PROJECT REPORT ON ANALYSIS OF FINANCIAL STATEMENTS OF SUPER RELIGARE LABORATORIES (SRL)

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EXECUTIVE SUMMARY
This report is prepared to analyse the financial statements of SRL(super religare laboratories) limited.this report gives a brief introduction about srl,its business development, aims ,current market standing.after that a brief introduction about working of the finance and accounts department of srl vansant kunj is given This is folloId by financial statement analysis of the company.it is then shown why accounting is important and various considerations involved while using these ratios The various various accounting ratios are calculated using financial statements for the past 3 years.finally the ratios then compared with standard norms to see that whether the ratios are satisfactory or not.

ACKNOWLEDGEMENT
As any good work is incomplete without acknowledging the people who made it possible, this report is incomplete without thanking the people without whom this project wouldn't have taken shape. This project is a result of continuous cooperation, effective guidance and support from all the people associated with this project. I would like to express my regards and thanks to, my mentor at srl limited,vasant kunj, for giving us the opportunity to work on this project and learn something new. I are indebted to him for clarifying my concepts by sharing his valued experience in teaching, research and training which have thereby become an unconscious part of my ideas and thoughts while analyzing the financial statements of the firm. . Lastly I would like to thank my families and friends for their continuing support, blessings and encouragement.

INDEX
Serial no Topic Page no

INTRODUCTION
INDUSTRY OVERVIEW
The Healthcare sector, in India, is at an inflection point and is poised for rapid growth in the medium term. However, Indian healthcare expenditure is still amongst the lowest globally. As per the United Nations Development Programme (UNDP) Human Development Report 2011: Sustainability and Inequality India ranks a low 134 among 187 countries in terms of the human development index (HDI), which assesses longterm progress in health, education and income indicators. Indias HDI is 0.5 compared to 0.3 in 2010. The Indian healthcare industry, unlike other industries, stands untouched by recession. There had been a steady growth in this sector, revenues from the healthcare sector accounts for 5.2% of the GDP, making it the third largest growing sector in India, and further the healthcare sector is projected to grow to nearly 1,80,000 crores by year 2012 and a compounded annual growth rate (CAGR) of 15-17 percent for at least the next 7-10 years. In India healthcare is delivered through both the public sector and private sector. The public healthcare system consists of healthcare facilities run by central and state government which provide services free of cost or at a subsidized rates to low income group in rural and urban areas. With the Indian economy enjoying a steady growth, the industry is heading towards growth phase. The introduction of product patents in India is expected to boost the industry by encouraging multinational companies to launch specialized life-saving drugs. Attracted by the advantages such as lower costs of production and skilled workforce that India offers, these companies are looking to set up research and development as well as production centers there. There are some economic factors which make India such an exciting market. Since healthcare is dependent on the people served, Indias huge population of a billion people represents a big opportunity. The middle income group in this vast base is also a large above 300 million and the Demographics of Middle Income Class in India is expected to grow to 400 to 500 Million by 2015. India spends only 1% of its GDP on health, translating into $55 per capita. France spends 10.4% and Japan 8%.

II.

Structure / Market of the healthcare sector

HOSPITALS

Pharmaceutical

HEALTHCARE

DIAGNOSTICS Medical Equipment and Supplies Medical Insurance

The sector comprises of:a) Hospital Government Hospitals includes healthcare centres, district hospitals and general hospitals Private Hospitals includes nursing homes, mid-tier, and top-tier private hospitals b) Pharmaceuticals Includes the manufacture, extraction, processing, purification, and packaging of chemical materials to be used as medications for humans or animals c) Diagnostics Comprises businesses and laboratories that offer analytic or diagnostic services including body fluid analysis d) Medical Equipment and Supplies Includes establishments primarily engaged in manufacturing medical equipment and supplies, such as surgical, dental, orthopaedic, ophthalmologic, and laboratory instruments, etc e) Medical insurance

 Includes health insurance and covers an individuals hospitalisation expenses and medical reimbursement facility incurred due to sickness Composition of revenue

Market Break-up By Revenue 2012 Estimate

4% 3% 9% hospital 13% pharmaceuticals dignostics medical equipments 71% medical insurance

Of total healthcare revenues in the country Hospitals account for 71 per cent Pharmaceuticals for 13 per cent, and Medical equipment and supplies for 9 per cent

Revenue(billion $)
50 45 40 35 30 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 Revenue(billion $)

Per capita healthcare expenditure increased at a CAGR of 8.5 per cent over the period 2007-10 By 2012 healthcare spending is estimated to contribute 8 per cent of GDP and employ around 9 million people

The Diagnostics Services Industry in India In recent years, the diagnostics market has become one of the important growth industries, after information technology/information technology enabled service industry and other knowledge-based sectors. The IMaCS Report estimates that 60-70% of treatment decisions are based on test results. The market has grown robustly in past few years on the back of increasing disease prevalence, rising consumer awareness and preference for healthy lifestyle with preventive care. Diagnostics services can be divided into radiology, pathology and other services. The following diagram illustrates the share of corporate sector in diagnostics services market in India in Fiscal 2010
Corporate Sector, 9.1

Fragmented Market, 90.1

Corporate Sector

Fragmented Market

While the top-three corporate diagnostics service providers in India accounted for approximately 7% of the total market in Fiscal 2010, the corporate presence is still small with an estimated 9.10% share. Although the corporate sector presence is marginal, examples from more developed countries indicate that the natural path for the progression of the industry from an unorganised sector to a more organised sector The following graph depicts the projected growth of the diagnostics industry from 2009 to 2015

Projected Growth of the Dignostic Industry (in billions)

300 250 200 150 100 50 0 2009 2015 59.1 254.4

The following graph depicts the projected growth of pathology and radiology services from 2009 to 2015

in billions
200 180 160 140 120 100 80 60 40 20 0 2009 2015 Pathology Radiology

Pathology services The pathology market is estimated at 2.50% of the overall healthcare market. According to industry estimates, there are over 40,000 pathology laboratories in the country servicing a total of approximately 1-1.25 million patients per day. This includes

specialized laboratories, work facilities in hospitals and nursing homes, and small testing centres with basic facilities. The calibre of services provided by these laboratories varies widely. The number of NABL accredited laboratories remains low. The number of tests conducted in the last decade has doubled from 180 million to more than 425 million Radiology Diagnostic imaging plays a vital role in almost every clinical discipline. Proliferation of lifestyle diseases such as diabetes and hypertension due to poor diet and lack of exercise has resulted in the increasing reliance on medical imaging both for diagnostics as well as for therapeutics. The industry has progressed because of technological advancement in various types of imaging devices and professionally trained personnel in the area of radiology as well as other imaging. The popularity of imaging stems from the benefit of non-invasive testing and almost immediate diagnosis. The radiology market in India is estimated at 1.10% of the healthcare sector. In 2009, there were approximately 63 imaging equipment available for a million people. The increasing dependence on imaging modalities provide for effective diagnosis and reducing cost in terms of consumables and other operations. The key areas of applications of medical imaging and Picture Archival and Communication Systems (PACS) are in specialties such as endoscopy, cardiology, dermatology, ophthalmology and pathology

The key corporate players in the diagnostics services market Super Religare Laboratories, Dr. Lal Pathlabs, Metropolis Quest Diagnostics. MedPlus Health Services Pvt. Ltd

Company introduction

Profile of the organization

Super Religare Laboratories Limited (Formerly SRL Ranbaxy Ltd.) is one of the leading pathology laboratory network in India, servicing nearly 1550 hospitals/path labs and over 50,000 doctors. SRL along with its subsidiary SRL Diagnostics private Limited performs over 33,000 tests/day and catered to approximately 4.20 million customers during the nine month period ended December 31, 2010, offering a comprehensive range of over 3,300 diagnostic tests, from the routine to the highly specialized tests.and we are looking for Doctors/Nurses/Medical Professional. Through our network of laboratories, we offer a comprehensive range of approximately 3,300 diagnostic tests that cover an extensive range of specialties. Our reports are used for detection, diagnosis, evaluation, monitoring and treatment of diseases and other medical conditions, as well as to monitor and evaluate responses to medication. Through Piramal Diagnostics, we offer a range of pathology services and radiology modalities including computed tomography (CT), diagnostic radiology (X-ray), magnetic resonance imaging (MRI), ultrasound and positron emission tomography (PET). Our collection centers collect specimens within an area or region for shipment to a pre-designated laboratory for testing and our wellness centers offer inter alia preventive care through various health screening packages. We also provide clinical research services, which are dedicated to offering centralized laboratory services to support the needs of drug development for various phases of clinical trials conducted by Indian as well as international pharmaceutical, biotechnological and research companies. Our services extend to support multi-centric studies at sites within India as well as in our neighboring Asian countries.

VISION
"Always be the first-choice path lab for customers all over India and the world"

MISSION
There are two key aspects to SRLs past and future success: our vision of maintaining world class standard and the values that we live by every day, as a company. To reflect our role as an industry leader and to focus our efforts on the opportunities ahead, our mission in delivering is as follows: To provide accurate and precise diagnostic, prognostic and predictive testing services in a timely manner.

To ensure that every employee is treated with dignity and respect, and in a fair, consistent and equitable manner. To create a stimulating, enabling and supportive work atmosphere. To aid and encourage employees in realizing their full potential Brief History of our Company Our Company was incorporated under the Companies Act as a private limited company on July 7, 1995 as SpecialtyRanbaxy Private Limited, a 50:50 joint venture between Specialty Laboratories Asia Limited and Ranbaxy Laboratories Limited, pursuant to a joint venture agreement dated April 17, 1995 (JV Agreement). Our Company became a deemed public limited company in the year 1996 and the endorsement to this effect was made by the RoC on March 30, 1996 on the original certificate of incorporation dated July 7, 1995. The name of our Company was subsequently changed to SRL Ranbaxy Limited pursuant to a special resolution of our shareholders dated June 3, 2002. The reason for such name change was the termination of the joint venture with Specialty Laboratories Asia Limited on January 18, 2002, consequent to which our Company had to drop the trade name Specialty from its name, in accordance with the JV Agreement. For details of the said JV Agreement, see the section titled History and Corporate Structure Shareholders Agreements on page 103. The fresh certificate of incorporation consequent to the change of name was granted to our Company on December 30, 2002, by the RoC. Subsequently, the name of our Company was changed to its present name pursuant to a special resolution of the shareholders of our Company dated August 14, 2008 and a fresh certificate of incorporation was granted to our Company by the RoC on August 28, 2008. The reason for such name change was sale of the Ranbaxy brand by our Promoters. On August 20, 2010, our Company acquired 100% of the paid up capital of PDSPL pursuant to, inter alia, the terms of a share purchase, share allotment and debenture subscription agreement dated July 13, 2010 as amended by an amendment agreement dated August 20, 2010 entered into among our Company, promoters of PDSPL and PDSPL. For details of the said agreement, see the section titled History and Corporate Structure Shareholders Agreements on page 103. Our Company was incorporated in order to undertake the business of establishing, maintaining and managing clinical reference laboratories to provide testing, diagnostic and prognostic monitoring services Major Events and Milestones

Major Events and Milestones Year

1996

Events

in Mumbai 1997 1999 2001 2002 2003 2005 2007 2008 Lake, Kolkata Clinical Reference Laboratory(1) 2009 Nepal fe Care Services Private Limited of Nepal (2) 2010 and Debenture Subscription Agreement with Piramal Healthcare Limited, Dr. Bhavin Jankharia, Dr. Avinash Phadke and Piramal Diagnostic Services Private Limited, pursuant to which we acquired 100% stake in Piramal Diagnostic Services Private Limited(2) Started setting up network laboratories Obtained our first NABL accreditation for our laboratory in Mumbai (1) Established our first researched and development centre in Mumbai Received our first CAP accreditation for our laboratory in Mumbai(1) Started international business by way of appointing agents in London. Entrusted with high-end testing by UK hospitals on a regular basis Set up second Clinical Reference Laboratory at Gurgaon

Awards Year
2010 2009 2008 2008 2007

2007

Awards Operational Excellence in Healthcare Delivery, FICCI Healthcare Excellence Awards 2010 Diagnostic Services Company of the year-India Market, Frost & Sullivan Award 2009 Microsoft Security Strategist Award 2008 in Health Sciences Category, Finalist, Nasscom CNBC-TV18 IT User Award 2008 Partner of Choice for Clinical Research Central Laboratory Services, Frost & Sullivans Partner of Choice Award 2007 CIOL Enterprise Award for the use of information technology in an innovative manner to address a business problem and benefit from it

2007 2007 2005

2004 2004

Innovator CIO Award, CIOL Enterprise Connect Awards 2007 The Innovative 100 2007, CIO 100 Winner, Intelligent Enterprise Award 2005 in the healthcare segment by the Indian Express group, Technology Senate 2005, Bangkok Winner, Best IT implementation awards 2004, PCQuest CIOL Enterprise Connect Award 2006 for creating value for the business by connecting strategic external stakeholders

SOCIAL RESPONSIBILITY Caring for Man and Nature Healthy environment results in Sound Health accompanied by regular diagnosis and proper medication. Therefore, we, at SRL, feel responsible to take care of our community. Our key management team took the responsibility of planting trees and taking care of HSIIDC Park which is just opposite to our Clinical Reference Lab, Gurgaon. Ever since the inception of this initiative which was taken in April 2009, special occasions are marked by saplings being planed by the Senior Management Executives of SRL. To support this cause, SRL has been using pulp free paper for all reports that are generated for patients. Also, to further conserve the environment, we have started following the system of e-reporting. Saving paper in turn means saving money which further results to saving our environment/forests. Join the SRL campaign for care, growth, and conservation of mankind and nature. Henry Ward Beecher Being a leader in our profession, we believe it is our responsibility to take the initiative and do something for the betterment of our community. Read on to know about our effort to make a difference Mass Screening Project: Hepatitis B Hepatitis B is a liver disease; it makes your liver swell and stops it from working right In India about 1 lakh people die every year due to illness related to HBV infection. Many chronic carriers of hepatitis B can feel healthy and strong despite having the virus stay in their liver. That is why hepatitis B is called a "silent infection". Early detection can help protect those you live from a hepatitis B infection and decrease your risk of liver cancer through regular medical check-ups.

In December 2005, we conducted a first-of-its-kind Mass screening project for Hepatitis B amongst school students in Chennai. Walkathon "Pledge for Autism" Autism is a life long developmental disorder that typically occurs in the first three years of life. It causes impairment or disturbance in three main areas Social skills, communicative skills and in their repetitive and restricted behaviors. Lack of knowledge about Autism leaves the parents of affected children in a perplexed state. Keeping this in mind we had conducted an awareness campaign to educate people on the needs of special children in November 2007. Hemoglobin Test The hemoglobin test is an important part of your health evaluation. The test is used to: Measure the severity of anemia or polycythemia, Monitor the response to treatment of anemia or polycythemias, and Help make decisions about blood transfusions if the anemia is severe. In January 2008, we conducted Hemoglobin testing for 35000 MCD School Children. We provide diagnostic testing services at the following facilities: Centers of Excellence for each sub-specialty of diagnosis. We currently have seven Centers of Excellence, focused on clinical pathology, hematopathology, histopathology, microbiology, cytogenetics, radio diagnosis, molecular pathology microbiology, cytogenics and clinical chemistry. They are equipped with high quality equipment and manned by experienced and skilled physicians and medical technologists, including histopathologists, clinical pathologists and radiologists. Reference laboratories. Each of our reference laboratories is a multi-disciplined laboratory, where routine as well as specialized and esoteric tests can be performed, thereby providing our customers with a wide range of laboratory investigations for various types of diseases. Six of our reference laboratories are based in India, our seventh reference laboratory is based in Kathmandu, Nepal and we have entered into a service agreement for one reference laboratory in the Dubai Healthcare City. For further information, refer to the section titled Franchises and Joint Venture Management of third-party laboratories. Network laboratories. Our network laboratories are equipped to perform routine tests and a selected number of specialized tests and has the ability to perform such tests

quickly and report results to our customers. Our network laboratories have varying degrees of sophistication depending on the locations. As of December 31, 2010, we have 181 network laboratories comprising 164 pathology laboratories and 17 radiology laboratories based in the major cities in India. Pathology laboratories. As of December 31, 2010, we have 164 pathology laboratories, of which 53 are owned by us, we operate and manage 31 pathology laboratories based in hospitals (14 of which are based in hospitals run by Fortis Healthcare Limited) on a revenue-sharing or management fee basis, 55 are joint venture laboratories and 25 are franchisee laboratories. Radiology laboratories. As of December 31, 2010, we have 17 radiology laboratories (of which 16 are owned by us and we operate and manage one radiology laboratory based in a hospital), all of which are located in India, with capabilities to perform tests such as CT, MRI, ultrasound, PET and X-ray. In addition, our radiology laboratories have remote review and reporting capabilities, as they are fully-connected through special image transfer software and are therefore equipped to provide tele-radiology. Collection centers. A collection center is a central facility that collects specimens within an area or a region for shipment by independent courier services, to a pre-designated laboratory for testing. Our collection centers are also frequently used as a base for sales and distribution staff. As of December 31, 2010, we have 865 collection centers spread across nearly 400 towns in India and an international network of 23 collection centers outside India in the United Arab Emirates, Oman, Qatar, Kuwait, Bahrain, Sri Lanka, Bangladesh, Nepal, the Maldives, Tanzania and Zambia. E-pathology. We offer e-pathology services, where customers based in India can order and pay for tests online, arrange for specimens to be collected from a designated location, and the diagnostic test is performed at one of our laboratories. Other facilities. We offer preventive care by offering various health screening packages at our wellness centers. Our health screening packages include pre-employment and post-employment screening packages, dental service packages and annual health screening packages. As of December 31, 2010 we have 15 wellness centers, 12 of which are located within our laboratories, and three are standalone wellness centers. International operations Through our network of reference laboratories within and outside India, network laboratories, collection centers and representation offices and liaison offices, we are able to provide routine and specialized testing services to customers outside India,

including leading hospital chains in the United Arab Emirates, Oman, Qatar, Kuwait, Bahrain, Sri Lanka, Bangladesh, Nepal, the Maldives, Tanzania and Zambia. Logistics and specimen tracking Specimen collection is performed in accordance with our Specimen Collection Standard Operating Procedure, which conforms to the National Commission for Clinical Laboratory Standards (NCCLS) United States guidelines for specimen collection. Test specimens collected within India or outside of India are transported to our laboratories in compliance with the International Air Transport Association (IATA) and International Civil Aviation Organization (ICAO) shipping guidelines. We use third party and in-house courier service providers that provide online tracking facilities. We have a dedicated logistics team that monitors, online, daily shipments from all locations, whether in India or internationally, recording the status of the shipment from the time of collection of the specimen, until it arrives at our laboratories and is tested and reported, on a real-time basis. We have arrangements with courier service companies including inter alia Blue Dart Express Limited and Blazeflash Couriers Limited, for the transportation of specimens from our 865 collection centers throughout India. We also have arrangements with international courier companies inter alia Federal Express Couriers and World Courier for our international shipments. We believe that we have a strong logistics support and network that ensures our customers of timely pick-up, transport and delivery of specimens within India or outside India, to the pre-designated laboratory for testing. We provide customized solutions for clinical trials depending upon our customers needs and requirements, and also the geographic location of the customer. We seek to reduce defects, enhance quality and further increase the efficiency of our logistics operations. As a result, we have been able to increase the efficiency of our logistics routes such that the samples within city limits are transported to the local laboratories in a timely manner. The samples collected that require specialized testing are transported to the reference laboratories and reach the reference laboratory via available airline, road and rail networks. Samples from Tier II and III cities and remote locations reach the laboratories via courier services. Specimen shipments are transported under the required temperature-controlled conditions. A key challenge in the operation of a laboratory network is the maintenance of sample integrity and turnaround time when tests are conducted by laboratories located in a geographic area logistically far removed from the sample collection point. We have standard operating procedures in place that enable us to identify and remedy preanalytical defects in specimens that we receive.

Test procedure and reporting Specimens delivered to our laboratories must be accompanied by a test request form, which is completed by our customers and indicates the test to be performed and provides the necessary medical and billing information. A dedicated team checks each specimen and related test request form for completeness and then enters the specimen into our information system, where a unique identification number and/or bar code is assigned to each specimen, which helps to ensure that the results are attributed to the correct patient. Once this information is entered into our information system, we perform the tests and, depending on the nature of the test that we perform, we either enter the results manually, or through an electronic data interchange interface, directly from the test equipment into our information system. Most of our automated testing equipment is connected to our information systems, reducing the need for the results to be entered in manually (for a description of our information systems, please see Management Information and Control Systems). All test reports are available for review online by our customers, as well as by us, thereby enabling our staff to review the results even if they are not physically in the laboratory. In addition, our radiology laboratories have remote review and reporting capabilities, as they are fully-connected through special image transfer software and are therefore equipped to provide tele-radiology. We complete most routine testing within two to three hours, while the completion time for specialized and esoteric testing varies according to the complexity of the test, typically ranging from a few hours to two weeks. Our dispatch team reviews and sorts the test reports and arranges for dispatch through couriers. Test reports are either delivered electronically, hand delivered to customers located within the same city as the laboratory that performed the tests, or are couriered to customers. Our reporting team monitors the shipment status of the report until it is delivered to our customers. Test reports delivered electronically are typically dispatched immediately once the report is ready. Delivery time for test results delivered by hand or courier varies. In addition, to facilitate additional tests, we may store certain specimens for a specified length of time, in accordance with our standard operating procedures. Specimens are disposed of through a waste management system in accordance with our arrangement with agencies as authorized by the relevant local municipal corporation and in accordance with applicable environment and human health and safety laws. For further details, see the section titled Regulations and Policies on page 84 Our pathology testing services In addition to walk-in customers, our diagnostic laboratory network has received diagnostic test prescriptions from more than 50,000 physicians, and has provided

specialized and esoteric diagnostic laboratory test services to approximately 1,550 hospitals, nursing homes and diagnostic laboratories. Through our network of laboratories, collection centers and referral arrangements, we offer a comprehensive range of approximately 3,300 diagnostic tests that cover an extensive range of specialties. Our reports are used for detection, diagnosis, evaluation, monitoring and treatment of diseases and other medical conditions, as well as to monitor and evaluate responses to medication. Our customers include hospitals and other medical facilities, physicians, insurance companies, governmental agencies, corporations, nursing homes, pharmaceutical companies and other independent clinical laboratories, and walk-in customers. We currently operate and manage 31 pathology laboratories based in hospitals (14 of which are based in hospitals run by Fortis Healthcare Limited) on a revenue sharing or management fee basis. Routine testing Physicians use our routine tests in general patient care to establish or support a diagnosis, to monitor a patients treatment or to search for an otherwise undiagnosed condition. They measure various health parameters such as the functions of the heart, kidneys, liver, thyroid and other organs and systems. Through our network of laboratories and collection centers, we currently offer a comprehensive range of routine tests. The most frequently requested of these routine tests include blood chemistry analyses, urinalyses, blood cell counts, thyroid tests and human immunodeficiency virus (HIV) tests. These routine procedures are most often used by physicians in their outpatient office practices, hospital-based laboratories that we manage, or our customers that subscribe to our health screening packages, as further described in the section titled Preventive Care. We perform this core group of routine tests in all of our pathology laboratories. Routine testing constitutes the majority of the tests performed by our pathology laboratories. We generally perform and report most routine procedures utilizing a variety of sophisticated and computerized laboratory testing instruments. Preventive Care We believe that preventive care has increased in popularity with our customers with the increase in healthcare costs, as well as an increasing awareness of the benefits of preventive care. The increase in prevalence of communicable diseases as well as of non-communicable diseases brought about by occupation or lifestyle, has played a key role in the demand for preventive care. We commenced our Wellness Program in 2007, providing

preventive health management services to corporations and individuals, including echocardiography, electrocardiography, stress tests, pulmonary function test, audiometry and body composition tests, in order to enable them to take an active role in improving their employees or their health. Our Wellness Program targets individuals who may not be aware that they are suffering from a particular disease. We offer a broad spectrum of health screening packages to our customers, depending on, among other things, age group and gender. Health screening packages that we offer include pre-employment and post-employment screening packages, dental service packages and annual health screening packages, and are conducted at our wellness centers. As of December 31, 2010, we have 15 wellness centers, 12 of which are located within our laboratories, and three are standalone wellness centers, providing wellness services to more than 1,000 corporations and government agencies in India. Specialized and esoteric testing Specialized and esoteric testing operations involve certain types of unique testing capabilities and/or customer requirements. These tests require sophisticated equipment and materials, highly skilled personnel and professional attention. They are ordered less frequently than routine tests, and are generally priced higher than routine tests. Through our network of laboratories and collection centers, we currently offer a comprehensive range of specialized and esoteric tests. We typically provide specialized and esoteric testing services to hospitals, commercial laboratories and physician office laboratories. We generally serve two market segments, firstly, markets that are not typically served by the standard clinical testing laboratory (like our network laboratories), and secondly, markets that are served by the standard clinical testing laboratory, but also require the possibility of adding related services (such as clinical trials or occupational drug testing from the same supplier). The following sets out the key fields in which we offer specialized and esoteric testing and related services:

hematopathology and oncology (the study of bacteria, viruses, genetics, blood and cancer markers, respectively, at the molecular level);

drugs in patients); and

f changes or mutations in deoxyribonucleic acid (DNA) that determine desirable or undesirable traits, including an increased risk in certain diseases). These tests are conducted at our reference laboratories and/or Centers of Excellence, as well as certain of our network laboratories. Infectious Disease Diagnostic testing in relation to many infectious diseases requires the use of advanced technology and equipment. The esoteric tests that we offer complement routine tests, thereby allowing complete patient care and management for various infectious diseases including HIV, tuberculosis, pneumonia and hepatitis. We also provide extensive testing services and mass screening services for various diseases pursuant to various public health programs and national health initiatives organized by the Government of India. Oncology Testing We offer a series of testing technologies that aid in diagnosing and monitoring certain cancers and predicting the outcome of certain treatments. We offer, in one place, routine tests (hematology and chemistry), specialized tests (histopathology, immunohistochemistry and cytogenetics) and esoteric tests (molecular assays and flow cytometry) in oncology for diagnosis, prognosis and monitoring of leukemia as well as solid tumors. In cancers such as colon and lung cancer, assays such as K-ras, BRAF and EGFR mutation analysis are associated with appropriate therapy choices for a given patient. Clinical research trials testing We have provided clinical research trial testing services since 2000, and have completed more than 500 studies across more than 35 therapeutic areas, and the majority of the studies we have performed were of the Phase III and Phase IV type conducted for international clients. We regularly perform clinical diagnostic testing services for Indian as well as international pharmaceutical and diagnostics companies and contract research organizations (service organizations that provides support to the pharmaceutical and biotechnology industries in the form of outsourced pharmaceutical research services (for both drugs and medical devices)) to support their international regulatory submissions. Clinical trials involving new drugs are commonly classified into four phases. Each phase of the drug approval process is treated as a separate clinical trial. The drugdevelopment process will normally proceed through all four phases over many years. If the drug successfully passes through Phases I, II, and III, it will usually be approved by

the national regulatory authority for use in the general population. Phase IV are postapproval studies. As such, clinical trials testing often involves periodic testing of customers participating in the trial over a period of several years. Our reference laboratories at Goregaon, Mumbai, Gurgaon and New Delhi also have safety laboratories including comprehensive disaster and recovery management services for data and samples. We conduct Phases I through IV of clinical research trials on new drugs or diagnostic assays and vaccines. In addition to accreditations by NABL and CAP, our clinical research services have received reciprocal accreditation from Asia Pacific Laboratory Accreditation Cooperation (APLAC) and International Laboratory Accreditation Cooperation (ILAC). We received the NGSP Level I Laboratory Certification in 2009 and 2010 for Standardization of Glycated Hemoglobin Result Reporting and to participate in the CDCPs Lipid Standardization Program in 2009. Radiology services Through Piramal Diagnostics, we are currently the largest radiology practice in India based on total income and number of patients screened (Source: The IMaCS Report). Our radiology laboratories provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and may reduce unnecessary invasive procedures, often reducing the cost and amount of care for patients. Diagnostic imaging involves the use of non-invasive procedures to generate representations of internal anatomy and function that can be recorded on film or digitized for display on a video monitor. The principal diagnostic imaging modalities we use at our radiology laboratories are: Bone Densitometry Bone densitometry uses an advanced technology called Dual-energy X-ray Absorptiometry (DXA) to safely, accurately and painlessly measure bone density and the mineral content of bone. As of December 31, 2010, we had 11 DXA machines in operation. CT CT provides higher resolution images than conventional X-rays, but generally not as well-defined as those produced by MRI. CT uses a computer to direct the movement of an X-ray tube to produce multiple cross-sectional images of a particular organ or area of the body. CT is used to detect tumors and other conditions affecting bones and internal organs. It is also used to detect the occurrence of strokes, hemorrhages and infections. As of December 31, 2010, we had 16 CT systems in operation.

X-ray and Orthopantomography X-ray systems use roentgen rays to penetrate the body and record images of organs and structures on film. Digital X-ray systems add computer image processing capability to traditional X-ray images, which provides faster transmission of images with a higher resolution and the capability to store images more cost-effectively. As of December 31, 2010, we had 62 X-ray systems in operation, 34 of which are digital X-ray systems. Orthopantomography (OPG) is a special method, using X-rays, for obtaining radiographs of the teeth and jaws, both upper and lower. An OPG machine is specially constructed so that it rotates around the jaw bones. As of December 31, 2010, we had 18 OPG machines in operation. MRi has become widely-accepted as the standard diagnostic tool for a wide and fastgrowing variety of clinical applications for soft tissue anatomy, such as those found in the brain, spinal cord and interior ligaments of body joints such as the knee. MRI uses a strong magnetic field in conjunction with low energy electromagnetic waves that are processed by a computer to produce high-resolution, three-dimensional, cross-sectional images of body tissue, including the brain, spine, abdomen, heart and extremities. MRI systems can have either open or closed designs, routinely have magnetic field strength of 1.5 Tesla to 3.0 Tesla. As of December 31, 2010, we had 12 1.5 Tesla MRI systems and one 3.0 Tesla MRI system in operation. Mammography Mammography is a specialized form of radiology using low dosage X-rays to visualize breast tissue and is the primary screening tool for breast cancer. Mammography procedures and related services assist in the diagnosis of and treatment planning for breast cancer. As of December 31, 2010, we had 12 mammography systems in operation, 11 of which are digital mammography systems. Ultrasound and Color Doppler Ultrasound imaging uses sound waves and their echoes to visualize and locate internal organs. It is particularly useful in viewing soft tissues that do not X-ray well. Ultrasound is used in pregnancy to avoid X-ray exposure as well as in gynecological, urologic, vascular, cardiac and breast applications. Color Doppler is a special ultrasound technique, which allows the evaluation of blood vessels. Ultrasound waves that reflect from the red blood corpuscles in the arteries and veins are evaluated for velocity and amplitude, and color maps of the vessels can be generated. Color Doppler is very useful in evaluating the carotid arteries in the neck, the

heart (echocardiography), the arteries and veins in the abdomen and the arteries and veins in the upper and lower limbs. An ultrasound machine equipped with Color Doppler facilities is required to perform this test. All of our ultrasound systems have Color Doppler facilities. As of December 31, 2010, we had 60 ultrasound systems with Color Doppler facilities in operation. PET PET is a state-of-the-art nuclear medicine technique for evaluating biochemical and physiological processes in the body. In the early stages of most diseases, such functional processes are altered first. PET detects these changes, often before anatomical or structural changes are evident on MRI or CT scan. PET is a functional imaging modality, as compared to CT scan, which is a structural imaging modality. We employ a combined PET/CT system that blends the PET and CT imaging modalities into one scanner. By doing a CT scan at the same time, it is possible to superimpose the PET and CT scan findings in a single image, thus giving us functional and structural imaging. As of December 31, 2010, we had one combination PET/CT systems in operation. Clinical research servicesClinical research services We also provide clinical research services which are dedicated to offering centralised laboratory services to support the needs of drug development for various phases of clinical trials conducted by Indian as well as international pharmaceutical, biotechnological and research companies. Our services extend to support multi-centric studies at sites within India as well as our neighbouring Asian countries. Our information management system, known as the Centralized Laboratory Information Management System (CLIMS), uses sophisticated algorithms to cleanse and configure the data so that analysis can be comprehensive and meaningful. The data is maintained on multiple levels of analysis enabling review of data from the global level to the granular transactional detail. The system includes a base set of queries that provide basic functionality and allows online real-time ad hoc query capability enabling the user to customize analysis to the best needs of the organization using the system. For a description of CLIMS, see the section titled Management Information and Control Systems. Franchises and Swot analysis of srl

Strengths

1. Established and wide diagnostic practice across India 2. Comprehensive offerings across our network of laboratories 3. Strong research and development team and use of sophisticated technology Weakness Less promotion activities Opportunity Expansion of product line Expansion internationally Rular markets

Threats
Pathology sector The clinical diagnostics laboratory industry consists primarily of three types of providers: hospital-based laboratories, physician-office laboratories and independent clinical laboratories such as ours. The clinical laboratory business is intensely competitive. There are currently five major independent clinical laboratories in India: our Company, Dr. Lal Pathlabs, Metropolis, Thyrocare and Quest Diagnostics. In addition, we compete with many smaller independent clinical and anatomical laboratories as well as laboratories owned by hospitals and physicians. We believe that, in selecting a laboratory, our potential customers often take into account the following factors:

e offered by the laboratory;

Radiology sector The market for diagnostic imaging services is highly competitive. We compete principally on the basis of our reputation, our ability to provide a broad selection of tests at each of our facilities, the quality of our diagnostic imaging services and technologists and the ability to establish and maintain relationships with healthcare providers and referring physicians. We compete locally with groups of radiologists, established

hospitals, clinics and other independent organizations that own and operate imaging equipment. Our competitors include Metropolis, Dr Lal Pathlabs, Quest Diagnostics, Medinova and Thyrocare. Some of our competitors may now or in the future have access to greater financial resources than we do and may have access to newer, more advanced equipment. In addition, some physician practices have established their own diagnostic imaging facilities within their group practices to compete with us. We experience additional competition as a result of those activities. Intellectual property

analysis