78 of the Companies Act, 1956,
 the redemption premium of Rs. 23,400 lacs has been adjusted against the
 Securities Premium.
 
 12.  During the year, the Company has issued 600, Zero Percent
 Unsecured Non- Convertible Debentures of Rs. 10,000,000 each which have
 been redeemed at an aggregate premium of Rs. 1,583.01 lacs. In terms of
 Section 78 of the Companies Act, 1956, the redemption premium has been
 adjusted against the Securities Premium.
 
 13.  During the year, the Company has received Share Application Money
 of Rs 15,000 lacs for issuance of 150,000, Class C Zero Percent
 Redeemable Preference Shares of Rs. 10 each at a premium of Rs. 9,990
 per share. The proposed date of allotment of these shares is June 30,
 2008 and these shares will be redeemed at various dates between June
 30, 2010 and June 30, 2014 at an aggregate premium of Rs.  9,687 lacs.
 
 14.  During the year, the Company has issued 11,500,000, Class C Zero
 Percent Redeemable Preference Shares of Rs. 10 each at a premium of Rs.
 90 per share. These shares are to be redeemed at various dates between
 October 18, 2008 and October 18, 2013 at a premium of Rs. 165 per
 share. The Company has accrued the redemption premium and debited the
 same to Securities Premium Account as permitted by Section 78 of the
 Companies Act, 1956.
 
 15.  During the year, the Company has issued 100,000, Class C Zero
 Percent Redeemable Preference Shares of Rs. 10 each at a premium of Rs.
 90 per share. These shares are to be redeemed at various dates between
 December 19, 2008 and December 19, 2013 at a premium of Rs. 166.05 per
 share. The Company has accrued the redemption premium and debited the
 same to Securities Premium Account as permitted by Section 78 of the
 Companies Act, 1956.
 
 16. 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. Also, the Company has increased its
 investment in SMPL from 5% to 31.26% during the year.
 
 17.  Previous years figures have been regrouped / recasted, wherever
 necessary to confirm to this years classification.